How to Develop a Policy

Identify the Need for a PolicyYou want to have the necessary policies and procedures to ensure a safe, organized, convivial, empowering, nondiscriminatory work place. Yet, you do not want to write a policy for every exception to accepted and expected behavior. Policy development is for the many employees not for the few exceptions. Consequently, you do not want to create policies for every contingency, thus allowing very little management latitude in addressing individual employee needs. Conversely, you want to have needed policies, so that employees never feel as if they reside in a free-for-all environment of favoritism and unfair treatment. These ten steps will take you from determining the need for a policy through distributing and integrating a policy.

Check Out These Guidelines to See if a Policy Is NeededFor each of the reasons provided about why a policy might be necessary, I have provided examples of the policies that might fall into that category of need for a policy. A policy is necessary:

if the actions of employees indicate confusion about the most appropriate way to behave (dress codes, email and Internet policies, cell phone use)

if guidance is needed about the most suitable way to handle various situations (standards of conduct, travel expenditures, purchase of company merchandise),

when needed to protect the company legally (consistent investigation of charges ofharassment, non-discriminatory hiring and promotion),

to keep the company in compliance with governmental policies and laws (FMLA, ADA, EEOC, minimum wage),

to establish consistent work standards, rules, and regulations (progressive discipline, safety rules, break rules, smoking rules), and

to provide consistent and fair treatment for employees (benefits eligibility, paid time off,tuition assistance, bereavement time, jury duty).

There may be other reasons, additionally, for why you may want to develop a policy. Remember, though, that one employee's poor behavior should not require a policy that will affect all other employees.

Articulate the Goal of the PolicyOnce you’ve determined that a policy is necessary, determine the goal you want to accomplish in writing the particular policy. When possible, you will want to tell employees why the policy is being implemented. You need enough details in the policy to make the company’s position clear, yet you can never hope to cover every potential situation addressed by the policy.Consequently, my goal with a policy is short and simple. I recognize this may not be possible with policies about areas such as the company's approach to the Family Medical and Leave Act, discrimination or complaint investigation, or the progressive discipline system. But, how much can you really say about driving while talking on a cell phone? So, use common sense as you determine the outcome you want from your policy.

Gather Information

This Human Resources website provides sample policies as do many other websites, albeit other companies frequently charge for their policies. Even websites that charge provide free samples so you can test their policies. In my experience, I never find a sample policy that is exactly right for my company circumstances. But, research online and find sample policies to provide a base for revising rather than writing your policy from scratch.You can also subscribe to a service that provides samples such as Personnel Policy Manual Service, a service used by a client company. External policy sources are also provided in my policy samples directory. Finally, the Society for Human Resources Management (SHRM) provides policy samples for members.In some cases, you may even want to talk with your employment law attorney. Law firms write generic policies for their clients that can also be customized. Especially when a new law passes or the Department of Labor issues new rules, your attorney is likely to develop an accompanying policy.

Develop and Write the PolicyWith goals and samples in hand, write the policy using simple words and concepts. Speak directly to the people who will be reading, enforcing, and living by the policy. After each paragraph, ask yourself "what if" questions to make certain the policy is covering the basics and the normal exceptions and questions. Do not obsess over this, however; as stated, no policy ever covers every possible contingency.

Review the PolicySelect several employees, or even a small pilot group, to read the policy and ask any questions they might have about the policy. This review provides feedback that employees will be able to understand and follow the policy. Rewrite the policy based on the feedback.

Obtain Management Support for the PolicyReview the policy with the managers who will have to lead and put into effect the policy. You will want to have their support and ownership of the policy. You will have started this process much earlier, even as early as when you identified the need for the policy, but management support as you implement the policy is crucial.

Obtain Legal Review of the PolicyIf the policy has legal implications, is litigious by its nature, has personal implications for employees (such as security procedures), you will want to have your attorney review the policy before you distribute the policy further. Make sure you communicate to your attorney that you do not want the policy rewritten in "legalese." You want the policy reviewed for legal implications and appropriate wording.

Implement the PolicyIn small groups, individually, or in a company meeting, depending generally on the controversial nature of the policy and the ease with which it will be understood, distribute and review the new policy. Give employees a chance to ask questions.The policy should always consist of the policy on a piece of paper with the employee sign off on a second sheet. Employees can sign off that they have received and understand the policy, yet retain a copy for their own files.This is a sample signoff statement to use:

I acknowledge receipt of and understanding of the (Your Company) Policy. The policy is effective (Date) until further notice._______________________________________________________Employee Signature_______________________________________________________Employee Name (Please Print)________________________________Date

Decide How You Will Communicate the Policy in the FutureInclude the policy in your employee handbook. You may also want the policy to become part of your New Employee Orientation. Some companies place policies in their Intranet or in a policy folder on the computer network's common drive. Determine whether you will want to distribute the policy by additional methods.

You will also want to archive and date former policies that this policy replaces. You may need them for legal or other reference in the future.

Interpret and Integrate the PolicyNo matter what you write in the policy, your later policy application and work practices will determine the real meaning of the policy. Think "consistent" and "fair" as you interpret the policy over time. When you find your practices differing from the written policy, it is time to review and rewrite the policy and the cycle starts again.

Strategic Managementhttp://s-h-r-m.blogspot.com/2010/07/formulating-and-implementing-hr.htmlThere is an ever-present risk that the concept of strategic HRM can become somewhat nebulous – nice to have but hard to realize. The danger of creating a rhetoric/reality gap is acute. Broad and often bland statements of strategic intent can be readily produced. What is much more difficult is to turn them into realistic plans, which are then implemented effectively. Strategic HRM is more about getting things done than thinking about them. It leads to the formulation of HR strategies, which first define what an organization intends to do in order to attain defined goals in overall human resource management policy and in particular areas of HR process and practice, and second set out how they will be implemented.

DEVELOPING HR STRATEGIES

An overall approach

The following six-step approach is proposed by Gratton (2000):

1. Build the guiding coalition – involve people from all parts of the business.2. Image the future – create a shared vision of areas of strategic importance.3. Understand current capabilities and identify the gap – establish ‘where the organization is now and the gap between aspirations for the future and the reality of the present’.4. Create a map of the system – ‘ensure that the parts can be built into a meaningful whole’.5. Model the dynamics of the system – ensure that the dynamic nature of the future is taken into account.6. Bridge into action – agree the broad themes for action and the specific issues related to those themes,

develop guiding principles, involve line managers and create cross-functional teams to identify goals and performance indicators.

1. ConductingPerformance Management Fatemeh Hashemi 2. How performance management is strategically important to firms Performance

management is a formal, structured process used to measure,evaluate, and influence employees’ job-related attitudes, behaviours, and performance results. Performance management serves many purposes in organizations: 1-Enhancing Motivation and Productivity: An employee’s motivation to perform well is determined by how responds to three key questions: • The expectancy question(‘If I make an effort, will I be able to perform as intended?’) • The instrumentality question(‘What consequences, if any, will follow from my decision to perform?’) • The valence question(‘How much do I value the consequences associated with the intended behavour?’)

3. How performance management is strategically important to firms2-Supporting Strategic GoalsDefining goals and their measures is an important part of the perfomance managementprocess.When goals have a direct and obvious link to strategic goals and to the firm’ssuccess factors, two benefits occur:• Employees better understand their organization’s strategic focus and how their jobs fitwith it.• The goals direct employee behaviours toward activites that are consistent andsupportive of the organization’s strategy.3-Strategic Planning, Alignment and ChangePerformance measures provide valuable information for use in strategic planning andorganizational change.• Detecting Problems :for example; declining sales performance may point to adeficiency in training.• Evaluating Change: Employee performance measures should be a key component ofa plan for evaluating the success of a change initiative.

4. How performance management fitswithin an integrated HRM system HR Activities Performance Management PracticesExternal Performance MeasurementEnvironmentLegalLabor marketNational Culture Feedback and Follow up Internal Environment Objectives of Performance Strategy Culture Measurement And Feedback Technology If no improvement make adjustments

5. The responsibilities of the HR Triad for performance management LINE MANAGERS HR PROFESSIONALS EMPLOYEESWork with 2+3 to develop Work with 1 providing job analysis Work with 1+2 to set performancevalid performance measures data expectationsUnderstanding of errors Train everyone Appraise the work of othersMeasure and keep records Coordination and feedback ParticipationFeedback to employees Train 1 for feedback Seek and accept feedbackFeedback own performance Train self-managing teams for Learn to give feedback feedbackDecision making Monitor managerial decisions Understand performance expectationDiagnose deficiencies Train self-managing teams for Learn to diagnose causes of deficiencies deficienciesWork with 3 to develop Ensure 1+3 to deal with deficiencies Work with 1 to developStrategies improvement strategiesProvide resources Provide personal assistance to 3. Develop goal setting and self- management skills

6. Several ways to measure performance• Performance criteria: are the dimensions against which the performanceof an incumbent, a team or a work unit is evaluated.organizations can use three types of criteria:Personal Traits focus on personal characteristics, such as loyalty, dependability,communication ability and leadershipBehavioral Criteria focus on how work is performed.Objective Results focus

on what was produced rather than how it was produced.• Weightning the criteria: Job analysis

7. The timing of the performance measurement and feedback The timing of performance measurement should reflect strategic considerations. But often the timing of performance measurement and feedback is driven by convenience and tradition.The three most common approaches: 1-Focal Point:Performance measurement for all employees occurs at approximately the same time. Advantage:Comparison-everyone-same time Disadvantage:Too much work –same time-artificial productivity 2-Anniversary Approach:distributes the task of reviewing performance and providing feedback over the year. Disadvantage:Individual-team performance,comparison. 3-Natural Time Span of the Job

8. The participants in performance measurement and feedback To compensate for the disadvantages of gathering data from any single source, most large organizations involve multiple participants when measuring performance and providing feedback. • Supervisors • Self-Appraisal • Peers • Subordinates • Customers • 360 – Degree Appraisals

9. Appraisal formatsInvolves evaluating performance based on the judgemets andopinions of subordinates, peers, supervisors, other managersand even the employees themselves.Norm-Referenced1.Straight Ranking2.Forced Distribution.Absolute Standards Formats1.Graphic Rating Scales2.Behaviourally Anchored Rating Scales3.Behavioural Observation ScalesResult-Based Formats.1.Direct Index Approach2.Management by Objectives

10. The rating process Common Performance Rating Errors Halo and Horn :sex,age,race Leniency: high rated Strictness: low rated Central Tendency: ‘play –it- safe’ average rating Primacy:Initial information to categorize Recency:Recent results Contrast Effects:Comparison of different levels. Improving Rater Accuracy Rating Scale Format: •A single job activity •Rate separately •Do not use term ‘average’ Provide Memory Aids Provide Rater Training Reward Accurate and Timely Appraisals Use Multiple Raters

11. Providing feedbackThe feedback makes employees aware of any problems and should adress theimportance of change when applicable. Many managers feel uncomfortableproviding feedback to employees.Different perspective,egos,defence,discussions...Timing:Immediate feedback is most useful.Continous,from several sources andas much info as reciever can use.Preparation:Before the actual interview decision has to be taken is it one way orinteractiveContent of the Discussion:The most useful feedback sessions focus onsolving problems and planning for the future.Problem solving involves diagnosingthe causes of performance.Diagnosis:The objective of diagnosis is to understand the factors that affect anemployee’s performance.Training in problem solving and in giving and receivingfeedback should be provided.Removing Roadblocks: Action plan: Supervisor should adress lack ofresources,feedback,Subordinate should adress behavorial changes,careerdevelopment activities...

12. Two current issues related to performance management• Automated Performance Management Technology can automate the process by tracking goals,scoring and approving appraisals and processing the data for use in determining compensation, training ,planning and recruiting.Customer satisfaction,managers ratings etc..the technology allows organizations to convert a great deal of data into usable information.Efficiency,time saving,accuracy.• Monitoring Through Technology

Handscanners-attendancy,GPS devices –location,softwares-emails,internet activities It concerns privacy.Must find a balance between benefits and privacy.How ? Communication and training.

Performance management (PM) includes activities which ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product of service, as well as many other areas.

PM is also known as a process by which organizations align their resources, systems and employees to strategic objectives and priorities.[1]

Performance management originated as a broad term coined by Dr. Aubrey Daniels in the late 1970s to describe a technology (i.e. science imbedded in applications methods) for managing both behavior and results, two critical elements of what is known as performance.[2] A formal definition of performance management, according to Daniels' is "a scientifically based, data-oriented management system. It consists of three primary elements-measurement, feedback and positive reinforcement." [3]

Contents

1 Application 2 Benefits 3 Organizational Development 4 Implementation

o 4.1 Long-cycle Performance Management o 4.2 Short-cycle Performance Management o 4.3 Micro Performance Management

5 See also 6 References 7 Further reading

Application

This is used most often in the workplace, can apply wherever people interact — schools, churches, community meetings, sports teams, health setting, governmental agencies,social events and even political settings - anywhere in the world people interact with their environments to produce desired effects. Armstrong and Baron (1998) defined it as a “strategic and integrated approach to increase the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”

It may be possible to get all employees to reconcile personal goals with organizational goals and increase productivity and profitability of an organization using this process.[4] It can be applied by organizations or a single department or section inside an organization, as well as an individual person. The performance process is appropriately named the self-propelled performance process (SPPP).[citation needed]

First, a commitment analysis must be done where a job mission statement is drawn up for each job. The job mission statement is a job definition in terms of purpose, customers, product and scope. The aim with this analysis is to determine the continuous key objectives and performance standards for each job position.

Following the commitment analysis is the work analysis of a particular job in terms of the reporting structure and job description. If a job description is not available, then a systems analysis can be done to draw up a job description. The aim with this analysis is to determine the continuous critical objectives and performance standards for each job.

Benefits

Managing employee or system performance and aligning their objectives facilitates the effective delivery of strategic and operational goals. Some proponents argue that there is a clear and immediate correlation between using performance management programs or software and improved business and organizational results.[citation needed] In the public sector, the effects of performance management systems have differed from positive to negative, suggesting that differences in the characteristics of performance management systems and the contexts into which they are implemented play an important role to the success or failure of performance management. [5][6]

For employee performance management, using integrated software, rather than a spreadsheet based recording system, may deliver a significant return on investment through a range of direct and indirect sales benefits, operational efficiency benefits and by unlocking the latent potential in every employees work day (i.e. the time they spend not actually doing their job). Benefits may include:

Direct financial gain,

Grow sales Reduce costs in the organization Stop project overruns Aligns the organization directly behind the CEO's goals Decreases the time it takes to create strategic or operational changes by communicating the

changes through a new set of goals

Motivated workforce

Optimizes incentive plans to specific goals for over achievement, not just business as usual Improves employee engagement because everyone understands how they are directly

contributing to the organizations high level goals Create transparency in achievement of goals High confidence in bonus payment process Professional development programs are better aligned directly to achieving business level goals

Improved management control

Flexible, responsive to management needs Displays data relationships Helps audit / comply with legislative requirement Simplifies communication of strategic goals scenario planning Provides well documented and communicated process documentation

Organizational Development

In organizational development (OD), performance can be thought of as Actual Results vs Desired Results. Any discrepancy, where Actual is less than Desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle:

1. Performance planning where goals and objectives are established2. Performance coaching where a manager intervenes to give feedback and adjust performance3. Performance appraisal where individual performance is formally documented and feedback

delivered

A performance problem is any gap between Desired Results and Actual Results. Performance improvement is any effort targeted at closing the gap between Actual Results and Desired Results.

Other organizational development definitions are slightly different. The U.S. Office of Personnel Management (OPM) indicates that Performance Management consists of a system or process whereby:

1. Work is planned and expectations are set2. Performance of work is monitored3. Staff ability to perform is developed and enhanced4. Performance is rated or measured and the ratings summarized5. Top performance is rewarded[7]

Implementation

Erica Olsen notes that "Many businesses, even those with well-made plans, fail to implement their strategy. Their problem lies in ineffectively managing their employees once their plan is in place. Sure, they've conducted surveys, collected data, gone on management retreats to decide on their organization's direction-- even purchased expensive software to manage their process-- but somewhere their plan fails." [8]

Performance management and performance appraisals have a significant overlap.[citation needed] In general, there are three type of performance management: long-cycle, short-cycle, and micro.[citation needed]

Long-cycle Performance Management

Long-cycle Performance Management is usually done on an annual, every 6 months, or quarterly basis.[citation needed] From implementations standpoint, this area is the one that has traditionally received the most attention.[citation needed] This is so for historical reasons, as most performance management techniques/styles predate use of computers.[citation needed]

Short-cycle Performance Management

Short-cycle Performance Management (which overlaps with principles of [Agile Software Development]) is usually done on a weekly, bi-weekly, or monthly basis.[citation needed] From the implementation standpoint, this sort of management is industry-specific.[citation needed]

Micro Performance Management

About the BankPrimary Objective and Function of the Bank

Due to increasing evidence of the negative effects of inflation in recent years, there has emerged a growing consensus throughout the world that a monetary policy geared towards the pursuit of Price Stability, in the longer term, is the Central Bank's most significant contribution to achieving maximum growth for a nation's economic prosperity. Furthermore, experience suggests one important rule: a Central Bank with too many things to do is likely to find itself doing none of them well. This is exactly what happened with the Bank of Tanzania, which did not succeed in achieving its multiple-policy objectives.This international consensus is also reflected in the Bank of Tanzania Act, 2006 and its predecessor Bank of Tanzania Act, 1995, in which, as compared to the Bank of Tanzania Act, 1965, there has been a move away from multiple-policy objectives to a single-policy objective, i.e., Price Stability. According to the Act "The primary objective of the Bank shall be to formulate, define and implement monetary policy, directed to the economic objective of maintaining domestic price stability, conducive to a balanced and sustainable growth of the national economy of Tanzania". In other words, it is the primary responsibility of the Bank to establish monetary conditions conducive to Price Stability over time. Empirical evidence throughout the world suggests that Inflation is mainly caused by excessive creation of money. Thus, in order to achieve Price Stability, Central Banks -by virtue of their ability to exert influence over the Money Supply process-have been given the task of regulating the quantity of money in circulation and of credit supplied to the economy, i.e., they have to conduct Monetary Policy. In this connection, the following is needed:

a. a steady and acceptable rate of increase in the Money Supply

b. a rate of increase in domestic bank credit expansion that will not place undue demand pressures on production resources and that must be consistent with the Money Supply objectives

c. realistic interest rates that must at least be above the level of the rate of inflationd. a level of foreign reserves sufficient to enable the Central Bank to intervene in the foreign

exchange market from time to time to smoothen out reversible short-term fluctuations, to meet import requirements, external obligations, and unexpected foreign exchange requirements in times of crisis

e. a relatively stable exchange rate for the national currencyf. the protection and development of sound and well-managed banking institutions, andg. the encouragement of well-functioning and effective financial markets, including an efficient

payments system.

Commensurate with the legal commitment of the Bank of Tanzania and realising the seriousness of the inflationary situation in the Country, the Bank is pooling all its efforts towards achieving Price Stability and has declared Inflation the Nation's Economic Enemy Number One.

1. The Importance of Price Stability

Price Stability implies that the Rate of Inflation, which is measured by the rate of increase of the National Consumer Price Index, has to be kept as low as possible, optimally within a longer-term average range of 0-5% (percentage change on the previous year). With a high rate of inflation, increases in wages and salaries cannot keep pace with the resulting erosion of purchasing power, and, hence, there will be decreases in real incomes for a large part of the population, which may result in corruption, an expansion of the informal sector, social friction, increased crime, and as a consequence of these factors, a decrease in economic efficiency. Furthermore, a high rate of inflation is an incentive for currency substitution and capital flight, it leads to an unplanned redistribution of income and wealth, mostly in favour of the rich, and, in general, it adversely affects decisions on consumption, saving, borrowing, and investment in productive capacity, by increasing uncertainty about future prices. Excessive inflation is also an impediment for achieving interest and exchange rate stability, which is very important for facilitating smooth economic development. Therefore, a combination of these factors could seriously impede the timely achievement of the Financial and Economic Restructuring Program. In this connection, it has to be stressed again that Price Stability is the decisive cornerstone of a successful economic policy geared towards sustainable medium- and longer-term economic growth. In other words, economic growth in the Country will be severely curtailed in the medium and longer term, if inflation continues to prevail at a high rate.

2. Prerequisites and Limits of an Effective Monetary Policy

To achieve this objective, the Bank formulates and implements Monetary Policy, by using instruments, such as Refinancing Policy, Minimum Reserve Policy, Open Market Policy, Foreign Exchange Interventions, and other instruments. The Ultimate Objective of Price Stability, however, can only be realised over time, if there are well-coordinated Monetary, Fiscal, and General Economic Policies, i.e., there has to be a concerted national effort. Monetary Policy, by itself, cannot achieve Price Stability, no matter how strict a Monetary Policy Stance the BOT is pursuing, it can only dampen inflation to some degree, depending on the inflationary pressures emanating from Fiscal and General Economic Policies. Furthermore, the attainment of the

Monetary Policy Objectives has to be facilitated by a continued application of market-oriented policies in the financial sector (the creation and maintenance of an efficient payments system is included here), the public sector, the industrial sector, the agricultural sector, and the external payments area.

Subsidiary Functions of the Bank of Tanzania

Apart from the primary function, the Bank of Tanzania has important subsidiary central banking functions.

1. The Bank of Issue

The Bank has the sole right to issue notes and coins in Tanzania for the purpose of directly influencing the amount of currency in circulation outside banks, thereby providing the economy with sufficient, but if possible, non-inflationary liquidity.

2. The Bankers' Bank

This function includes the acceptance of deposits to act as prudential reserves for these banks (i.e., the Minimum Reserves), the willingness to discount commercial and government paper, and the commitment to act as lender of last resort to these banks. It also involves the provision of central clearance facilities for interbank transactions.

3. The Governments' Bank

The Bank is the banker and the fiscal agent for the Governments, and may be the depository of the Governments. The Bank may make temporary advances to the Governments through its overdraft facility, subject to repayment within 180 days and through purchases (direct or rediscounting) of treasury bills issued by the Governments, which mature not later than 12 months from the date of issue. The total amount outstanding at any time of advances made in this manner shall not exceed one eighth of the average budgeted revenues (average of the actual collected revenues of the previous three fiscal years, excluding loans, grants, other forms of economic aid, and all borrowing, whether short-or long-term) of each Government.

4. The Advisor to the Governments

The Bank may advise the Governments on any matter relating to its functions, powers, and duties. The Bank may also be requested to advise the Governments on any matter related to its functions, powers, duties, the credit conditions in Tanzania, or any proposal, measures, and transactions relating thereto.

5. The Guardian of the Country's International Reserves

The Bank is the depository of the official external assets of Tanzania, including gold and foreign currency reserves. Guarding international reserves may imply the determination of buying and selling rates of gold and foreign exchange in foreign exchange markets and/or the buying and

selling of reserve assets for the purpose of sustaining the national currency's external value. It also includes reserve management, with a view to the prudential investment of the funds, with due regard to safety, liquidity, and profitability, and external debt management.

6. Supervision of Banks and Financial Institutions

In general, this activity involves ensuring that commercial banks and other financial institutions conduct their business on a sound prudential basis and according to the various laws and regulations in force. It includes the supervision of banking conduct and the licensing of financial institutions. According to the Banking and Financial Institutions Act of 1991, and the new BOT Act, the main responsibilities of the Bank of Tanzania are:

a. implementation of prudential controls concerning capital adequacy, liquidity, concentration of credit and risk diversification, asset classification and provisioning, and prohibited activities

b. licensing of banks and financial institutionsc. facilitation and monitoring of a Deposit Insurance Fund, the purpose of which is the protection

of small depositors, andd. modification and monitoring of the Minimum Reserve Requirements and foreign exchange

exposure.

7. Promotion of Financial Development

This refers to the establishment of an effective financial system, with the aid of which financial transactions necessary for the smooth functioning of the economy can be carried out with a minimum amount of cost and time involved. In this connection, the Bank has to be a facilitator of advanced clearing and transfer systems. It also implies that the necessary banking services, as, for example, deposit facilities and loan facilities, are made available. Included here is also the availability of certain specialised institutions, which could be represented, for example, by an industrial development bank and/or an agricultural development bank and micro-finance institutions, and the facilitation of a money market, a capital market, and a foreign exchange market.

The Current Institutional Framework of the Bank of Tanzania

Relations with the Governments It has been generally accepted by now that there is quite a valid case for Central Bank independence, since price stability is an important public good, like peace and civil rights, and politicians in a multi-party system, who have to work within the constraints of an electoral timetable, will always be tempted to engineer pre-electoral booms (vote-maximising behaviour), regardless of the longer-run inflationary consequences. Politicians tend to prefer monetary expansion to monetary contraction, since the following short-term trade-off exists between inflation and production and employment:

a. monetary expansion first results in a stimulation of production and increased employment, and only later there is an increase in the rate of inflation, and

b. monetary contraction first results in reduced production and less employment, and only after some time there is a reduction in the rate of inflation

Within the framework outlined above, there is also a tendency among politicians to avoid expenditure cuts and tax increases by borrowing from the Central Bank, which is the most inflationary method of financing government deficits. It is, therefore, very important to separate the powers of spending from those creating money. Experiences the world over in the past decades unambiguously suggest that countries, in which Central Banks enjoyed considerable autonomy in monetary policy, recorded low inflation, while the opposite was the case in countries where Central Banks were under government influence. However, it has also been generally recognised that the Central Bank has to be accountable. Accountability relates to the responsibility of the Central Bankers to explain to the Public (Government, Parliament, and the General Public) what they are doing and why, i.e., there should be a genuine two-way communication (close consultations) between the Public and the Central Bank. This also implies educating the public on economic principles, i.e., the harmful effects of inflation have to be explained, in order to maintain public support. Concerning day-to-day monetary policy operations, the Bank of Tanzania is autonomous. However, commensurate with the accountability postulate, regular consultations shall be held between the Governor and the Governments on monetary policy. Furthermore, twice a year, prior to the commencement of the new fiscal year, and not more than six months, thereafter, the Governor has to present to the Union Minister of Finance the Monetary Policy Statement, for submission to the National Assembly, giving an indication of monetary and economic developments at present and the recent past, and expected economic developments and the monetary policy stance during the next 12 months. In the case of irreconcilable differences between the Governor and the Union Minister of Finance, the Governor can be directed to formulate and implement Monetary Policy for a period not exceeding 12 months, as specified by the Minister. The directive shall be published in the Gazette. The Board of Directors, the Bank's top decision making body, consists of the Governor and the Deputy Governor, who are appointed by the President for a period of five years (they shall not hold office for more than two terms), one representative each for the Governments (Principal Secretaries to the respective Ministries of Finance), and six other Directors. The latter are appointed by the Union Minister of Finance for a term of three years; they shall not hold office for more than three terms. In order to keep Government borrowing from the Central Bank within reasonable limits, borrowing benchmarks have been established for the Governments on the basis of revenue collected. As indicated already, the Bank of Tanzania is the advisor to the Governments on matters relating to finance.

About the BankBank of Tanzania Website

Welcome to Bank of Tanzania official website. The purpose of this website is to provide the most useful information possible about the Bank of Tanzania as a Central Bank. Contents of this web offer general information and are not intended to serve as financial statements or other advice. While every precaution is taken to ensure the accuracy of information, the Bank of Tanzania shall not be held liable by any person, company, institute or organisation for inaccurate information or opinions contained herein.

Our Mission

The Bank of Tanzania Act ,2006 and our Primary Mission stipulates that  this organisation in its capacity as Tanzania's Central Bank is " ... to formulate and implement monetary policy, directed to the economic objective of maintaining price stability, conducive to a balanced and sustainable growth of the national economy of Tanzania"

Our Vision

To be a world-class model central bank focused on its core objectives with a highly qualified and motivated staff that has access to the state-of-the-art technology, a Bank that stands out significantly as the pillar of financial and macroeconomic stability necessary for the rapid growth of the economy of Tanzania under conditions of internal and external stability.

 

Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed. It ends when an employee leaves your organization.

Many writers and consultants are using the term “performance management” as a substitution for the traditional appraisal system. I encourage you to think of the term in this broader work system context. A performance management system includes the following actions.

Develop clear job descriptions.Select appropriate people with an appropriate selection process.Negotiate requirements and accomplishment-based performance standards, outcomes, and measures.Provide effective orientation, education, and training.Provide on-going coaching and feedback.Conduct quarterly performance development discussions.Design effective compensation and recognition systems that reward people for their contributions.Provide promotional/career development opportunities for staff.Assist with exit interviews to understand WHY valued employees leave the organization.More Performance Management Resources