Analysis of Performance Management - Term Paper Example

 Analysis of Performance Management “According to a 2006 Employee Review by Randstad, one of the world’s largest staffing organizations, 86 percent of surveyed workers said they needed to feel valued by their boss to stay happy—but only 37 percent report receiving positive feedback”(Marconi). The above statistics clearly show the importance of employee performance in an organization. Many people are of the view that better employee performance is the requirement of only the employer; not the employees. However recent studies have shown that majority of the employees wanted to make their employer happier on order to in order to get promotion and other incentives and also to cement their places in the organization. According to US office of personnel management, “Performance management is the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals”(US office of personnel management). “Simply put, performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc” (Performance Management -- Basic Concepts). Planning, monitoring, developing, rating, and rewarding are the five major elements of any performance management system. This paper analyses how a company can use performance management system to good effect, by taking the American company Macy’s as an example. (US office of personnel management) As in the case of many other organizational functions, planning is the first step of implementing an effective performance management system in an organization. At the beginning of each year, the Macy’s managers often meet each employee personally and discuss the strategies to improve their performances. During this meeting the mangers often take notes of the employee feedbacks and the formulate strategies to improve the individual performances. Macy’s know the difference in attitude and performance abilities of employees and give more attention to formulate strategies suitable for the individuals rather than groups. The Macy’s mangers often inform the employees about the expectation of the management about their performance in the coming 12 months. Thus, the employees get a clear idea about what is to be done and what are the expectations of the management about their performances in the coming year well before they start works for the coming year. Macy’s employees can submit their suggestions to improve their performances during their meetings with the managers. Reviews are a critical component of the system. Reviews give timely feedback to the individual. It is important to schedule formal reviews during the course of the year. These can be half-yearly or quarterly depending on the need. Structured mid-term reviews enable the organization to take stock of the performance during the given period. It gives the individual an opportunity to discuss his/her achievements during the given period and to look at areas of improvement. In a dynamic environment, it is important to keep abreast of market situations. Reviews can be utilized to make midcourse correction (Does performance appraisal benefit anyone?) Monitoring is the second step of any performance management system. Monitoring helps both the employer and the employee to stay in the track during the entire year. In the absence of proper monitoring, it is quite possible that the employees may forget their objectives and damage the interests of the organization. Monitoring always help the employees to review their performances periodically and make corrections if needed. Macy’s managers often advice or assist the employees whenever the employees fail to meet the expectations of the management. Developing is the third step in any performance management system. Training and development is part of any performance management system. Employees need training to develop their skills and abilities. It is not necessary that the performances of the employees continue strictly in accordance with the expectations or preplanned strategies. In such cases, the employer should assist the employee in the form of training and development. Moreover, the business climate always changes rapidly and an organization cannot stick with its pre-planned strategies always. The strategies planned prior to the beginning of works for the coming year, needs to be adjusted or changed periodically in such cases, to meet the necessities of the changing business environment. In such cases, employees need special training to assist them in tuning themselves to the needs of the changing situations. For example, the recent recession came quite unexpectedly and Macy’s forced to make lot of changes in the organization. Many of the Macy’s employees lost their job and remaining employees forced to do overtime work. Assessment or rating is the fourth step of performance management system. This is often done at the end of the year. During this process, the managers will compare the preplanned objectives against the actual performances of the employees. Each employee will be called to the manager’s cabin and they will discuss the performances of the employee based on the actual performance and the planned objectives. During this meeting the employee will discuss his strengths, weaknesses, or barriers which prevented him from improving his performances, with the manager. They will also consider the unexpected or unseen barriers which aroused during the course of the year while rating the employee performances. It is not necessary that all the employees performed equally better during the course of the year. Some employees should have exceeded the expectations of the management whereas some others failed to live up to the expectations. Rating or assessment helps the employer while deciding rewards to the employees. Rewarding is the fifth and final step of any performance management system. This is often done at the end of a working year to motivate the employees. Rewarding helps the employees to improve their performances further and further. Even underperformed employees will be motivated to improve their performance in the coming years, when they see the rewards obtained by their hard working colleagues. According to modern management concepts, work-life balancing is one of the key concepts which can make or break the employee performance. Macy’s have a bad reputation in ensuring work-life balancing of the employees. More than 1,300 Macy's employees in San Francisco picketed at the Union Square and Stonestown department stores on July 18, 2004. Macy's unionized employees, who have been working without a contract since June 23, are asking management for higher wages, more paid sick days, a cap on employee healthcare contributions and for the elimination of a system that allegedly "disciplines workers for getting sick." Under Macy's current policy, first-year employees don't receive sick pay until they are absent for more than four consecutive days. Second-year employees start getting paid on their third sick day, and not until they have been with Macy's for 10 years do they get paid on their first sick day (More than 1,300 Macy's employees picket SF stores) Macy’s is following a kind of totalitarian method in its employee management process. It always gives more priority to the interest of the organization over the interests of the employees. Extended work schedules, unexpected overtime work, lack of sick leaves or paid leaves etc are some of the major problems faced by the Macy’s employees. The Mac’s employees forced to work under unexpected schedules all the time. No Macy’s employee is sure about what is his schedule at the very next moment. Job schedules can be changed any time even during the same shift. Such constant changes in work schedules are demotivating the employees in Macy’s. So far we have discussed the importance and advantages of performance management system to an organization. But it should be noted that performance management systems have some drawbacks also. The major disadvantage of Performance management system is too much time consumption. The managers forced to take notice of individual performance always and it is difficult for them to advice each employees on various issues during the course of work. It is not necessary that all the employees take performance management system positively. In other words, employees always forced to work under pressure because of the constant and continuous monitoring of their work by the superiors. “If a manager does not keep notes and accurate records of employee behavior, they may not be successful in sending a consistent message to the employee” (Kathy). It is quite possible that the managers may keep some biases and prejudices about certain employees. Moreover, racism, stereotyping, gender discrimination etc are some of the major issues prevailing in most of the organizations. Thus it is not necessary that the managers may always give 100% accurate or reliable reports to the top management about the performance of a particular employee. In short, the performance report of an employee often reflects the nature of relationship between the manager and the employee. To conclude, performance management is a process which involves, planning, monitoring, developing, rating and rewarding. It helps the organization and the employees in in many ways; the organization can assess the performance and capabilities of the employees whereas the employees will get an opportunity to prove their abilities in front of the management. However, it is possible to misuse performance management system as in the case of many other organizational functions. Managers can make or break an employee with the help of their reports about the performances of an employee in a particular year. Works Cited 1. “Does Performance Appraisal Benefit Anyone?”. Web. 13 June 2011. 2. Kathy. “What are the Advantages and Disadvantages of Performance Management?”. 2009. Web. 13 June 2011. 3. Marconi. “Starting the Performance Management Cycle”. 2011. Web. 13 June 2011. 4. “More than 1,300 Macy's Employees Picket SF stores”. 2004. Web. 13 June 2011. http://articles.sfgate.com/2004-07-18/news/17432962_1_macy-s-employees-mike-borstel-sick 5. “Performance Management -- Basic Concepts”. Web. 13 June 2011. 6. US office of personnel management. “Performance Management”. Web. 13 June 2011. Read More