The Use of Human Resource Service Centers - Term Paper Example

The Use of HR Service Centers: Performance Management Table of Contents Executive Summary 3 Introduction 4 Background History of Performance Management 4 Purpose of Performance Management 6 History of Performance Management 6 Topic Detail / Current State 7 Problems / Concerns 9 9 Evaluation/ Recommendation 11 Summary / Conclusion 12 References 13 Bibliography 15 Executive Summary In today’s world, the concept of performance management is very important as this helps to improve the labor management relation as well as increase the productivity of the employees. The first section of the project deals with the introduction of the HRM. Human resource management is one of the most important functions of the organization. It deals with matters relating to staffing, skill management, performance management, payroll, training and development, recruitment and selection etc. A short history as well as the background of the topic i.e. performance management is described in detail. Frederick Taylor and his followers introduced the first formal monitoring system prior to World War I. In the year 1950, it was recognized that appraisal is a useful tool for motivation as well as development of the employees. In the year 1970, the term performance management was introduced by Beer and Ruh. The later section of the project deals with the literature review of performance appraisal where previously conducted research has been taken into consideration in order generate to ideas and to make the base stronger. The last two section deals with the problems as well as recommendations for performance appraisal. Introduction Human resource management is one of the most important functions for any organization. It deals with matters relating to staffing, skill management, performance management, payroll, training and development, recruitment and selection among others. HRM is a management driven activity, focused on the values of the business, commitment oriented, with diverse strategic scope which gives strong stress on incorporation. This paper deals with the discipline of performance management which is one of the most important aspects of HRM (Armstrong, 2006). Background / History of Performance Management Performance management is one of the most important developments in the areas of human resource management. It is a tool which helps to measure the performance of the employees as well as improve their way of working so that the goals of the organization are achieved in an effective and efficient manner. It is very often found that whenever one thinks of performance in an organization, the first thing that comes to our mind is performance of the employees. Infact the performance management must deal with the products or services, programs, processes, departments, organization, teams and groups, etc. 360 degree feedback method is the modern appraisal method which includes feedback from everyone including self ratings, peer review and upward assessment. It helps in improving the communication between the two people. Although these type of appraisal is costly but it is one of the most comprehensive types of appraisal system. It helps in improving the employer and employee relationship and has a strong impact on the behavior and performance of the employees. Such a kind of appraisal is done by either giving the feedback directly to the employee so that he can discuss the matter with his managers or the feedback is provided to the managers so that he can discuss the matter with the incumbent in the meeting. Development and implementation of 360 degree appraisal involves quite a few steps. Firstly, it is important to define what this appraisal is expected to receive. Next, it is to be decided who the recipient of the feedback would be. Then, it has to be decided who would be receiving the feedback. A thorough study has to be conducted to determine who will be giving the feedback and the process of doing so. Then, it has to be decided on which areas the appraisee would require the feedback. It is important to decide on the methods of collecting data, whether it will be in a questionnaire format or if some other techniques will be applied. Decision has to taken as to whether the software will be built in house or some other packages will be used. It is important to pilot the process with the managers in departments so that the benefits are known and the fear is removed. Analysis has to be done for the outcome of the pilot scheme. Finally, the full program needs to be planned and implemented through communication, training and necessary support from the human resource department. For effective performance, the complete system must be continuously monitored and evaluated (Toolpack Consulting, n.d.) Purpose of Performance Management Performance management helps in achieving better results by means of understanding and through proper management of the performances. It is the method of managing and developing people in such a way that it will increase the probability that the goals can be achieved in short as well as long term. Performance management results help to establish the remuneration criteria. This reward helps to distinguish between the better performers and the weak performers. The strong performers are awarded by means of promotion, bonuses or increase in their pay whereas the weak performers are provided counseling and requisite training. History of Performance Management It is not known as to when the method of reviewing the performance of the employees was started. In order to measure the performance of the officials, emperors used imperial rater. After a century, formal rating system was established by Ignatius Loyola who was the member of the Jesuit society. Frederick Taylor and his followers introduced the first formal monitoring system before World War I. Formal management procedures that were used for the appraisal of work performance started only after the World War II. Initially, performance management started as a method of justifying the income. It was used to decide if the salaries and wages that were being paid to the workers were being justified. If the performance of the employee was less than the expected level then there was a deduction in the salary of the employee where as if it was found up to the mark then the salary was hiked. Later, it was found that it was not only the pay rates but other factors like self esteem and morale as well that had an impact on the performance of the employees. In the year 1950, it was recognized that appraisal is a useful tool for motivation as well as development of the employees. It was from that time onwards, performance appraisal started. The term performance management was started in the decade of 1970s by Beer and Ruh (Armstrong & Baron, 2005). Topic Detail / Current State A study conducted by International Labor Organization suggests that performance appraisal is the system of reviewing the performance of the employees in an organization or in any factory. It is a system of formal review where evaluation is done with respect to the contribution of the employees towards the organization. The formal performance appraisal is conducted in a written form through preparation of the questionnaire and is conducted in a periodic basis for all the people of the organizations. These are conducted by the supervisors or the line managers who evaluate the performance of each staff and provide feedback to them accordingly. ILO suggest that performance appraisal must be based on the job description of the employee and a comparison has to be made between the previous appraisal as well as recent appraisal to check how much improvement the employee has made. They also suggest that the records of the performance appraisal of the employees must be kept properly for further references. Appraisals must not be based on any discriminatory biases. The employee can pinpoint their areas of weakness so that further improvement can be done and they can contribute to the achievements of the goals of the organization (International Labor Organisation, n.d.). According to them, performance appraisal has positive impacts on the overall system. Workers are provided guidance about their roles and responsibilities. It improves the communication system between the employer and the employee within the organization. It is a useful tool to judge the action of the workers in the organization (International Labor Organisation, n.d.). The study conducted shows that there are certain problems with the performance appraisal methods. The first problem identified by them is that there is poor superior - subordinate relationship and the contact between them is limited which ultimately leads to unfair feedback and judgment. It has also been found that the management views the performance appraisal method as wastage of paper work as well as time. It has also been found that the appraisal process is not objective as there is involvement of human judgment. It is suggested that the workers should receive feedback from both the mangers as well as the subordinates which can be in a questionnaire form or any simple form that would describe the processes as well as usefulness and objectiveness (International Labor Organisation, n.d.). Another study conducted by Ben Dattner on performance appraisal suggests that it comprises of few steps. The first step is to set the goals for any appraisal system like predicting the performance of the future based on the past performance, succession planning, compensation, etc. The next step is to develop the criteria. According to him, the criterion should align with the goals of the organization and has to be under the control of the employee and must be understandable as well as acceptable by the participants. These criteria are generally based on the qualitative or quantitative factors, efforts and results. The next important step is to create matrix where the score is based on the source of development on the past act. There are different types of rating scales such as graphics rating scale, ranking, forced distribution and bars. The selection of the reviewed as well as the reviewer is done. The next important step is to consider the time whether the appraisal will be done annually, semi annually or quarterly. Then, the logistics has to be gathered which means to gather the datas. It can be done through written surveys, internet or through any other means. Providing feedback is the most important step in performance appraisal. It can include anonymous rating and comment, attributed rating and comments etc. Finally follow up is most important which can include training, coaching and mentoring among other techniques (Dattner, n.d.). Problems / Concerns There are many problems that are associated with the performance appraisal methods and performance management as a whole. The first problem is that promotion is given to the employees after judging his or her performances which means increment in the responsibilities of the employee. This may ultimately put pressure on the superior. One of the most de-motivating factors in the performance appraisal method is the low spread of wages and salaries between the lowest ranking as well as the highest ranking staffs. At times it is also seen that the rater becomes biased with respect to the rating and these affects in the increment of the salary. It has also been found that appraise is rated differently than what he does on his job. Based on this rating, he is dismissed if his rating or rank is low. It is the duty of the management to communicate with the employees about their performances as well as regarding the reward system. The practice of not communicating such information to the employees during evaluation of the performances is an inconsistent method of motivation. It has also been found that there are compelling legal or administrative reasons for retaining the performance appraisal system even though it has no use or benefits to the rater, ratee as well as to the organization. Another problem with the system is the problem of leniency and strictness. The rater may be very lenient in rating some of the employee and may assign him high ranks whereas he may be very strict in rating someone and may rate him low in comparison to others. At times it is also found that there is problem with the central tendency i.e. many of the raters appraise majority of the employees at the middle point and ultimately they avoid rating them at higher or lower level. There is also problem with the personal prejudices. For instance, if the rater doesn’t like any employee then he might rate that employee at the lower end which ultimately ruins the career of the employee. It has also been found that the there is problem with the recent performance effect. The rater just remembers the recent ratings of the employees and follows the result of last time. Poor labor management relation is again another big problem with the performance management system which leads to poor and unfair judgment from the side of rater. Some raters also take performance as wastage of time as well as paper work. If the management thinks so, it will be difficult to access the performance of the employee and it will also de-motivate the workers to work. 360 degree appraisal is very costly method and is quite complex to implement which is another biggest predicament with the performance appraisal techniques (HR Management, n.d.). Evaluation/ Recommendation Businesses will be benefited to a large extent with the use of appraisal techniques. This will help people to improve their communication as well as to identify their roles and responsibilities in an organization. A good performance appraisal system helps to increase the productivity and will help the employees to realize that they work for a common goal. 360 degree appraisal will help the employees to communicate their problems which will ultimately reduce their tensions and raise the overall performance of the employees. It is very important for the employees to involve themselves in this system. This will help them to build up their own performance appraisal system which will ultimately benefit both the employer as well as the employee. Proper training must be imparted to the appraiser as well as the appraisee. The appraiser must not be biased on evaluating the appraisee as these will reduce the morale of the employees. The appraisal form has to be as simple as possible. Complex forms make the entire process of appraisal complex. The number of pages of the form must be reduced as these will reduce the cost of operation. It is also important to integrate the annual as well as the quarterly forms in a single form and one page must deal with the issues relating to the problem of the staffs, types of training required by them. The superior – subordinate relation must be improved so that appraise is able to discuss his problems to the superior and there is fair judgment from the side of rater. The whole appraisal system must be too simple so that the cost of appraising is reduced. Such an environment must be created where there is open communication between the employers and the employees. This will reduce the fear among the ratees and will encourage as well as motivate the members to work for common goal. There must be proper software’s for such appraisals which gives fair judgments. The employees must not be dismissed from the job just because of low rank or points. His problems must be welcomed and proper solution to the problems must be given. Summary / Conclusion Performance management is the most useful tool in the modern time that helps to access the performance of the employees in the organization. It helps to improve the employer and the employee relationship which in turn helps to increase the productivity of the employees. It helps an individual to manage his performance himself. It is a system where continuous feedback is provided. 360 degree is the most suitable means of appraisal as it a method of appraising the worker from the entire angle. It can be from the superiors, peers or outsiders. It is the modern method of appraisal system. Even though performance management has many pitfalls but still it has been an important tool for motivating the employees as well as overall development of the employees and the organization. References Armstrong, M. & Baron, A. (2005). Managing Performance: Performance Management in Action. CIPD Publishing. Tool Pack Consulting. (No Date). 360 Degree Review. Alternative Performance Review. Retrieved Online on July 31, 2010 from http://www.toolpack.com/performance.html International Labor Organization, (No date). Employees Performance Appraisal. Challenges and Pitfalls. Retrieved Online on July 31, 2010 from http://www.ilofip.org/GPGs/Performance%20Appraisal.pdf Dattner, B. (No Date). Performance Appraisal. Setting Goals. Retrieved Online on July 31, 2010 from http://www.dattnerconsulting.com/presentations/performanceappraisal.pdf Armstrong, M. (2006). A Handbook of Human Resource Management Practice. Kogan Page Publishers. HR Management, (No Date). Problems in Performance Appraisal. Problems in Central Tendency. Retrieved Online on July 31, 2010 from http://www.humanresources.hrvinet.com/problems-in-performance-appraisal/ Bibliography Armstrong, M. (2000). Performance Management: Key Strategies and Practical Guidelines. Kogan Page Publishers. ArticlesBase. (No Date). Purpose of Performance Appraisal-how and Why it is an Important and Effective for Any Orgaization. Performance Appraisal. Retrieved Online on July 31, 2010 from http://www.articlesbase.com/management-articles/purpose-of-performance-appraisalhow-and-why-it-is-an-important-and-effective-for-any-orgaization-567006.html Archer North. (No Date). Performance Management. Home. Retrieved Online on July 31, 2010 from http://www.performance-appraisal.com/intro.htm Langan-Fox, J. & Et. Al. (2007). Research Companion to the Dysfunctional Workplace: Management Challenges and Symptoms. Edward Elgar Publishing. Read More