Describe about the Performance Management at Heinz Company Australia?
The report aims at developing skills to apply HRM strategies within a contemporary organisational framework. The company being taken to examine the concepts of performance management is Heinz Australia. The company was found to fire one of their sales managers, Moretti on grounds of performance management. However, this was found unfair by Fair Work Australia. The report takes into consideration various aspects of performance management. By definition, performance management refers to the process by which managers and employees work in a team, plan, and assess the employee’s work objectives and his /her overall contribution towards the success of an organisation (Olsen, 2010). Besides just being a reviewing process, performance management is the continuous process of setting objectives, monitoring the performance of the employees, providing training to employees for their weaker sections and helping them grow themselves professionally (Steve, 2009). For instance, there are numerous software applications and templates available for the organisation to effectively manage the performance of their employees. For example, Taleo Perform is one of the software applications available for effective performance management. Taleo Perform gets integrated with Microsoft Outlook and Taleo’s recruiting software. With this, managers and employees can complete online surveys on performance management which can be assessed by managers to offer rewards and promotion to employees who have shown exceptional performance. This report is basically a critical review of the employee performance management strategies of Heinz Company Australia. Towards the end, the report also provides recommendations to Heinz Company Australia for future.
The foremost aspect which can be observed from the case study is that Heinz insisted on an individual performance management plan for the manager was a low score in his annual review (Nielsen, 2013). But this score was not a rating for individual performance which can be attributed solely to Moretti, rather it was companywide rating which implies that it applies equally to all the employees in a uniform way and hence, if this was the only reason then all the employees would have been stress upon individual performance management plan. At the outset, this approach was faulty which discriminated against Moretti and strictly violates the policies of corporate performance management and unethical. Strategic Performance Management is employed for different purposes and serves the interest of the employee and the company simultaneously (Swiss, 2005). For the company, it is aimed at synchronizing the objectives of the company with the employee’s career growth.
On the other hand, it is significant for the employee as he or she can focus on the organizational goals by working towards the collective good along with improving his own career prospects within the organization (US Office, 2009). The general techniques to be adopted for employee performance evaluation are to be weighed against the facts of the case; in light to the meeting with retail sales manager and the communication exchange which took place between Heinz and Moretti between the month of July and August also indicates towards faulty implementation of employee performance evaluation plan due to various reasons. When the meeting took place with the retail manager sales, Moretti was asked either to leave or he would be done away with by being performance managed out.
In case this was not true, Heinz should have come up with a claim disputing this fact but ironically, it did not happen which made it an undisputed fact. Further, the employee made several requests so that the company let him the performance concerns but this was denied until & unless he signed an individual performance management plan. In employee feedback strategies, this is termed as undue influence because Heinz was at a better position and hence, observed implied control on Moretti due to which it exercised carelessness and implicitly stressed upon him to agree to their demand which was individual performance management plan (Olsen, 2010). The apprehension of Moretti was pretty genuine in this case that this might be used as a tactic to oust him from the company. This is to be seen in comparison to settled principles of strategic performance management. Strategic performance management is a tool for evaluating the performance of the employee with respect to how he has delivered for meeting the organizational goals and has fared in career development. It comprises of reviews of employees within the company which are based on peer reviews, progress of the project and other criteria (Rausch, 2003).
Here, the efforts have been made by the retail manager sales which specified that there is no longer a job for Moretti, a company like Heinz cannot shun its responsibility as it reflects poor job security prospects on the part of the company and also reflects faulty Human Resources techniques. It is very crucial for the employees that an optimal level of job security is provided so that the employees can be assured of being a part of the organization and it also works as a motivational factor for them subsequently indicating proper implementation of Human Resources strategies (Coknis, 2009). According to Patrick Proctor, it is very important to heed to the needs of the employees as it is the best way to make sure that the company is listening to the employees needs after all, they are the ones who are at the helm of the affairs and make the company run the business. If the employee would be unsure of his job prospects and is afraid that in the name of individual performance management plans, he can be made a scapegoat of the situation, then it would block all the paths to approach the higher management and any honest opinion would be lost in oblivion which is highly detrimental to the company itself. If one goes by the Strategic performance management concepts by Cranfield University school of management, the knowledge to create strategic alignment across your organization through the design, implementation and management of goals, measures and targets is an important part of it (Routledge, 2009). This means that this knowledge was not imparted which disturbed the alignment and this divagate the employees from the vision of the company which will further carve up the path of individual growth and organizational goals and create conflict of interest among the employees. The appraisal also known as performance review or career development discussion is pivotal to the projects for evaluating and making decisions on the basis of the performance of the employee which is documented in detail and then performance is evaluated. As mentioned in the case study, there were other alternatives which could have been adopted Heinz. Some of these alternatives can be found in the improvements techniques of applications of Performance appraisal (Mawhinney, 2001). According to Muchinsky, training, peer reviews, development sessions and regular feedbacks to employees are the alternatives which can be adopted if the performance is not going on as per the company standards. In the present study, it was a genuine apprehension expressed by Moretti that he was suspicious about the intentions of the company.
Moreover, there has been no past record where any manager was subjected to such an individual performance management plan although employees other than the manager were subjected to such but whenever it happened; it culminated in the result that it was because of their poor performance. So all in all, even if his performance was not up to the mark about which there is not substantial record, it was not justified that he would be subjected to such an approach which not only lead to reversal of decision of the company by his reinstatement but also put an adverse impact on other managers about faulty strategic performance management and erroneous implementation of employee appraisal (Chen, 2007).
Employee performance management is an indicator of the employee’s contribution towards success of the company (Ghemawat, 2002). A company which is successful tends to have better employee performance management than others which are not doing well in competitive scenario. By definition, employee performance management refers to the process of establishing a shared workforce understanding regarding what is to be achieved at an organisation level. In broader sense, employee performance management aligns the organisational objectives with measures, competencies and development plans as agreed by employee (Hill, 2012). In case of Heinz, the approach adopted by the company towards employee performance management was considered totally unreliable. This is due to the fact that the company dismissed a sales manager on grounds on inefficient performance. But the real scenario was somewhat different. The organisation took a company-wide rating instead of individual rating for employee performance and in this rating, Moretti scored really low. Since the ratings were not individual instead company-wide, Heinz Company Australia could not dismiss him on grounds of performance concerns. Moreover, the company tried threatening Moretti to fire him if he didn’t sign the individual performance management plan. Although Moretti was repeatedly told about his performance concerns but no details were provided on his repeated insistence.
The employee performance management has a critical impact on the strategic human resource management of an organisation (Lamb, 2004). Strategic human resource management is defined as the form of management of activities of employees in an organisation. A company where employees have high performance, it will have efficient strategic human resource management. Alternatively, a company with low employee performance will have inefficient strategic human resource management (Porter, 1996). However, strategic human resource management hugely depends upon the employee-employer relationship. In case of Heinz Company Australia, the relationship of the company with its employees doesn’t seem cordial and healthy. Due to unhealthy relations, the company took an action against its sales manager on false grounds of performance concerns. As per experts in HRM, it is believed that HRM strategies have direct impact on the employee performance through employee motivation. By definition, employee motivation refers to the process of motivating and encouraging employees contribute hugely towards success of organisation. Employee motivation provides employee outcomes, boosts the performance of employees and ultimately impacts the productivity and performance of employees (Kvint, 2009). Strategic HRM is seen as an indicator of the intentions of organisation towards its employees. For instance, if an organisation conducts regular training for its employees then it can result in better employee performance. Hence, greater training can be effectively linked to productivity of employees.
In case of Heinz Company Australia, the company lacked motivation in its HRM strategies. Due to this, the Deputy President of FWA didn’t accept the repeated arguments of Heinz Company Australia. He figured out that flawed employee performance management is one of the primary reasons for the failure of the company in developing their employees’ performance. In another example, employee performance management have strong relationship with organisational performance and behaviour. Employees who are regularly awarded with bonuses, promotion and rewards based upon their performance tends to be highly motivated (Crosby, 2009). It keeps them satisfied and encouraged towards contributing their best towards their job role. Also, the effective recruiting and selection practices along with better compensation terms tend to have positive impact on the performance of the employees. But in case of Heinz Company Australia, no employee had ever been subjected to performance management plans. Moreover, managers were never subjected to performance management plans but one employee was subjected to the poor performance management plans of the company, he was dismissed without a second thought.
Hence, it can be concluded from above discussion that employee performance management usually have positive relationships with strategic HRM and organisational behaviour.
In the scenario, Heinz Company Australia had to suffer due to its poor employee performance management. An effective employee performance management requires continuous process of setting objectives, monitoring the performance of the employees, providing training to employees for their weaker sections and helping them grow themselves professionally (Chaffee, 1985). However, in case of Heinz Company Australia, no such employee performance management plans were followed for employees and managers. Ultimately, this impacted the strategic HRM and organisational behaviour of the company greatly. The company dismissed their sales manager, Monetti on grounds of performance concerns but didn’t provide any details to him in spite of his repeated insistence. The case when taken up by Deputy President of FWA was viewed as the fault of the company rather than employee.
In order to improve the ways using which employee performance management of Heinz Company Australia can be improved are:
Diagnosing poor performance: In order to enhance the employee performance management, one of the critical ways is to diagnose the poor performance by conducting frequent employee performance audits. These audits will help to monitor the weak points of employees individually. In general, before taking any step to fix the poor performance of the employees, it is crucial to determine its cause. Those causes can only be determined with regular performance audits (Chandler, 2002). Most common causes of poor performance of employees in organisations such as Heinz Company Australia are lack of ability, lack of motivation, lack of training sessions. But in case, managers observe that an employee is not making efforts to do his job then they are likely to put pressure on him. The increased pressure can worsen the problem in spite of motivating employee to his job efficiently. The low ability of employees in Heinz Company Australia can be due to numerous reasons, such as, over-difficult tasks, low aptitude, skills and knowledge of employee, high effort but low performance and lack of improvement over time. Many times, candidates with low ability are matched with wrong jobs. This is one of the factors leading to poor performance. Secondly, some employees might have been promoted to positions that are demanding. Thirdly, employees might have not been able to get the support from management which they must get. These are most probable causes of poor performance (Mintzberg, 1987). These can be effectively fixed by recruiting right candidate for position, assessing the performance level of the employee and then promoting him and providing appropriate support to him by management (Mintzberg, 1996).
Boost the ability of employees: In organisations such as Heinz Company Australia, managers can enhance the ability of the employees. In general, there are five ways to overcome employee performance problems related to lack of ability. The ways include Resupply, Retrain, Refit, Reassign and Release.
Resupply: This includes assessing the resources available to employees. Many times, employees don’t have adequate resources to complete their job. For example, employees don’t have internet access to be updated with latest trends. It can result in poor performance (Drucker, 1954). Hence, managers need to resupply the resources so that employee performance can be enhanced.
Retrain: This includes training the employees about their work. Untrained employees are not productive and can’t be innovative in their work. Hence, second way is to retrain the employees and providing them significant training to manage their work effectively.
Refit: If resupply and retrain don’t work to maximise the employee performance, then the other option is to reconsider the person for the job role. Many time, a candidate is not fit the job and hence it results in poor performance.
Reassign: Fourth way to maximise employee performance is to reassign the tasks to different employees who might be much capable of doing work than the employee who has been assigned previously.
Release: In case all four options don’t work to maximise the employee performance at Heinz Company Australia, the last option is to release the employee. In other words, it means to let the employee go and hire another at his position. This should be seen as final step and must not be used in situations where employee performance can be managed by training, supplying the resources (Henderson, 1981).
Enhance motivation level of employee: In order to improve the employee performance management at organisations such as Heinz Company Australia, one of the ways is to improve the motivation level of employees. This can be done by setting performance goals for individual employees, provision to provide assistance to employees and provision to provide feedback to employees regularly (Kearney, 2002).
These are some of the ways that can be adopted by Heinz Company Australia to improve their employee performance management.
Conclusion
To conclude, it can be said that employee performance management has a huge impact on HRM strategies and organisational behaviour. A company with efficient employee performance management can be successful in long run due to successful HRM strategies and cooperative organisational behaviour.
References
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