Performance Management System - Case Study Example

Performance Management System

Introduction

With the advancement of the human resource function, management of performance in an organization has become inevitable in a bid to compete favorably within a given industry. The performance management system refers to a systematic approach through which mutual goals are set between employees and their supervisor, continually review progress as well as frequently give feedback. Notably, the system targets improving the performance of individual employees through defining roles and setting achievable targets which translate into the improved overall performance of the organization. Performance appraisal is a subsection of the system, and it is useful in examining and evaluating the employee’s performance against the set targets and documenting the results. The recorded information is used to convey feedback to the employee stating where improvements are needed. Despite the fact that a performance management system is essential to the organization, setting clear objectives, progress review, rewarding and involvement of line managers is inevitable for performance improvement of the organization.

Performance appraisals are critical to the organizations and may be conducted in various forms like the 360-degree feedback, management by objective among others. Importantly, assessments help in identifying good and poor performers, which information is useful in determining who to retain or terminate when the decision has to be made. Not only does it assist in the documentation of personnel decisions like promotions or discipline, but also provides an avenue for giving feedback to the employees about their performance. Besides, the appraisals are instrumental in the identification of employee training needs and also staffing gaps which, when addressed to improve the organization’s performance. The ability to set goals or targets that feed into strategic objectives of the organization is another merit of the performance management system. Ultimately, organizations can benefit from appraisals when incorporated into an inclusive performance management system for the accomplishment of the strategic objectives.

Why the System Did Not Work

Objectives not set

The goals were not set in time. Despite the fact that the organization was large, it seems to have lacked proper planning. Probably, it is because leaders failed to come up with annual objectives and in the instances they did so, it was untimely. Yearly goals help in giving direction to the organization, and they are usually formulated from the strategic plan. More so, they lay a foundation upon which targets or Key Performance Indicators (KPI) are determined. Markedly, employees are always evaluated based on the KPI to establish their performance. Without the agreed-upon objectives, it is tough to come up with result areas through which, employees are measured against. Therefore, the absence of proper guidance regarding annual objectives was the reason for the increase in the failure of the system.

The system was quickly introduced

The introduction of any new system into the organization requires ample time. More so, before its launch, research needs to be conducted to find out the perception of the people who will be using the system. It is essential to know their attitude because it will find out whether they will support it or not. Also, there is a need for the system to cater for the people who are meant to benefit from it. For instance, the organization needed to take time to identify how the system is likely to work and formulate the role that line managers had to play regarding this system. However, because the system was introduced quickly, some of the issues were not looked at; thereby, leading to the resentment of the system.

Rewarding and compensation system

The rewarding system of any organization should be comprehensive enough to accommodate all employees. Ideally, rewarding should be based on one's performance whereby, when one exceeds the agreed upon standard, rewards are given. In instances where the criteria is not met, then an improvement performance plan should be developed to address the gap. Rewarding may happen in many ways, such as open recognition, giving certificates, shopping vouchers, small celebrations among others. In regards to the organization, the system limited the rewarding of outstanding performance on salary increment only and yet it abolished the annual increase that was related to the cost of living. As such, the system sought to limit its expenses by eliminating the value of living increment yet was beneficial to all staff and introduced salary increment which, only benefited a few.

Roles of line managers not defined

Due to the fact that the organization is a large one, line managers are inevitable in this kind of business setting. Line managers provide leadership to the various departments of the organization. More to that, line managers are responsible for setting objectives for the department, agree on targets with their respective employees as well as evaluate their performance and give feedback. Because of the central role they play in the performance management system, they are part and parcel of it and in many instances participate in the development of the system. The uncertainty that surrounded the role of line managers in this system indicated that they were not consulted initially and yet they are tasked with inputting into the system. Evidently, the information from the appraisals conducted by the internal body was vital in determining the performance of employees.

Grading

The performance-related pay employed grading as the method through which performers were determined and was used to determine salary increment. Seemingly, through the assessment that was supported by the grading system, one would move up two increments, but remain on the same level or move down one increment. Unlike the previous one where no one experienced a decrease. Although the grading ranged from Grade A-E, the number of those who accessed the grade was limited to only 5% within the department. Apparently, this was viewed as unfair, demotivating and affected the zeal for pursuing outstanding performance; after all, one may fail to make it among the acceptable percentage. Consequently, the grading system acted as a basis for establishing outstanding performance for salary increment but was limited to a small percentage.

Issues to address in Reforming the System

Rewarding and compensation system

The organization will have to expand its rewarding and benefits system to include other ways through which, employees are rewarded. Remarkably, this will limit its dependence on salary increment as the only method of rewarding good performance. Although individual performance is needed, it should not be achieved at the expense of teamwork, yet this is the case where rewarding is in terms of salary increment. Making using of other reward and compensation methods like bonuses, shopping vouchers, certificates of recognition, and the introduction of some fringe benefits, where applicable is good for the company. Consequently, rewarding outstanding performance is good since it motivates employees. However, there is a need to categorize as well as introduce other methods of compensation to strike a balance between individual and team performance.

Set performance standards

Having set and defined the annual objectives, targets will also be agreed upon between the line manager and the employee in a given department. Ideally, the goals will constitute the standards upon which performance will be measured. Also, specific targets will be defined that will enable both line managers and employees to undergo the performance appraisal process with objectivity. The process helps to identify those who are good performers and reward them accordingly as well as help in identifying employee training needs. Notably, this identification is useful for addressing personnel development needs which will improve the performance of individuals, teams as well the overall performance of the organization. Therefore, setting and agreeing to the standard of performance between the employees and their managers will guarantee the acceptance of the results from the system since they will receive them with confidence.

Career Development

Career development is yet another aspect that the human resource function has to tackle as far as the employees are concerned. It is noted that the process of performance management begins at the point when an individual joins an organization to the point when they leave. As such, the improvement or advancement of an employee’s career is considered important because it has a direct effect on the performance of the organization. Employee career needs will be identified through the performance appraisal and evaluation process. Notably, employees who will experience performance setbacks will be recommended for training. Apparently, the training will be in the form of short courses which may be self-sponsored or partly sponsored by the organization. Therefore, continuous upgrading is necessary to improve the quality of employees since the organization is competent to the level of its employees.

Addressing the company objectives

In today’s workplace, objectives are essential for both the management and the workers because they agree on the period when to start and end. Notably, setting goals boosts the employees’ commitment that helps in achieving specific appraisal goals. Despite the fact that most human resource professionals understand the relevance of ideal management, in this case, all managers were not sure of what do; hence, ignoring the significance of the set objectives. Managers and employees need to quail so that they avoid management and performance risks that are as a result of not having clear goals. Often, the targets should be agreed upon between workers and managers and the time duration they will last. The purpose of having clear objectives is to guide and promote practical pieces that can improve the performance review of the organization.

Carrying-out general reviews

The organization should carry-out reviews on performance, development, and progress of the company so as to improve any cases of underdevelopment. Reviewing organization’s performance is important because it enhances company progress and boosts employee delivery. In fact, these reviews should be done after every three months with the aim of assessing the employee’s challenges and achievements. On the other hand, the system is not favoring the review of the performance, making it hard for the company to improve on the areas of weaknesses. Reviewing the organization’s goals helps in identifying challenges, developing the worker’s ability and ensuring that every activity is done according to the stipulated time. Therefore, the system should adjust and embrace review as well as assessment modes which will help them to achieve the organizational objectives.

Training both workers and the employers

Training courses are paramount for every organization concerning any activity because they improve the effectiveness of the labor force. Training a worker does not only attract good benefits but also imparts them with enough skills concerning the productivity and their delivery. According to the system, the individuals lack enough knowledge concerning the performance appraisal; hence, causing a decline in company productivity. They should know the importance and reasons for performance appraisal and when it should be carried out. Such training requires the human resource professionals to impart skills to the workers and equipping them with right procedures concerning the system. In conclusion, all managers and employees need to go under training concerning the performance appraisal activity since ignorance hinders the accomplishment of company objectives.

Positioning Specific Responsibilities

Appraisal criteria involve the assessment an employee’s element and quality of performance as well as their core duties as regards to the job description. By identifying specific responsibilities of the position helps in assessing the employee steadily and determines how they perform their duties. For instance, if an employee’s duties are emerging recurrent marketing plans, the manager can supervise and quickly conclude whether the worker has tracked through the procedure as expected on a monthly basis. For this, managers need to evaluate the worker using the checklist and also other expected duties and responsibilities of the person as per the contract. The manager must give the employee a chance to explain his failures in case the appraisal does not meet the responsibilities and duties as expected.

Goal Achievement

The management of the company must have challenging and clear objectives in each assessment period, and they should collaborate with the supervisor’s expectation. Having goal achievement portion of the organization will evaluate and assess the employee’s capabilities in meeting the company goals. Moreover, managers have the rights to use the collected information to evaluate and determine whether to give the worker more challenging goals or leave them with the usual ones. Managers and supervisors have project portions that help them in identifying and recognizing above and their routine duties. Notably, most employees are in charge of projects that are not within their job description. Ultimately, goal achievement is a relevant tool that can help the organization change its system and boost production.

Ensuring Achievements and Accomplishments

At present, quality production is mandatory, and managers should emphasize employee achievements and accomplishments. For example, the employee could have failed to fulfill some goals or even meeting the rest of the responsibilities on time because of his other duties outside work such as studies. Such achievements and accomplishments eliminate negative results in the workplace. Performances such as graduations and certifications may require an increase in the pay because they are obtained in an evaluation period, and they hold skills that are necessary for the day to day running of the business. The system is capable if the employees also attain other capabilities or even skills. Therefore, it is essential to let the workers achieve more other things outside work because they remain relevant in the organization’s development.

Re-Launching a Performance Appraisal

Developing a communication plan

Most appraisal processes can be re-launched on how the members communicate the aim of the system in the business. In fact, every employee in the company should be aware of the necessary information before the launch of the program. They should know how they will benefit, how the criteria are developed, the period it will last, the impact it has on the company, the influence of the appraisal of the employee benefits, the training program, and the implementation. Communicating all this information is an important strategy for both the bosses and the workers. A communication plan emphasizes clarity on understanding how the performance appraisal will work and knowing their roles to ensure its success. Therefore, developing a communication plan is vital in re-addressing the performance appraisal in the business.

Developing a practical tracking mechanism

In all companies, supervisors and juniors should work together for purposes of tracking an employee’s work or production. Necessarily, the company will need a consistent and just mechanism that will ensure and enhance the results of the appraisal performance of the employee. Practical arrangements involve the procedures that track the period, it will be observed, training managers, assuring confidentiality, monitoring employee skills, tracking deadlines, and quality improvement. Tracking mechanism will ensure quality production, employee skills, and employee availability. The strategy will help in re-launching the performance appraisal because there is assured maximum supervision of workers and quality delivery is guaranteed. Ultimately, a practical tracking mechanism is essential in providing quality performance appraisal since monitoring of employees is guaranteed in all organizational departments.

Supporting senior management

It is vital to help the senior management because sometimes appraisals are hard for both the employees and the workers. The development process has to ensure that the top management is giving the initiative to provide an active organization. Also, the administration can explain the specific approach necessary for tailoring the company’s progress and culture that will drive the business to high-performing level. Supporting can help the re-launch of the appraisal because the senior management ensures supervision of the juniors, advising and sharing knowledge on some issues, and applying better skills in production. Thus, it is crucial to support the top management of the organization because of safety, employee relationship, quality delivery and improved performance of the company.

Conclusion

Performance appraisal is one of the essential aspects of any organization and remains a significant instrument in production. It is vital for every team to have goals and objectives and they should involve every employee of the business. Conducting the appraisal will improve productivity and also increase the employee morale; hence, quality assurance. Furthermore, performance appraisal is a particular method managers use to approach their workers on their duty evaluation. The program helps the employees to improve their skills and even guides them to accomplish the tasks on time. On the other hand, performance appraisal also helps the organization to avoid risks, produce quality and models the workers in desired traits. Thus, employees should be thankful for the program because it nurtures their career. Therefore, organizations need to ensure that they achieve better performing standards which help in maintaining a competitive market.