Developing and Managing Performance in Wellton NHS Trust - Case Study Example

Developing and Managing Performance Name Course Code Course Instructor Date Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Advantages and disadvantages of IPRP 3 2.1 Improving organisational performance 3 2.2 Suitability of IPRP to the Trust’s business environment 5 3.0 Barriers to the effective design and implementation of IPRP schemes 6 4.0 Alternative reward approaches 8 4.1 Team-based reward system 8 4.2 Total Rewards System 9 5.0 Conclusion 9 6.0 Reference List 10 1.0 Introduction In 2013, Wellton NHS Trust initiated a performance-related pay scheme in conformity with shifts to the NHS Agenda for Change. Initially, employees would receive automatic annual increments that moved upwards through the pay points annually. The recent changes demand that movement through the pay increments would depend on employees’ individual performance. Therefore, this report seeks to provide the CEO and HR Director with a decisive assessment of individual performance related pay (IPRP). It also explores the advantages and disadvantages of IPRP as a management tool in the NHS. Lastly, it evaluates the effective design and implementation of IPRP schemes, and the alternative reward models that can replace IPRP. 2.0 Advantages and disadvantages of IPRP 2.1 Improving organisational performance IPRP refers to a pay progression system that provides individuals with financial rewards basing on their work performance. The IPRP is essentially individual performance-monitoring tool capable of boosting career development. It has several advantages, as performance management tool at Wellton NHS Trust. The IPRP improves organisational performance in several ways. When the IPRP scheme is developed into a performance culture, it can improve employee’s morale, as well as provide them with a motivation to achieve the organisation’s performance goals. Ultimately, the IPRP is a direct incentive for workers to attain the set work performance targets when direct supervision is brought into question (Boachie-Mensah & Dogbe 2011). The IPRP would encourage employees to comply with work standards to meet an organisation’s expectations, as it is rooted in performance standards. According to Bach and Edwards (2013), as performance appraisals of the employees are based on performance standards, employees would be driven to attain these standards. In which case, for an employee to receive the financial reward, he or she has to meet the performance expectations of the employer. Additionally, the IPRP scheme would provide a direct incentive to Wellton NHS Trust’s employees. Essentially, employees would make every effort to achieve higher ratings by improving their performance and work productivity. In addition to this, Heery & Salmon (2002) explain that when the scheme is consistently applied to achieve high performance standards, employees would be encouraged to maintain their high work ratings. The employees would also be motivated to concentrate more on what aspects of work they need to fulfil to improve their work techniques when it is directly connected pay. The IPRP would motivate Wellton NHS Trust’s employees to work harder, as money can effectively motivate employees. This also means that it can be viewed by individual employees as a goal in itself, or as a mechanism or satisfying employees or given them a sense of recognition. These also have several implications. The IPRP provides employees with an immediate incentive to attain definite work targets. Consistent and persistent application of the IPRP can also ensure that when employees are provided with direct financial rewards, they get to understand that the employer recognises their contribution. 2.2 Suitability of IPRP to the Trust’s business environment The suitability of the IPRP to Wellton NHS Trust can be brought into question, because of its weaknesses. These include: The IPRP may lead employees to demonstrate undesirable behaviours at the workplace. Some researchers like Suff et al. (2007) have argued that it cannot be strongly assumed that paying people more through IPRP actually encourages them to improve their performance or work harder. In fact, in some circumstances, the IPRP can be viewed as a one-dimensional pay for performance model that is coercive and may even encourage employees to exhibit wrong types of behaviours. For instance, it centres on individual contributions while the task may call for working in teams. In this way, teamwork and corporation among employees can be discouraged, particularly because the goals have been set on individual basis. The IPRP scheme provides incentives that only ensure temporary compliance. As Towers (2004) explains, the schema may also lead to a scenario where employees focus on short-term organisational goals and disregard the long-term goals. This is because goals that are scarcely centred as the rewards tend to encourage employees to look out for short term projects that give them immediate rewards. These also imply that the employee review process is likely to be affected unfavourably because the IRPR emphasises financial rewards instead of developmental needs. From a different perspective, the employees are also likely to become unmotivated when the goals are unattainable. 3.0 Barriers to the effective design and implementation of IPRP schemes It is widely acknowledged in research literature that when the implementation of IPRP fails, it is mostly because the process of implementation and management of the IPRP scheme failed rather than poor design of the scheme (Suff et al. 2007). At any rate, effective design and implementation of IPRP schemes has several barriers. Lack of employee support is a major barrier to the effective design and implementation of IPRP schemes. According to Suff et al. (2007), employees may distinguish several differences in performance. Consequently, they may desire that the IPRP is designed in a way that it provides reward differentially, so that those who make greater contributions are given greater rewards. At this level, the challenge may be that they disagree with the management on what makes ‘good performance,’ such as when it emphasises inputs rather than outputs. It may also imply that they lack trust on the integrity or the competence of the management in making the right decisions, they are likely to resist attempts by the management to conduct performance appraisal in order to determine who should be given the financial rewards. Therefore, the employees’ expectations regarding the competence of the management in delivering a fair and an effective IPRP scheme is, as a result, a crucial factor in the effective design and implementation of the scheme. Employee resistance: Employees may also resist attempts to implement the IPRP when they perceive that the IPRP schemes may be unfair or not sensible. This may lead them into thinking that the IPRP schemes bring little value to the company. For instance, in a study by Suff et al. (2007), it was established that employees would tremendously support IPRP in principle although they would withdraw their support during its implementation when they perceive that they would deliver small rewards or operate unfairly. This is particularly the case when the employees perceive the bonus payments to be just a small fraction of the overall salary or wage. Lack of support from the top-level management is also a barrier to effective design and implementation of IPRP schemes. According to Suff et al. (2007), successful implementation of any performance measure or scheme in an organisation is contingent on the overall commitment of the top level management. This is because the scheme would not be treated seriously by the frontline employees. Additionally, the managers may be reluctant to provide the scheme with sufficient financial resources to see its full implementation. Bevan (n.d.) also explains that their commitment would also enable the human resource department to execute the scheme formally. Poor training and knowledgebase of the managers who have been assigned the role of implementing the IPRP scheme may lead to ineffective designing of the scheme, as well as its poor execution. Gillespie and Baird (2013) explain that this is potentially the case because the scheme depends on the appraisal of individual workers, which is usually performed by an immediate line supervisor. Therefore, if there is a general feeling among employees that the managers who are to perform the appraisal are incompetent, biased and prone to prejudice, they are likely to resists attempts to implement the IPRP. According to Suff et al. (2007), in order for the scheme to be implemented effectively to improve employees’ work productivity and efficiency, the manager should be provided with effective training. The training programmes should be on effective implementation of the IPRP, and if this is not the case, then the scheme may be interpreted poorly to the employees. Poor definition of the purpose of IPRP and poor understanding of its significance also contribute to its poor designing and implementation. When the purpose of the IPRP is poorly interpreted to the employees or the managers, they would misinterpret its overall purpose of contributing to greater work performance and productivity. In such scenarios, some managers may perceive the scheme to be costly. According to Qureshi et al. (2010), organisations need to increase their focus on improving the definition of the performance measures to ensure there is a level understanding of its significance. 4.0 Alternative reward approaches 4.1 Team-based reward system In a typical hospital setting, team performance is crucial for effective patient case. According to Murphy (2015), having a reward system that can ensure that employees work collaboratively and in a productive manner as part of team is crucial. Therefore, a team-based reward seems to be a logical means of performance measurement that centres on teams, as well as the quantity or quality of work the teams produce. The team-based reward system centres on providing financial rewards to a team as whole, rather than individual employees who form part of a team. It is also anchored in the assumption that providing rewards to a team would promote greater level of quality and quantity work than the case for individual reward systems, such as IPRP. Additionally, from the perspective of performance evaluation, the team-based reward system makes it simpler and less complex for the performance of a team to be measured, rather than that of individual employees. Therefore, it can be reasoned that management of performance and rewards on hand for attaining the level of desirable performance is complimentary in nature, and can be less time consuming when it comes to monitoring a team-based structure. Indeed, in certain organisations like hospitals, it is more beneficial to refrain from applying individual performance targets and to instead centre on collective performance plans and reward systems, as team-based encourage employees to take up a collaborative approach to performance. Hence, the team-based approach can encourage organisations to effectively attain shared goals. 4.2 Total Rewards System Murphy (2015) describes total reward system as a mix of complimentary schemes that seek to maximize the possibilities of employees to see their work as ‘rewarding.’ It may also consists of a situation where the rewards are flexible, or variety goes beyond finance or pay-related. Essentially, roles are allocated into varied grades that have divergent rewards, and which in turn motivates workers to improve their performance to attain progression. According to the Local Government Employers (n.d), the total reward system also consists of combining several reward practices to strengthen and push for higher levels of individual employee performance by encouraging teamwork among individual employees. Therefore, rather than solely choose IRPR on individual basis or team-based incentives on their own, combining two incentive rewards, such as team-based approach and IPRP, can effectively motivate performance of employees at individual and team-based level. 5.0 Conclusion As established, once the Wellton NHS Trust developed the IPRP scheme into performance culture, it can improve employee’s morale, as well as provide them with a motivation to achieve the organisation’s performance goals. The IPRP would also encourage employees to comply with work standards to meet an organisation’s expectations, as it is rooted in performance standards. Still, the suitability of the IPRP to Wellton NHS Trust can be brought into question, because it provides incentives that only ensure temporary compliance. It also discourages teamwork and corporation among employees. Lack of employee and top management support is a major barrier to the effective design and implementation of IPRP schemes. As an alternative, the Trust can use Team-based reward system and Total Rewards System. 6.0 Reference List Bach, S & Edwards, M 2013, Managing Human Resources: Human Resource Management in Transition, New York, John Wiley & Sons Bevan, S n.d., Performance Management HR Thoroughbred or Beast of Burden? , viewed 23 Oct 2016, Boachie-Mensah, F & Dogbe, O 2011, "Performance-Based Pay as a Motivational Tool for Achieving Organisational Performance: An Exploratory Case Study," International Journal of Business and Management, vol 6 no 12, pp.270-285 Gillespie, M & Baird, A 2013, Empower, Enable and Encourage: Successfully implementing performance management in public health, 24 Oct 2016, Read More