Performance Magt Chpt 1

8/3/2019 Performance Magt Chpt 1

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HRM544 PERFORMANCEMANAGEMENT

CHAPTER ONE: PERFORMANCEMANAGEMENT AND REWARD

SYSTEMS IN CONTEXT

RROOM: AC 347 (FACULTY

ACCTCY)

OFFICE NO.: 05-3742387 /019-4328546

E-mail:

[email protected]


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OBJECTIVES OF THE COURSE

OBJECTIVES OF THE COURSE

After completing the course the students wil l be able to :Explain the concept of PMDistinguish PM from PAExplain the many advantages and make a business case for implementing a well-designed PMSRecognize the multiple negative consequences that can arise from the poordesign and implementation of a PMSUnderstand the concept of a reward system and its relationship to a PMSDistinguish among the various types of employee rewards, includingcompensation, benefits, and relational returnsDescribe the multiple purposes of a PMS including strategic, administrative,informational, developmental, organizational maintenance and documentationalpurposesDescribe and explain the key features of an ideal PMSCreate a presentation providing persuasive arguments in support of the reasonsthat an organization should implement a PMS, including the purposes that PMSserve and the dangers of a poorly implemented systemNote the relationship and links between a PMS and other HR functions, includingrecruitment and selection, training and development, workforce planning andcompensation


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WHAT IS PERFORMANCE ?

PERFORMANCE = BEHAVIORS + RESULTS

- Williams (2002)


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DEFINITION:

The process of identifying, evaluating and

developing the work performance of employeesin the organization, so that organizational goalsand objectives are more effectively achieved,while at the same time benefiting employees interms of recognition, receiving feedback,

catering for work needs and offering careerguidance.

- Lansbury, R.D. (1988). (In Rajkumar, K.(2002). Performance management system for

Malaysian organization.)


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Oxford English Dictionary- the accomplishment,execution, carrying out, working out of anything

ordered or undertaken-Refers to outputs/outcomes (accomplishment)but also states that performance is about doingthe work as well as being about the results

achieved-Also be regarded as behavior- the way in whichorganizations, teams and individuals get workdone

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MANAGEMENT AND

REWARD SYSTEMS IN

CONTEXT PM- continuous process of identifying, measuring &developing the performance of individuals and teams andaligning performance with the strategic goals of theorganization

Two main components: Continuous process

Alignment with strategic goals

THE DIFFERENCE BETWEEN PM AND PA- PA- systematic description of an employees strengths and

weaknesses

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BACAL, R (1999)


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THE PERFORMANCE MANAGEMENT

CONTRIBUTIONMotivation to perform is increased

Self-esteem is increased

The definitions of job and criteria are clarified

Self-insight and development are enhanced

Administrative actions are more fair and appropriateOrganizational goals are made clear

Employees become more competent

There is better & more timely differentiation between good and poor

performers Supervisors views of performance are communicated more clearly

Organizational change is facilitated

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BOX 1 1 WHAT CEO SAY


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BOX 1.1- WHAT CEOs SAYABOUT THE CONTRIBUTION

OF PMS PM systems are a key tool that organizations use to

translate business strategy into business results

PMS influence financial performance, productivity,

product/service quality, customer satisfaction, andemployee satisfaction

79% of CEOs say that PMS implemented in theirorganizations drives the cultural strategies that

maximize human assets

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DISADVANTAGES/DANGERS OF

POORLY IMPLEMENTED PMS Increased turnover

Use of misleading information

Lowered self-esteem

Wasted time and money

Damaged relationships

Decreased motivation to perform

Employee burnout and job dissatisfaction

Varying and unfair standards and ratings

Emerging biases

BOX 1 2 WHAT HAPPENS


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BOX 1.2- WHAT HAPPENSWHEN PM IS IMPLEMENTED

POORLY? A female employee was promoted several times andsucceeded in the construction industry until shestarted working under the supervision of a newmanager

She stated that once she was promoted andreported to the new manager, the boss ignored herand did not give her the same support or opportunityfor training that her male colleagues received

She won her sex-discrimination lawsuit, a juryawarded her $1.2 million in emotional distress andeconomic damages


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DEFINITION OF REWARDSYSTEMS

Tangible returns-includes cash compensation(base pay, cola and merit pay, short-termincentives and long-term incentives) andbenefits (income protection, work-life focus,

allowances etc) Intangible returns (relational returns)-include

recognition and status, employment security,challenging work, and learning opportunity


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1.Base pay

2.COLA adjustments and contingent pay3.Short-term incentives

4.Long-term incentives

5.Income protection6.Work/life focus

7.Allowances

8.Relational returns

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AIMS AND ROLE OF PMS

1.1 strategic purpose

to help top management achieve strategic businessobjectives

by linking individual goals with organizational goals servesas a way to communicate what are the most crucialbusiness strategic initiatives

1.2 administrative purpose

To furnish valid and useful information for makingadministrative decisions about employees

1.3 informational purpose

Serve as a communication device (inform employees abouthow they are doing and provide information on specificareas that need improvement


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AIMS AND ROLE OF PMS 1.4 developmental purpose

Feedback is an important component of well-implemented PMS

To coach employees and improve performance on an ongoing basis

Employees receive information about themselves that can help themindividualize their career paths

1.5 organizational maintenance purpose

Provide information to be used in workforce planning (a set ofsystems that allows organization to anticipate and respond to needswithin and outside organization, to determine priorities etc)

Assess future training needs, evaluating performance achievementsat organizational level

1.6 documentational purpose

Allow organizations to collect useful information that can be used forseveral documentation purpose

- Performance data can be used to validate newly proposedselection instruments

- PMS allow for the documentation of important administrativedecisions


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CHARACTERISTICS OF AN IDEAL PM

SYSTEM Strategic congruence

Congruence with the unit and organizations strategy

Thoroughness

All employees should be evaluated

All major job should be evaluated

Evaluation should include performance across the entire review period

Practicality

Include good, easy-to-use systems

Give benefits (improved performance and job satisfaction)

Meaningfulness

Standards and evaluation conducted for each job function consideredimportant


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CHARACTERISTICS OF AN IDEAL PM

SYSTEM Specificity

Provide detailed and concrete guidance to employees about what is expectedof them and how they can meet these expectations

Identification of effective and ineffective performance

Should provide information that allows for the identification of effective andineffective performance

Reliability

Measuring performance that are consistent and free of error

Validity

Acceptability and fairness

Inclusiveness

Openness


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Box 1.5- GOOD PMIMPLEMENTATION PAYS OFFStudy conducted revealedthat the 1,200 workers statedthat they could improve theirproductivity by an average of26% if they were not heldback by a lack of direction,support, training andequipment

Successfully implementing

a PMS can give workers thedirection and support thatthey need to improve theirproductivity


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INTEGRATION WITH OTHER HR AND

DEVELOPMENT ACTIVITIES

PM is the key factor used in determining whetheran organization can manage its humanresources and talent effectively

PM provide information on who should betrained and in what areas, which employeesshould be rewarded

PM also provides information on the type ofemployees that should be hired

Documents

Performance Magt Chpt 1