Performance Management and Rewards at Stride Treglown - Case Study Example

How HRM at Stride Treglown can improve organisational performance through Performance Management and Rewards Name Institution Professor Course Date Abstract Stride Treglown is an architectural consultancy company that holds nine offices across the United Arab Emirates and United Kingdom. The firm is an employee owned practice that employs over three-hundred workers. The employees based include architects, Technicians, Technologists, landscape architects, interior designers, town planers, project managers, graphic designers, sustainability consultants and HR administrators. The firm is the fourteenth largest architectural practice in the United Kingdom with its head office in Clifton. The firm has a turnover of 19 million dollars. Drawing from the Stride Treglown case study, this essay critically analyses how human resource management at Stride Treglown can enhance organisation performance and provides recommendations for improvement. The essay focuses on reward and performance management. One of the most essential aspects of a business organisation is its human capital and HR strategy. Efficient and effective management of human capital facilitates achievement of an organisation’s strategic objectives. Failure to manage human capital effectively instigates reduced profits and productivity and destroys the reputation and image of a firm. Highly skilled and motivated employees help a firm to offer superior products and promote operational effectiveness in a firm. Therefore, human capital is considered the most essential component of competitive advantage in organisations. Although firms consider human resources as a distinct asset that offers sustained competitive advantage, they encounter challenges in their performance management and reward policies. It is through effective human resource management that firms attain a competitive advantage. This paper contends that although Stride Treglown has attained major success in the field of Architectural consultancy, the firm should implement effective performance management and reward strategies to keep its employees motivated and improve organisational performance. As regard performance management, the value of performance management is recognised as helping executives to hold their managers answerable for attaining their mandates and promote useful motivational efforts, sanctions and reward to enhance the overall performance of a firm. Hernandez (2009) defines performance management as the integration of performance appraisal systems with the extensive human resources systems as a way of aligning the work behaviours of employees and the organisational goals. Herbandez(2009) further asserts that performance management should be a constant interactive process developed to promote the capability of employees and facilitate productivity. Cladwell (2002) defines performance management as a proactive partnership amid the management and employees that assist workers to perform at their best and align their contributions with organisational initiatives, goals and values. According to Ammons (2015), performance management is more than just measurement of performance, but a series of actions of management. Successful performance management systems necessitate executive commitment, although they are less dependent on executive decision-making. Through the performance management, managers and employees operate together to plan, monitor and assess a worker’s work goals and the general contribution to the firm. Effective performance management systems ensure that the performance of an employee contributes to the objectives of a firm. Performance management brings together scores of components of excellent people management practices including organisational development, performance measurement and learning and development. Performance management does not take place automatically, but requires the management to be proactive. It is up to a firm’s management to take initiative to establish performance management. It must be understand that performance management involves the employees and the management. It is not something that managers do to employees, but requires involvement or partnership between employees and management. As a result, performance management cannot bear fruits if one party is committed and the other party is not committed. The major ingredient of performance management is partnership amid managers and employees. At Stride Treglown, performance management is informal and entails daily feedback, advice from team leaders and discussions. The fact that Stride Treglown makes its performance management regular, employees are able to improve their performance and that of their organisation. The firm engages team leaders in assessing the performance of their team members. The team leaders conduct regular meetings aimed at discussing the performance of their team member. However, the regular meetings are conducted based on the project. Although the firm believes that their workers are self-driven, it acknowledges that performance management is essential. Based on the case study, Stride Treglown does not conduct regular performance appraisals citing that the firm’s employees hold the capacity to champion their own cause. In addition, the firm’s management realised that the yearly performance conversation was not helping employees in acknowledging their mistakes and rectify them. In this view, the management introduced a strategy where employees can converse with anybody they wish and can request for formal performance appraisal when they deem necessary. Employees are set free to seek for coaching, mentoring and networking advice. Team leaders are also required to augment informal feedback. However, the firm acknowledges that its performance management requires improvements. The long-term success of a firm and attainment of strategic goals rest with the capacity of managers to manage performance, and ensure that the performance measures are matches the needs of the firm. According to Mello (2014), performance management also known as performance evaluation is becoming more of a strategic issue for organisations in the contemporary world. Effective performance management systems require supervisors and employees to work together to set performance expectations, assess individual and organisational needs, review results and plan for the future. According to Cardy and Leonard (2014), performance is not just a once-a-year event. Stride Treglown understands this quite well in the sense that the firm makes its performance management informal through daily feedback, advice and discussions. Although regular informal feedback helps workers to known what they need besides helping them in understanding their weaknesses and strengths, formal regular appraisals are also important. The principal objective of performance management is developmental. At Stride Treglown employees are allowed to champion and self-drive their own performance management. With respect to the goal-setting theory, individual objectives developed by a worker play a crucial role in inspiring an employee superior performance( DuBrin 2008) . This is because workers follow their own goals and when goals are not attained, the employees modify them or improve their performance. With respect to the expectancy theory, employees adjust their own conducts in their workplace depending on the expected satisfaction of valued objectives set by them. The employees adjust their conducts in a way that makes them achieve set goals. The expectancy theory maintains that expectations regarding future events influence employee’s performance Salaman, Storey & Billsberry 2005). When an employee performance improves, the organisational productivity also improves (Redmon & Dickinson 1990) . Stride Treglown, therefore, promotes organisational performance through encouraging self-efficacy. In this regard, Stride Treglown can continue utilising regular informal performance management systems to increase its productivity. However, the firm should also conduct formal performance. According to Grote (2002), performance appraisal discussions are demanding and the most sensitive of all meetings that managers are involved in. They require better planning. Therefore, managers and leaders at Stride Treglown should not allow their employee to champion their performance management. This is because effective performance management requires partnership between managers and employees where both employees and managers have the responsibility in the performance management. Performance management particularly feedback must be a two-way communication procedure and joint responsibility between employees and managers (Kim & Kang 2015) . A good performance management blueprint helps in increasing organisational performance, through helping employees and managers to indentify goals and offer information on how far objectives are being met. Regular formal performance appraisal should be implemented in the firm as they facilitate setting of work standards, assessment of actual employee performance and offer feedback that eliminate performance deficiencies thereby improving individual and organisational performance. With respect to rewards, the expectancy theory postulate that employees exert an increased level of effort if they perceive that there is a sturdy relationship between rewards, effort, and performance. According to Robbins, Judge, Odendaal and Roodt (2009), for effort to instigate good performance an employee must demonstrate the required ability to perform and the performance appraisal system that measures individual performance must be objective and fair. The performance-reward relationship can only be strong if an employee performance instead of seniority or personal favourites is rewarded. Employees attaining the desired performance level expect a certain compensation level. The management assesses and rewards employee performance. Rewards entail the return given to employees by their employers because of their contribution to the organisation. Rewards contribute to execution of strategy and shaping of employees behaviour in a firm. A well-established reward systems matches with organisations’ mission, job performance and vision. According to Svetlik and Sadar (2006), the reward system entails mutually altered rewarding processes, organisational practice and policies oriented to rewarding workers for their competencies, abilities and achievement. In exchange for their commitment and contribution to their organisations, employees expect certain extrinsic rewards such as bonuses, pay, money stimulations and intrinsic rewards such as recognition, promotion, personal growth, autonomy, influence and innovative achievement. When employees see that their superior performance and hard work are rewarded and recognised by their organisations, they expect such relationships to go on. As a result, the employees set high performance levels for themselves while expecting higher reward levels. Rewards are the only human resource activity, which hold influence on all personnel functions. According to Robbin et al. (2009), employees’ motivation would be high to the extent that the rewards an employee receive for higher performance satisfies the dominant needs consistent with individual goals. Rewards influence organisational performance. At Stride Treglown, employees receive basic salary that matches the market value, auto-enrolment pension, heath cash plan, private medical insurance, flexible working hours, sick pay, bonuses, childcare vouchers, training bursaries for students and paid technical on Rivet to mention but a few. All these apart from flexible working hours entail extrinsic rewards. According to McKenna (2000), rewards encompass two types that include intrinsic and extrinsic rewards. Intrinsic rewards entail success, recognition, praise, challenge, personal growth and achievement to mention but a few while extrinsic rewards entails things like pay and fringe benefits. It is no doubt that the management at Stride Treglown increases organisational performance through use of rewards with a particular focus on extrinsic rewards. Rewards increase employees’ job satisfaction, hence a rise in organisational performance. McKenna (2000) asserts that satisfaction comes about when the receipt of both extrinsic and intrinsic rewards is the upshot of performance. However, the satisfaction level depends on how near the rewards are to what an employee perceives as reasonable for services rendered. The closer the match between actual rewards and perceived reasonable rewards, the greater the satisfaction level, hence increased performance. Stride Treglown focuses more on extrinsic rewards. To increase organisational performance, the firm should engage intrinsic rewards. McKenna (2000) confirms that rewards linked to higher order needs that entail intrinsic rewards assume considerable importance as the employee receives more rewards for his/her effort. The more the intrinsic rewards an employee receives, the higher the effort and commitment towards job roles. Intrinsic rewards are more immediate and direct compared to extrinsic rewards. With respect to Herzberg’s motivation theory, satisfaction precedes performance with perceived equity and rewards promoting individual and organisational performance. Productive reward systems help in attaining a competitive advantage and retain best talents that in turn promote organisational performance. Rewards increase the satisfaction and motivation of employees leading to increased organisational performance. Rewards motivate the quantity and quality of their work and bring into line their performance to a firm’s objectives (Darwish 2013). As a result, rewards strongly influence employees, performance, motivation and behaviour and should be a crucial element in every company’s strategy. With respect to the expectancy theory, motivation to work augments when a worker acknowledges that his/her performance is instrumental in the attainment of desired rewards. Singh (2007) asserts that rewards facilitate attraction of the right human capital besides motivating employees. Therefore, firms cannot increase their performance or attain a competitive edge in the highly competitive business environment if they do not reward their employees both extrinsically and intrinsically. Simply spending lots of money on employees is not sufficient, but employees should be motivated through other means other than through financial rewards. Rewards increases organisational commitment that instigates organisational engagement. Engagement takes place when people are committed to their job roles and motivated to attain increased performance levels. Organisational commitment, on the other hand, refers to the identification with values and goals of a firm, a desire to belong to the firm and a willingness to display increased effort. Organisational performance entails the capacity to reach a desired goal or the extent to which expected organisational results are attained. Organisational performance encompasses attainment of organisational goals, improvement of internal processes, and satisfaction of customers and increment of resourcefulness. The analysis acknowledges that HRM hold great effects on organisational performance. Specific human resource practices such as performance management and rewards can promote organisational performance. For instance, performance management drives the behaviours of employees to align with a firm’s objectives and goals. Performance management strategies such as daily discussions promote the overall success of an organisation. PM increases the efficacy of employees, career growth and development thereby promoting overall organisational performance. With respect to rewards, both extrinsic and intrinsic rewards motivate employees and increase employees’ commitment and engagement to their organisations. Motivation, organisational engagement and commitment are major ingredients of increased performance. More so, rewards helps in attracting and retaining skilled employees who are essential for increased organisational performance. Stride Treglown management utilises informal performance management. Although informal performance management systems promote organisational and individual performance, the firm should integrate both formal and informal performance management. In a nutshell, PM serves as a crucial tool for attainment of organisational objectives and execution of HRM policies. Rewards also promote attainment of organisational goals. Stride Treglown should integrate extrinsic and intrinsic rewards to keep employees motivated, engaged and committed to their roles in their workplace. The firm should create performance management and reward systems that focus on excellence and treat workers as human capital investors. The firm should create a reward system and implement performance management strategies that acknowledge the value of human capital through articulating existing reward and performance systems and business strategy. Reference List Ammons, D 2015, ‘ Getting real about performance management’, Public Management, vol.97, no.11, pp.8-11. Caldwell, C 2002, Performance management, USA, AMACOM Div American MGMT Assn. Cardy, R., & Leonard, B.(2014). Performance management: Concepts, skills and exercises. UK: Routledge. Darwish, T 2013, Strategic HRM and performance: Theory and practice, UK, Cambridge Scholars Publishing. DuBrin, A 2008, Essentials of management, UK, Cengage Learning. Grote, R.C 2002, The performance appraisal question and answer book: A survival guide for managers, USA, AMACOM Div American MGMT Assn. Hernandez, S.R 2009, Strategic human resources management in health services organisations, UK: Cengage Learning. Kim, Y & Kang, M 2015, ‘The performance management system of the Korean healthcare sector: Development, challenges, and future tasks’, Public Performance & Management Review, vol.39, pp.297-315. McKenna, E 2000, Business psychology and organisational behaviour: A student’s handbook, USA, Psychology Express. Mello, J 2014, Strategic human resource management, UK: Cengage Learning. Redmon, W & Dickinson, A 1990, Promoting excellence through performance management, UK, Pyschology. Robbins, S, Judge, T, Odendaal, A & Roodt, G 2009, Organisational behaviour in Southern Africa, 2nd edition, SA, Pearson Education. Salaman, G, Storey, J, Billsberry, J 2005, Strategic human resource management: Theory and practice, UK, SAGE. Singh, B.D 2007, Compensation and reward management, India, Excel Books. Svetlik, I & Sadar, N.C 2006, HRM’s contribution to hard work: A comparative analysis of human resource management, UK: Peter Lang. Read More