Human Resource of SCG Limited - Coursework Example

?Introduction Businesses have devised strategies to survive which is attained by minimizing costs and maximizing output, owing to the highly competitive structure in the modern world. Labour remains one of the highest expenses in business operations. As such, it is only practicable that a consistent method of optimizing its output is employed at all times. Performance appraisal is one of the strategies that are used for the optimization of labour (Armstrong 2009). In general, it is a structure that allows the evaluation of the employees’ performance and behaviour (Foot and Hook 2005). It also influences the workers through factors including increased job satisfaction and by use of promotional tools such as better equipment, wages and responsibilities. Additional functions of performance appraisal include improved communication in the organization and identification of potential that could be put to better use (DeIpo 2007). In doing this businesses are in a better position to achieve their goals and objectives. This paper focuses on a case of performance appraisal with reference to SCG Limited employing 450 employees and conducts an appraisal of employee performance annually. The discussion of the case study offers an account of an effective performance appraisal system. The paper also offers a literature review of the sources that are used. Finally, it gives conclusion and recommendations that can be used to improve the appraisal system in the company. Literature Review DeIpo (2007), Warner (2002), Armstrong and Applebaum (2003) and Condrey and Perry (2010) agree that performance appraisal is a critical concept for businesses to survive in the current business environment. Lyster and Arthur (2007), Marquis and Huston (2008) and Condrey and Perry (2010) acknowledge that employees play a critical role in a company’s performance, and this can be improved through performance appraisal. The most effective performance appraisal system is one that places the greatest concern on the needs of the employees as expressed by Condrey and Perry (2010) and DeIpo (2007). Warner (2002) and Marquis and Huston (2008) concur that managers are responsible for the process in organizations and they should make appropriate use of the systems in their organizations to perform their duties effectively. Armstrong (2009), Foot and Hook (2005) and Lyster and Arthur (2007) emphasize that the process of performance evaluation should be based on the organization’s goals and objectives. Condrey and Perry (2010), Armstrong (2010) and Lyster and Arthur (2007) express that the process should be based on job performance as it motivates the employees to work hard. Communication is one of the key features of an effective appraisal system as noted by DeIpo (2007), Armstrong and Applebaum (2003) and Armstrong (2009). Armstrong (2010) further reinforced on the significance of communication in this process. Employee participation is vital in the process as it shows their worth and impact in the business operations as stated by DeIpo (2007), Foot and Hook (2005) and Marquis and Huston (2008). The employee performance evaluation should be conducted in a fair and transparent manner as asserted by Marquis and Huston (2008), DeIpo (2007) and Condrey and Perry (2010). Armstrong (2010) further explains that there should be no personal bias in the process. The process should be conducted in accordance to set rules and regulations as explained by DeIpo (2007), Lyster and Arthur (2007) and Condrey and Perry (2010). Armstrong (2010), DeIpo (2007), Warner (2002) further add that an effective appraisal system should be standardized. External appraisers may also be involved to reinforce its reliability and credibility. Armstrong and Applebaum (2003), Armstrong (2010) and Condrey (2010) assert the need to train appraisers to eliminate the number of errors in the process. Analysis and Discussion SCG is an insurance company that conducts an annual performance appraisal of its employees. Ingrid Aspwell recently joined the company as a finance manager and is making preparations to do her first performance appraisal. She has taken the necessary measures before the procedure by communicating to the staff members. This is by use of a standard performance appraisal form to be completed before the review meeting and a document containing the date and time of the process as expressed by Condrey and Perry (2010). One of the longest serving employees in the department has received the documentation and is not pleased with the idea of the formal meeting. He had an excellent working relationship with the previous manager and his performance was outstanding as reflected in yearly salary increments. He considers himself as more than competent and has worked well in the previous years. He does not understand the purpose of the company’s strategy and targets for the following year and fails to understand how they relate to his job. The manager fears that other employees share the same sentiments as she overheard their discussion. These opinions held by employees worried her as they would have a negative impact on the performance appraisal process. The previous system lacked the features of effective performance appraisal. The new manager, on the other hand, introduced a system where the activities of the employees were governed by a system based on management’s objectives as explained by Armstrong and Applebaum (2003). She introduced the system by establishing a system with short-term and long-term objectives derived from the objectives of the company (Marquis and Huston 2008). She then took the necessary measures to communicate to the employees about the objectives and the process of appraisal to be negotiated in a review meeting. Previously, the employees did not work in accordance to the company’s objectives. However, the new finance manager introduced a system where the employees would perform their duties in accordance to the overall objectives of the company as suggested by Lyster and Arthur (2007) and Armstrong (2010). As discussed earlier, the longest serving employee had developed a friendly relationship with his manger and this could be the reason why he had the annual salary increments. The new system encouraged fairness and transparency that was based on realistic and achievable targets. The manager also encouraged employees’ participation in the appraisal process (Foot and Hook 2005). This case study highlights the need for continuous employee training concerning the company’s mission, vision and objectives. The process should be based on performance that should be evaluated using a fair and transparent process (Warner 2002). The new system has made improvements on the previous one which involved personal bias, lack of documentation, inadequate appraiser training and insufficient information. This shows that Ingrid Aspwell is an efficient manager and her perspective on performance appraisal should be replicated in the entire organization. Conclusion Conclusively, the newly introduced performance appraisal system is considered efficient. The case study shows key attributes of an effective appraisal system such as validity, standardization, job relatedness, legal sanction, appraisers’ training, open communication and employee participation among others. The company should conduct continuous appraiser training to inform the employees and managers about the new trends in appraisal performance and its significance to the overall performance. The manager started by communicating to the employees about the objectives of the company to encourage them to comply with them in their work. The participation of the employees in the appraisal process makes it transparent and fair and this empowers them. Though the manager may face challenges in the introduction of the new system, she should not despair since this is how it should be done. Recommendations The company should ensure the establishment of a performance evaluation tool that is effective. Some of the tools that can be used include rating scales, MBO (management by objectives) and checklists. There should be flexible job descriptions, for example, the managers and employees should be responsible for job description, analysis and design. There should be employee training and education on how to assess themselves and colleagues. External appraisers should be involved in performance appraisal in order to increase credibility. There should be open communication concerning the process to improve fairness and validity. As a final point, there should be reliability in the process as it should commence with job analysis whereby performance is clearly described. References Armstrong, M 2009, Armstrong's handbook of human resource management practice, 11th edn, Kogan Page Publishers. Armstrong, M 2010, A handbook of human resource management practice, 10th edn, Kogan Page Publishers. Armstrong, S and Applebaum 2003, Stress-free performance appraisals: Turn your most painful management duty into a powerful motivational tool, Career Press. Condrey, ES and Perry JL 2010, Handbook of human resource management in government, 3rd edn, John Wiley and Sons. DeIpo, A 2007, The performance appraisal handbook: Legal and practical rules for managers, 2nd edn, Nolo. Foot, M and Hook, C 2005, Introducing human resource management, 5th edn, Prentice Hall. Lyster, S and Arthur, AE 2007, 199 pre-written employee performance appraisals: the complete guide to successful employee evaluations and documentation, Atlantic Publishing Company. Marquis, BL and Huston, CJ 2008, Leadership roles and management functions in nursing: Theory and application, 6th edn, Lippincott Williams and Wilkins. Warner, J 2002, Janus Performance Management System, Human Resource Development. Read More