Performance Management Work Flexibility and Reward System - Case Study Example

Introduction An effective internal planning and control is crucial to the success of a business. Given the current adverse economic condition and global market forces, managers of MPC Finance are being challenged to ensure that they make the right decision when it comes to decision making for the allocation of the available financial resources for HR strategies. To increase the success rate of each business, there is a strong need for MPC Finance’s manager to pay close attention to its HR department in order to improve the businesses’ overall financial strategic planning. With the goal of gathering competitive workers to join the work force, the human resources department handles not only the recruitment and selection processes but also the development of HR strategies that will motivate and improve the overall performance of employees aside from staying loyal to the company. In line with this, implementing a monetary reward system and the provision of training and development are the two of the most commonly used strategies that will increase employees’ work motivation and long-term work performances. The top management of MPC Finance has received complaints regarding the long working hours, high stress levels which make employees unable to attain the group’s targets, lack of compensatory reward, the presence of bullying tactics, and lack of promotional opportunities in the regions. To prevent competitive employees from leaving the company, MPC Finance should appoint and establish competitive HR department to solve internal problems related to human resources. In line with this, recommended solutions and other real life examples will be provided in order to maximize the productivity and profitability of the company. Performance Management, Work Flexibility and Reward System Performance management integrated within the company’s organizational culture and HR department identifies the success rate and effectiveness of reward system, training and development including other forms of HRM strategies within the business organization. With the constant formal reviews of employees’ or a team’s performances, the use of performance appraisal enables the HR managers to determine whether there is a need to change the company’s existing reward system and/or training and development program. The fact that absenteeism and labour turnover in the regional offices is three times that in the headquarters offices proves that some of the existing MPC employees are not satisfied with their current job. Because of long working hours, the stress levels of employees increased. For this reason, competitive employees of HR Finance are not able to achieve the company’s target. Aiming to reduce the work related stress, HR management should offer work flexibility to employees. Flexibility is the process wherein employees within an organization could immediately respond to the changing circumstances within the work place. It means that each employee has the benefit to work on flexible hours as long as he/she can deliver his/her job on time. In line with this, the HR manager could effectively implement the concept of flexibility at work by offering new employees the option to have a part-time job, flexy time at work, job sharing, and unpaid leave. Among the flexible type of work, part-time job is the most commonly used in all types of businesses particularly for low-salary positions (Secord 2003, p. 173). As part of implementing part-time job, the HR manager of MPC Finance should consider providing its employees with fixed weekly scheduled hours. This will increase the chance that part-time employees would be available to do their jobs at a given time frame. For flexy time at work, HR managers should implement strict rules and regulation that could effectively motivate an employee to submit their job before or on a specified period of time. The company follows a top-down hierarchy. The problem with this organizational structure is the communication line between the top- and lower management team. Between pay-for-performance and intrinsic rewards such as the promise for future promotional opportunities and simple praises can be more effective in terms of motivating employees to increase their work productivity. “Pay for Performance” is not always the best solution to a problem (Lawler 1971, p. 151). There is no problem with the use of graded salary structure. However, MPC Finance should avoid gender bias when it comes to giving employees the opportunity for work promotion. With regards to the problem related to pay-for-performance option, Deci (1988) explained that it is possible for the employees motivation to be lowered using monetary incentives since it lowers the company’s ‘intrinsic rewards’. Performance Management & the Provision of Training and Development As mentioned by Adam Smith, maximizing the use of the available human capital is one of the four most important fixed capitals in business. In line with this, division of labour is necessary behind the business and economic growth of a nation. However, redundant and repetitive tasks could prevent employees from developing and increasing their productivity (Dhamee 2005). To avoid redundancy at work, the provision of necessary training and development is important not only to improve the acquired skills and talents of each employee but also to increase the company’s profitability. Offering competitive and flexible training and development programme is one way of encouraging competitive employees to stay employed with MPC Finance. To enhance the skills and knowledge of MPC Finance’s employees, the company should offers its employees the option to undergo an on-the-job training, online training, face-to-face training, financial support for further studies, personal coaching and guidance depending on the preference of each employee. Since MPC Finance is planning to expand its business in mainland China, the Indian sub-continent, and some of the former soviet bloc countries in eastern Europe, the companies training and development programme should include not only the business culture of each target countries but also the use of sophisticated IT network. Basically, the use of this technology would make communication between MPC employees in two different countries much easier. Similar to the strategy used in assessing the effectiveness of a company’s reward system, performance appraisal can also be used in testing the success rate of the company’s training and development programme. In case the training and development programme implemented by a company has been successful in terms of increasing the productivity and loyalty of its employees, the company’s marginal propensity to consume is likely to increase close to one. In case the training and development programme was not effective, the company’s marginal propensity to consume is likely to decrease close to zero. This concept is true since the company only spent money in implementing the training programme but failed to gain any extra profit from the said activity. The Presence of Psychological Contract and Whistle-Blowing Psychological contract is a form of contract of employment regarding the mutual beliefs, perception, and obligations between the employer and employee (Cullinane and Dundon 2006). It is somehow pertaining to the positive perception of employees regarding the company. Basically, the act of breaching the psychological contract between employer and employee may result to a serious decline in employees’ loyalty to the company. Therefore, employees are expected to become less committed to their work. Normally, there is a higher chance that employees would remain loyal to the company in case this group of workers feels that the company is taking care not only of their financial but also their emotional needs. Given the global economic slowdown, the act of implementing an aggressive downsizing or sudden outsourcing of jobs would trigger the deterioration of the psychological contract (Lester and Kickul 2001). Whistle-blowing is referring to the act of raising concerns about a company’s wrongdoings such as violating the law or causing a serious threat to the public’s interests. Whistle-blowing can also occur within the business organization. Since recruitment process at MPC Finance happens through word-of-mouth, some of the highly qualified employees were deprived of the opportunity for work promotion. As a result, many of MPC’s highly competitive employees are not performing at their best abilities. There is a rumour that a large group of white collar union is approach MPC’s employees. To counteract the adverse effects of whistle-blowing, HR manager should exert an effort to win the support of its employees by regularly listening to their concerns. By doing so, the HR manager of MPC will be able to prevent the company’s existing employees from becoming one of the whistle blowers that aims to hurt the company’s market status and overall business performances. Cultural Management Tthe study of cultural diversity within a business organization is focused on acknowledging one or more socio-demograhic traits like gender, race, ethnicity, and age (Janssens and Zanoni 2005). As a paradigm which forms a strong pattern of acceptance and respect among the employees, cultural diversity at work – also known as multiculturalism is about integrating culture in terms of employees’ age, gender, mental or physical abilities and characteristics, race, ethnic heritage, sexual orientation, geographic location, work experience, income, religious beliefs, language spoken, organizational role and level, communication style used, family status, work style, and/or educational background (Loden 1996). Since MPC Finance is thinking about implementing organizational changes, there is a need for its managers to strengthen its organizational culture. This strategy will not only increase the chance that employees would support the need for a change but also make the implementation of the company’s future expansion plans a lot easier. Given that MPC Finance is planning to expand its business through merger or acquisition, managers should start improving not only the communication line among the existing employees but also promote the importance of work diversity. There are many ways in which cultural diversity at work and organizational culture can be strengthened. One of the major factors that causes problem in managing diversity is the behaviours of people within the working environment. (Henderson 1994, p. 133) In line with this, HR manager of MPC Finance should exert an effort in making employees feel respected and open to organizational change. This strategy is considered as one of the best ways in promoting cultural diversity within the working environment. It will also encourage MPC’s current employees to accept the need to adopt with the company’s IT network. Ever since diversity at work becomes a significant part of the modern business transaction, the role of HR managers is no longer limited with the need to study, search, and implement new diversity paradigms which could strengthen cultural diversity at work but also to solve and minimize organizational tension and conflict that may arise out of implementing the organizational changes. (Janssens and Zanoni 2005; Muncherji and Gupta 2004; Carey 1999) To effectively minimize organizational tension and solve organizational conflicts, HR manager should be able to establish two-way communication among the top ranking and low ranking employees. In support of cultural diversity, HR management should establish and implement strong organizational policies and practices that will encourage employees to support and respect organizational change, organizational culture, demographic differences, technical, and cognitive diversity which are all necessary in increasing the overall work performance and employees satisfaction at work (Kochan et al. 2003). In line with this, Schein’s Model mentioned the three levels of organizational culture as: artifacts, espoused, and the basic underlying assumptions. To ensure that employees within MPC Finance would be ready for future business expansion, the company should make it a challenge to remove barriers related to artifacts, espoused values and beliefs, and some basic underlying assumptions which could influence employees’ perception, feelings, and thoughts. The Promotion of Industrial Relations Industrial relations focus its study on employment relationship. Because of weak industrial relations, internal conflict arises between the employer and employees. In case internal conflict arises between the employer and employees, there is a high possibility that the company’s productivity and profitability would decrease. Likewise, it is also possible that the high employees turnover rate and absenteeism to increase. Implementing a win-win negotiation process between employer and employees is necessary to solve internal conflicts. Once internal conflict between employers and employees is resolved, HR manager can have the opportunity to regain employees’ loyalty and confidence with the company. Conclusion Performance management appraisal is a useful tool in determining whether or not the reward strategy or training and development programme implemented by the HR department has been effective in terms of increasing the long-term profitability of the company. Given the case of MPC Finance, HR manager should establish a strong organizational culture that will strengthen industrial relations, prevent the breaching of psychological contract, and avoid whistle-blowers. *** End *** References Carey, L. E. (1999). ‘Ethical Dimensions of a Strategic Approach to HRM: An Australian Perspective’. Asia Pacific Journal of Human Resources , Vol. 37, No. 3, pp. 53 - 68 . Cullinane, N., & Dundon, T. (2006). he psychological contract: a critical review. International Journal of Management Reviews , Vol. 8, No. 2, pp. 113 - 129. Deci, E. (1988). The Effects of Contigent and Non-Contingent Rewards and Controls on Intrinsic Motivation. in. Baker G.P., Jensen M.C., Murphy K.J. Compensation and Incentives: Practice vs. Theory. Organizational Behavior and Human Performance , XLIII(3):593 - 616. Dhamee, Y. (2005, April 15). Victorian Web. 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