Performance Management and Employee Relations - Assignment Example

Performance Management and Employee Relations I. Purpose of performance management, appraisal and review and the link with business objectives In order to evaluate the performance management followed by the specific firm, we should primarily refer to its main parts as well as to its role within a business organization. In this context, the performance management has to be considered as a highly integrated managerial scheme which includes not only the achievement of a specific set of predetermined goals, but it also covers the particular methods of communication and control that have to be used in order for the above target to be reached successfully (Bourne et al., 2003). Under these terms, there are specific sectors, like the human resource management who have a significant role to the design and the operation of performance management, like the strategic management and the human resource management (which can also be viewed as a main part of the former). The first of the above managerial sectors refers more to the design of a general plan of action within a business environment whereas the human resource management is more connected with the role, the supervision and the influence of the employees to the operation and the performance of any organization. Traditionally, organizations have tried to use several techniques in order to enhance the capabilities of their employees like the ‘train and development schemes’ (Brown et al., 1997) although the relevant results have not been always positive given the amount spent for the above target (Lawler et al., 2003). In the specific firm, the human resource management is closely connected with the business performance and this is the reason that it has to be reviewed and evaluated accordingly. At this stage the view of Lawler et al. (2003, 24) that ‘the knowledge economy, with the proliferation of companies that rely on knowledge-based competitive strategies, offers an opportunity for HR departments to alter their role in the corporation fundamentally and become true value-adding strategic partners’ seems to be totally justified. However, business objectives as presented in the case study seem to be differentiated from the results produced by the human resource management which has been used in the specific case. More specifically, the benefits from the strategies used by the firm’s human resource management do not seem to lead to the enhancement of the firm’s performance but they rather have an opposite result. As set in the case study, only one successful product is produced every three years which can cause a significant disadvantage for the firm towards its competitors in the specific market (as a result of the failure to reach the productivity rates of other firms in the pharmaceutical sector). The above phenomenon can be explained either by the absence of a specific and appropriate human resource strategy that can link the business objectives with the human resource sector of the firm (a target which could be possibly achieved through the application of an appropriate strategic skills analysis technique, Summers et al., 1997) or by the absence of an effective ‘key of measurement’ that could be applied to all the firm’s particular activities offering a high level of business integration and as a result a high rate of performance (Walker, 1998). On the other hand, the staff of the laboratory is rather ‘academic – orientated’ than ‘commerce – orientated’, an issue which has to be considered very carefully when designing any relevant human resource strategy for the specific firm. At the same time the whole structure and the operation of the specific department cannot meet the business objectives, which are focused on the production of successful new products within a very short period of time as well on the achievement of high profits (as the major target of any firm in the market). On the contrary, the research activities and the time management as can be observed in the specific department are more academic related and refer to the particular individuals- researchers rather than directly to the enhancement of the firm’s performance. In this way, the performance management as designed and operating in the specific department of the firm should be considered as totally independent from the business objectives and mostly connected with the targets set by the individuals that participated in the specific research project. II. Advice on good practice for line managers when conducting an appraisal interview According to Conner (1996) ‘to improve its effectiveness and have greater impact, the human resource function must understand how to add value in the organization by helping line managers align HR strategies, processes, and practices with business needs; This will require HR professionals to perform increasingly complex and at times paradoxical roles; (Conner et al., 1996, 38). In this context, the efforts of human resource management should be focused to the following directions: ‘a) to enable employees to seek greater fulfilment in their work through person-to-person career counseling creates significant value for the organization through enhanced retention, b) a person-to-person career counseling should be offered to the extension that such an activity creates greater workforce flexibility by enabling employees to respond rapidly to a changing environment and customer needs; The above inititiative should also provide an effective means to broadly address the needs of different segments of the employee population - for example, addressing the needs of minority groups, which are of increasing importance with the growing diversity of the workforce, c) the provision of support to the employees regarding their career development, to the level that such a support could address the different segments of the employee population and track them with appropriate metrics; d) Particular emphasis is also required to support the retention needs of employees with five or fewer years of service - a vulnerable group. This may include, for example, provision of orientation and development support and internal networking opportunities’ (Elsdon et al., 1999, 41, 45). Specifically, for the particular firm, line managers have to follow a series of practices when conducting an appraisal interview. At the first stage, line managers have to use a detailed questionnaire which has to refer not only to the academic credentials of the participant, but also to issues connected with the firm’s objectives (as explained to the participant at an introductory phase of the interview). It is not necessary that the whole business strategy is developed in the above questionnaire, however there should be included questions that lead directly to the aims and the targets set by the specific firm (as they can also be observed to a significant point to similar firms of the pharmaceutical sector). On the other hand, the interview should be also based on the results of a ‘psychological test’ as carried out through a separate questionnaire in order to measure the behaviour of the participant under specific circumstances that are very likely to appear in the specific work environment. Under the above terms, the interview should be carried out in 4 phases: The first one should include a presentation of the firm’s position in the market as well as its main targets and objectives (presented generally and not in detail). At a next level (2nd phase) the candidate should be asked to fill two questionnaires, one related with the specific role (i.e. the position for which the interview is conducted) while the other should include questions of general content from which specific assumptions for the participant’s behaviour under specific circumstances (related with the work environment and the demands of the particular position) could be extracted. In the 3rd phase, a detailed discussion with the firm’s line managers could help to the formulation of a more accurate decision regarding the appropriateness of the specific candidate. During this phase, a more detailed presentation on the firm’s structure and operation could be also take place. Finally, at the 4th phase, the candidate should be left free to explain his/ her particular views on the specific firm as well as the level of his interest regarding a specific position after the exchange of all the above mentioned information (personal data, capabilities and aims and firm’s targets and performance). Generally, the line manager should avoid proceeding to a very analytical presentation of the firm’s structure, plans and targets and should be limited to the ones already known by the general public through the firm’s daily activities. On the other hand, line manager should avoid a very ‘formal’ environment (regarding the interview conducted) but he/ she should prefer a more ‘friendly’ one which could lead to the production of more realistic results. III. Suggestions of how performance targets should be agreed and reviewed At a first level it could be noticed that the communication between the staff could be characterized as very satisfactory, a phenomenon which can be possibly explained by the distance that separates the specific department from the rest of the firm (a fact that lead to the development of a friendly climate among the staff). However, the existence of such a practice could lead to the creation of severe problems when referring to the application of the rules and the principles set by the management team of the organisation. More specifically, according to the practice held currently by the staff of the specific department, the hours and the duties of the staff do not follow a specific order but, instead, they are formulated in accordance with the needs and the demands appeared on a daily basis. In this context, any suggested restructuring of the existed strategies and practices should be based on the ethics and the principles of the specific organization (Fulton et al., 1998). In order for the performance of the firm to be enhanced, it is necessary that the particular performance targets are agreed with the staff and reviewed on a regular basis as of their feasibility. The above procedure should be designed and operate as an independent scheme within the firm’s human resource strategy in general. This view can be supported by the fact that the research laboratory of the specific pharmaceutical is organized as a rather ‘independent’ unit within the organizational context, an issue that can lead either to positive or negative results for the firm’s overall performance in accordance with the methods and the techniques used for its administration and supervision. Under the above mentioned, the director of the laboratory should be considered as the ‘key – person’ for the design and the control of all the activities taking place within the specific department. At a first level, the director should proceed to the design of the research projects as should be carried out within a specific time period, the resources used and the results required. At a next level the introduction of a ‘communication scheme’ regarding the staff of the specific department should be considered as necessary. More specifically, meetings should be held on a daily and weekly basis as well as when specific emergent circumstances impose such a procedure. Staff should be gathered daily and discuss on the day’s plans of research, the role and the duties of each particular member, the management of time as well as the feedback of every member of the staff regarding the research work made in the previous day. At the end of the week, the progress of the work made during the last 5 days should be discussed between all members of the staff followed by the justifications of the procedures and the techniques followed as well as the consumption of time regarding a specific research project. The performance of each member of the staff should be then evaluated by the director of the laboratory who should decide on the continuation of the participation of a researcher in a particular research project. In this way, the work made within a specific period of time could be more effectively controlled whereas the member of the staff would be more informed on the desired targets and objectives regarding a specific research project (Elsdon et al. 1999) an issue that if combined with the application of a pay and reward – system (see analysis below) could lead to the significant improvement of the firm’s performance. IV. Factors that the company should consider if it decides to link its pay and reward system to performance The organizational structure and culture as formulated in the specific department, is characterized by flexibility (in working hours and in duties) and adaptability (in accordance with the needs of the particular cases). On the other hand, the existence of a friendly climate has enhanced the communication as well as the clients’ satisfaction. Under these terms, the evaluation of existing motivation standards should be based on the above facts and norms. In the field of literature, the reference on motivation has been very limited, and according to Ashforth (1995) overly rational. Theories of emotion based on expectancy theory (Vroom, 1964) and behavior modification in organizations (Luthans et al. 1975) heavily rely on rational, logical and verbal processes and exclude emotion almost entirely. Moreover, Ashforth (1995, 97) presented the background for this liaison among motivation, emotion and leadership: ‘Leaders may persuade with logic, but they motivate through emotion. Leaders must come to grips with the challenges of emotion, a key driver of productivity, quality and other factors that lead to business success. The words "motivation," "emotion" and "motion" all derive from the same Latin root meaning "to move." When you want to motivate people to take action, engage their emotions’. For the above reasons in order for the management team of the firm to successfully link its pay and reward system to performance (regarding the research department of the firm), it should consider carefully the following issues: a) current managerial style as applied in the firm’s research laboratory is characterized by the absence of strict rules regarding the duties of each particular member of the staff and the management of time, b) the control over the staff’s work seems to be absent – each particular member is working on an individual basis rather than as a member of a team, c) each member of the staff works on his/ hers own ideas rather than on projects designed by the laboratory’s central management team (which by the way seems to be absent and that all the decisions regarding the specific department are made by its director), d) each researcher is also working on personal projects which are commonly published in the academic press, e) the whole structure of the department seems to be characterized by the provision of ‘freelance’ work rather than work for a specific employer. Under the above terms and giving the fact that the terms and conditions of the work provided by the researchers of the specific department will remain of the same form, the application of a pay and reward system should be linked to the performance of each particular employee – researcher not only to his/ her own field of knowledge (or his/ her personal achievements) but on the progress made regarding the research on specific products which are going to be used solely by the company and not by the researcher himself. The absence of specific borders and control regarding the work provided by the researchers of the specific department of the firm can make the application of such a system a risky business strategy unless reviewed carefully as of its terms and conditions. Moreover, it should be more wise for the company to follow a more ‘independent’ scheme of payment of the staff of the specific department – like a freelance – type agreement of payment – in case that practices of work retain their current structures. References Ashforth B. E. (1995). Emotion in the workplace: A reappraisal. Human Relations 48(2): 97 Bourne, M., Franco, M. and Wilkes, J. (2003). Corporate performance management. Measuring Business Excellence, 7(3): 15 Brown, K.G., Durham, C.C., Kristoff, A.L., Kunder, L., Olian, J.D., Pierce, R.M. 1998. Designing Management Training and Development for Competitive Advantage: Lessons from the Best. Human Resource Planning, 21(1): 20-32 Conner, J., Ulrich, D. (1996). Human Resource Roles: Creating Value, Not Rhetoric. Human Resource Planning, 19(3):38-46 Elsdon, R., Iyer, S. (1999). Creating Value and Enhancing Retention through Employee Development: The Sun Microsystems Experience. Human Resource Planning, 22(2):39-47 Fulton, R., Maddock, R. (1998). Motivation, Emotions, and Leadership: The Silent Side of Management. Quorum Books. Westport, CT Lawler, E.E., Mohrman, S.A. 2003. HR as a Strategic Partner: What Does It Take to Make It Happen? Human Resource Planning, 26(3): 15-31 Luthans F., Kreitner R. ( 1975). Organizational behavior modification. Glenview, IL: Scott, Foresman Summers, S.B., Summers, T.P. 1997. Strategic Skills Analysis for Selection and Development. Human Resource Planning, 20(3): 14-19 Vroom V. H. ( 1964). Work and motivation. New York: Wiley Walker, J.W. 1998. Are We Using the Right Human Resource Measures? Human Resource Planning, 21(2): 7-10 Read More