Discuss about the Management Evaluates the Performance.
Performance management is a system where the management evaluates the performance of individuals, teams, groups or the entire department by measuring their contributions towards the achievement of organisational goals and objectives. Performance management has been regarded as one of the most useful tools provided to the modern day business world by the concept of human resource management. It allows business organisations to set up organisational goals and objectives, communicate the performance expectations to the employees, review the performances of various components and then take appropriate actions according to the assessment made on the basis of performance shown by them (Acas.org.uk, 2016).
The modern day business world is tough and only the fittest can survive in this environment of global competition. In such a scenario, business organisations are largely dependent on their human resources, which can help them in achieving market competencies. Therefore, it is essential that the management is effective enough so that it can maximise the performance of the employees by motivating them by hook or crook. Performance management systems come to the rescue of the companies and provide them with an approach to maximise the performance of the employees by focusing the attention of the whole organisation towards performance management (U.S. Office of Personnel Management, 2016).
While designing a performance management system, it is very important that the system is efficient and is accurate in measuring what the management actually wants to measure. Many a times it has been observed that the management ends up designing a dysfunctional performance management system which does more harm to a company that the potential benefits of a carefully and well-designed performance management system. To increase the accuracy and efficiency of a performance management system, it is important that the resources are properly allocated and the work is allocated to the right people and in total accordance with the operational plans.
Allocation of work and resources within the organisation, while starting up a performance management system, actually describes the expectations of the company from various individuals, groups or departments. The expectations that a management communicates to its employees forms the basis of the performance that they depict in the future. Therefore, it is very important that the management communicates the right performance expectations by assigning the right roles and duties to the employees. To achieve this, the management should always consult the senior level executives and front line managers. Senior level executives are the people who have charted out the operational plans for the company and they have a better idea of what work has to be done by whom so that the strategical objectives can be fulfilled. Once the management is aware about the role of an individual, a group or a department in the strategy, it should then consult the front line managers as they have a better idea of how they can be motivated to work in the right or the required direction. Consulting the senior level executives and the front line managers would ensure that the right work and the right resources are allocated to the right people in the organisation. The management should also be well prepared to deal with any risks that might be encountered with the allocation of work or resources. To deal with such risks, the management should regularly assess the performances of the employees and should find out areas where the performance is totally lacking. The management should be ready with professional staff or higher level executives who would then intervene to check out the problems in performances and then also try to eliminate them.
The management can further set up performance standards according to the industrial average of by calculating average performance metrics from past performance data. The management should ensure that the performance standards that it sets up are realistic and are achievable. If the performance standards are not achievable or are unrealistic, the performance management system might demotivate the employees, who would ultimately lose their morale.
One of the most crucial elements in a performance management system is the assessment of performance. Performance assessment is a process that has to be carried out throughout the year so that accurate and reliable results are obtained. Assessing the performance also becomes important because a number of rewards or incentives are tied up with performance management system which require transparency and non-biasness in the final step of the system i.e. performance appraisal.
There are a number of ways in which a company can measure or assess the performance of its employees. Some of the common methods are Balanced Scorecards, Key performance indicators, ratings, forces rankings, forces distribution, etc. but one of the most accurate methods is the 360 degree feedback method (Managementstudyguide.com, 2016). In a 360 degree feedback method, the management obtains performance information of employees from various sources in an organisation. The process is known as 360 feedback method because in this method all the peers, seniors and juniors of an employee are required to submit an anonymous review about the performance of an employee to a senior level manager. The feedback taken from multiple sources ensures that the performance feedbacks are accurate and are not given due to influence of personal relations while the anonymity of the process increases the chances of accurate and reliable feedback. The process is also highly recommended by many senior level managers as it provides a great deal of knowledge about the strengths and weaknesses of the employee whose performance is being measured (Custominsight.com, 2016).
Another efficient technique of measuring and evaluating performance of employees is by assigning some important metrics and identifying key performance indicators. Key performance indicators can help the management in measuring performance on the basis of their strategic and organisational goals and make the system of performance management more effective.
The management does not only have to implement a performance management system and measure the performances of each employee. Rather, the management has to assess the performance of the employees and provide a feedback either to a manager or directly to the employees once the managers have been able to compile all the performance data of the employees. Performance feedback is a process where a manager and an employee exchange information about expected performances and exhibited performances (Smallbusiness.chron.com, 2016).
One of the best ways to provide a feedback on employee performance has been taken up by Philips India. It has developed a combined system for performance as well as for potential appraisal. The diagram given below shows a matrix that is used by the company in its performance and potential appraisal:
The company regularly assesses the performances of its employees and at the end of the year, provides a feedback to the employees by arranging them in the above matrix on the basis of their performance (YourArticleLibrary.com: The Next Generation Library, 2014). Let us now discuss the matrix in detail:
Using such an effective system, a management can easily link performance and potential of employees to derive better results and provide them a better feedback. The feedback provided in this way is more accurate and linking performance with the potential of employees makes the information more reliable and valid.
Following up on the performance levels of employees is one of the most important tasks in a performance management system. The implementation of a performance management system in the organisation increases the focus of the organisation on performances. Following up implies that the management continues to keep a track on the performance of the employees even after they have been provided with a feedback about their performance levels in the past. Following up on the performance of employees ensure that the difference in performances exhibited before and after performance review is carefully noted and is taken up in the next performance review session.
Following up on the performance of employees helps a company in correcting them when they are moving in a wrong direction. The management can arrange for counselling sessions or other types of interventions to warn them about their dropping performances and the ultimate consequences while it can reward those employees who exhibit an improvement in their performance levels (Harvard Business Review, 2014). The process of following up is basically carried out more carefully for under performers as they are on the risk of being separated in the near future. Dealing with underperformers is not an easy task and requires a lot of care. First of all, the company should try to converse with the underperformers and talk to them about their low performance levels. If the employees have shown good performance in the past but are not being able to perform due to some issues, these employees are worth saving. The next step to deal with the underperformers is coaching. It helps them in attaining skills and competencies that can help them in increasing their performance. If there is no improvement in the performance levels of the employees whatsoever, the last and the final step is to conclude that the individual is not right for the job. These employees should be encouraged to look for new jobs that can suit their skills and competencies. They should be separated from the organisation in a much planned manner so that they do not feel that they were kicked out of the organisation unethically (Harvard Business Review, 2008).
Once a management has successfully implemented a performance management system in the organisation, the next step is to evaluate the system implemented so that the organisation can get a better knowledge about the good and the bad of the system and can consequently work to improve it.
Some of the key points that must be checked while evaluating a performance management system are discussed below:
By ensuring some of the above given key points, a management can gain information about what went wrong in its performance management system, allocation of work and resources, setting up of performance expectations and in the implementation phase of the performance management system. The collected information can help the management in making future changes to the performance management system and make it more effective by eliminating the problems.
The selection process of a company defines how it selects and recruits potential applicants for filling up of vacant positions in the organisation while training is defined as a session where the employees learn new skills and gain technical competencies so that they can compete in the market, achieve higher growth in their career path and contribute more towards the success of their organisations (Business Jargons, 2015).
ABC Company is one of the best companies in the country that runs retail stores offering groceries, furniture, consumer electronics, etc. The company has over 150 stores in the country and has a workforce of 10,340 employees. The company was found in 1990 and has achieved great success in its lifetime and is now competing multinational retailing brands in the country. The company has a very effective and efficient human resource department which is highly skilled and knows what to do to maximise the output of its human resources. For the selection process i.e. recruitment of new employees, the human resource department uses both external and internal recruitment methods. The department uses internal recruitment methods when there are vacant positions in the organisation while it uses external recruitment methods to recruit freshers into the organisation. The selection process of the company is a tough one where it makes the applicants go through a series of psychological and personality tests to find the right fit for the right jobs. Once the company is done with the recruitment process, it provides a brief training to the new employees before they can join their jobs. The training period is meant to provide them a brief view of what their roles and responsibilities would be once they join the company. The employees are provided an increment after every year while they are promoted to higher jobs after every two years. During this period, the company arranges a number of on the job training sessions for them so that they can acquire new skills and competencies.
The system of selection has worked very well for the organisation as it has enabled the management to find the best suitable candidates for the vacancies that develop in the organisation. By making them go through various personality and psychological tests, the human resource department is able to intercept the future performance of the candidate in the company. Thus, the management is able to recruit a talented pool of employees whenever there are vacancies. One major area that needs improvement in the selection process of the company is that it only uses internal recruitment process when higher level jobs are vacant. The company should also start using external recruitment sources even for higher level jobs because it has been observed a number of times that people with incomplete knowledge or lesser potential are promoted to higher jobs just because the company would not go for external recruitment. If the company starts external recruitment for all job profiles, the employees would become more competitive and would show higher performance so that they receive the promotions instead of higher posts being offered to external sources.
Further, the training programs of the company are also very effective. It uses on the job training programs, such as coaching, mentoring, role-play, in-basket games, etc. to train its employees and to make them acquire new skills. One of the drawbacks of the training system of the company is that it never sends its employees away from their jobs to undergo training sessions. Off the job training sessions have been considered to be equally important as are on the job training session (BusinessDictionary.com, 2016). Off the job training sessions provide more exposure to the employees and help them in gaining knowledge about what new trends are entering the industry that they are working in. Working with different training providers and in different set ups would provide additional benefits to the employees if they are given the opportunity to go for off the job training and development programs. In the past few reviews and feedback sessions, some of the employees have already said that the workforce was more interested in attending off the job training sessions rather than attending on the job training sessions all the time. Therefore, it is quite evident that the company needs to start offering off-the job training programs to its employees, which would be more cost effective and would provide better learning abilities to the employees (Training, 2016).
Conclusion
Managing the performance of people is an art and should be carefully done. If a management is able to get a performance management system in place and running, it can actually boost up the overall performance of the company but at the same time, a dysfunctional or a carelessly planned performance management system can cause a company more harm than the benefits that an efficient performance management system can have. Therefore, by keeping the performance management systems simple and transparent, business organisations can actually manage the performance of their employees.
References
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