Performance Management System For Star Industries

Need for an appropriate PMS and goals of PMS

The main objectives for implementing an integrated PMS are to identify improvement areas, assist employees in career growth, provide critical feedback and identify requirements for performance improvement. A PMS is implemented with the aim of developing a high performance organisational culture where individual employees and teams upgrade their skills for improving the business practices on a regular basis. Integrated PMS provides goal clarity for the employees so that they can perform to their full potential. PMS will help to outline the expected organisational behaviors, job-related competencies and accountabilities. It ensures that each organisational sub-system is aligned with the overall business goals. An organisation cannot grow without identifying the performance barriers that make the employees less competent.

The goal of PMS is to have a transparent performance appraisal mechanism. Monitoring employee performance becomes streamlined with PMS. Providing constructive feedback to employees helps to increase its efficiency and boost their morale. Performance feedback helps in improving the performance of employees and teams. It aims to improve the contribution made by each employee towards organisational growth. Effective human resource management strategies can help Star Industries in achieving a competitive advantage. An appropriate PMS (Performance Management System) can help to improve the productivity of employees. It fosters growth and development of employees at all levels. Without the presence of an effective PMS, it is difficult to review and evaluate the performance of employees. An appropriate PMS will help to understand the level of employee’s competence and commitment. PMS helps to align the individual goals of an employee and team goals with the overall organisational goals. With the help of effective PMS, each department starts functioning according to the long-term and short-term organisational goals.  It also helps to improve understanding about the organisational goals and corporate strategies.

The PMS should treat the employees in an equitable manner according to the Human Rights legislation. The organisation should fair decisions regarding promotions, changes in salary package, disciplinary action and dismissal on the basis of PMS. Anti-discriminatory laws should be followed by the organisation. PMS should take into consideration the Anti-Discrimination Act, 1998. The PMS framework should be in accordance with the guidelines issued by the local government. The Fair Work Act (2009) provides guidelines regarding prevention of discrimination at work, flexible working environment, and minimum entitlement. Workplace Health & Safety (WHS) should be a priority pertaining to suppliers, contractors, employees and customers. The organisation should take into consideration the Work Health & Safety Act, 2012. Policies regarding privacy should be clearly communicated to the employees. It is important to follow the Privacy Act, 1993 for governing the storage and disclosure of information. Equal Employment Opportunity Act, 1972 should be taken into consideration in order to prohibit discrimination on the basis of gender, nationality, race and color. Fair Work Act of 2009 should govern the relationship between the employee and employer. This act protects the employees against termination of services. Unfair dismissal laws should be followed if an employee wants to challenge unfair dismissal from job.   

Legislative Requirements To Be Taken Into Account

The PMS process includes performance planning, performance monitoring, performance evaluation and performance correction. The performance plan including job activities, targets, goal setting, performance standards and training requirements should be documented in a proper manner. Performance can be monitored on a weekly or monthly basis. Performance evaluation can be done through a 2-way feedback system. Documentation also includes organisational mission, vision, goals and values. Responsibilities associated with organisational position should be documented.  The HR department should maintain a copy of performance appraisal for future reference. An appraisal form should be used for giving performance ratings. This will ensure proper documentation of performance management activities. The feedback given by the immediate supervisor pertaining to a formal performance review should also be documented. Any change in organisational position or salary structure should have a written record. Performance documentation can be used by managers for analysing the strengths and weaknesses of employees. A record should be maintained regarding the trainings attended by the employee. The targets assigned to the employee on the monthly basis should be documented along with the output delivered. The quality of performance output should be taken into consideration along with target versus achievement ratio. The action plans developed for performance improvement should also be documented. Signs of consistent improvement indicate that the employee is capable of handling additional responsibilities. Consistent unsatisfactory performance indicates that the employee should be given a verbal/ written warning.Thus, performance documentation helps in identifying the best and the worst employees. Documentation of performance helps to justify the decision regarding termination of services. During lay-offs, performance documentation can serve as a basis for firing the non-performing employees.

Integrated PMS should support the strategic organisational goals and overall business plans. The objectives that support the implementation of PMS include talent management, performance management and retention of talented employees.  (Meng, 2014).

Star Industries implements a set of effective PMS policies related to performance review, performance counselling, performance improvement and resolution of internal conflicts (Mayo, 2014). The relevant policies include: recruitment policy, induction policy, remuneration management policy, performance management policy, termination policy etc. These performance management policies help in making several administrative decisions related to employee movement, hiring, and training.

It is the responsibility of the top-most leaders to deliver results and achieve business objectives. These objectives trickle down to the senior management and middle management. The top-most management meets the business objectives through the support of HR department. Developing and implementing an appropriate PMS is an important aspect of human resource management strategies. It is the responsibility of the HR department to create an organisational culture that helps employees to improve their skill-set and excel in their field. PMS helps the HR department in talent management (Herranz, 2010). HR department is responsible for creating an environment of openness and mutual cooperation. Thus, an appropriate PMS will result in effective communication of individual/ team expectations and the improved relationship among employees (Herranz, 2010). A robust PMS will help the HR managers in taking decisions related to promotions, transfers, salary hikes, rewards and termination of services. PMS is linked with the training management system and compensation management system. The overall business performance can be improved by creating a pool of competent employees and constantly grooming their skills. An organisation can achieve its business objectives and become a market leader through effective utilization of human resources by means of an appropriate PMS (Herranz, 2010).

Processes And Documentation Of PMS Along With Its Support Towards Organisational Goals

The PMS should be implemented in a uniform manner- it should include every employee. A PMS should be designed after consulting the upper management and the staff representatives. Consultation should be done through meetings. It is the responsibility of the team leader to consult his team members. Training sessions play an important role in communicating with the employees The organisational and functional goals should be clearly communicated to every employee. A two-way communication is required for the effective implementation of PMS. All the important changes in the organisational policies and procedures should be communicated to the employees. The managers should consult their team members before making important business decisions (Schwinger and Stiensmeier-Pelster, 2011). Employees should be encouraged to share innovative ideas for improving business processes. Feedback should be given by the supervisors on a regular basis while considering all the KPI’s (Key Performance Indicators). The managers should provide support and coaching to weak performers (Bromberg, 2009). Motivation the employees is an effective way of improving their performance. This will increase job satisfaction and eventually improve performance. Proper communication can help the supervisor in identifying factors that hinder an employee’s performance (Bromberg, 2009). If the employee fails to improve his performance within the given time period, he should be given several warnings before terminating his services. In my opinion, regular reviews can help in proper implementation of PMS. A healthy communication is required between the employees and their supervisors for maintaining clarity about performance indicators and responsibilities. Along with the duties, employees should also have complete information about their rights.

A coach focuses on improving the performance in a specific area whereas a mentor focuses on improving the competencies of an individual. The main objective of a coach is to enhance task-related performance or teamwork. The main objective of a mentor is to enhance learning throughout the job period. Thus, coaches are task oriented and mentors are relationship oriented. In Australia, mentoring programs are offered for improving career performance. Coaches and mentors facilitate communication related to performance improvement. Coaches, mentors and immediate supervisors have the most important role to play in the implementation of PMS(Kumar, 2012).. The skill-set required by coaches and mentors includes: communication skills, ability to give feedback, analytical skills, ability to make observations, ability of motivate etc. Effective communication skills are a pre-requisite for the mentors and coaches. A coach should be able to communicate clearly the job expectations. It is the responsibility of the coach to have discussions with employees regarding their performance and target-versus-achievement ratio(Kumar, 2012). If the performance of certain team members is unsatisfactory, the supervisor/ coach should have a face-to-face interaction with them to analyze the cause of poor performance. It is the responsibility of the coach to provide constructive feedback that helps the employees to improve their skills. The coach should identify key areas where training is required. For example, an employee may require training related to customer service. A performance improvement plan should be developed with realistic targets. The performance related problems should be handled by the mentor in a confidential manner(Kumar, 2012). A mentor should be personally involved in the employee’s long-term development. An employee can take career-related advice form his mentor. Their guidance is valuable for career development. Mentors should motivate their subordinates to perform to their best of capabilities.

Effective implementation of PMS requires proper training for employees (Rohaizat Baharun, 2012). Training programs and refresher courses should be designed for proving learning opportunities for employees. Job-related training should be provided for enhancing the skill-set required for a specific organisational position. Suitable criteria should be used for providing job specific training- identification of gaps in required skills, work experience, and current performance level. Proper training will help to increase team coherence, employee commitment and reduce staff turnover (Kuvaas, Buch and Dysvik, 2014). It is the manager’s responsibility to discuss work related issues and provide performance related feedback. But the manager may avoid interacting with his team members due to lack of knowledge, confidence and communication skills. Thus, supervisors/ managers should be given training regarding proper delegation of tasks and communication skills (Kuvaas, Buch and Dysvik, 2014). They should be trained to set realistic goals for their team and have a comprehensive understanding of business processes. Managers should be given adequate training regarding the appraisal process (Rohaizat Baharun, 2012). They should be trained to avoid workplace discrimination and bias. The managers should be trained to handle under-performers. They should be given proper training about counseling policies and techniques. Every employee should be given training about the legislative consideration. They should be made aware about the different laws that are applicable to their workplace. Employees should be given adequate training about the policies, procedures and organisational systems. They should be trained to give and accept constructive

Training requirements for managers	Training requirements for staff members
Job-related training	Job-related training
Understanding about day-to-day operations and technical system operations. They require training about the operation of PMS. This includes the criteria taken into consideration for PMS and its implementation.	Understanding about day-to-day operations and technical system operations. They require training about the operation of PMS. This includes the criteria taken into consideration for PMS and its implementation.
Proper delegation of tasks and communication skills	Escalation of issues
Appraisal process and giving performance feedback	Receiving feedback from supervisors
To avoid workplace discrimination and bias	Developing an action plan
Counseling policies and techniques	Developing a performance improvement plan
Legislative consideration	Legislative consideration
Ethical compliances	Ethical compliances
Issues and conflicts that arise at workplace	Issues and conflicts that arise at workplace
Policies, procedures and organisational systems	Policies, procedures and organisational systems
Taking disciplinary actions	Policies and processes for maintaining discipline

It is important the monitor the performance of employees on a regular basis for making the PMS successful. The manager should define parameters for monitoring the day-to-day performance- team dynamics, target-versus-achievement ratio, and level of involvement in business activities. The performance objectives and KPI’s should be clearly communicated (Kuvaas, Buch and Dysvik, 2014). Barriers should be identified that hinder in the achievement of performance objectives. Any growth or de-growth in performance should be communicated by means of constructive feedback. Monitoring the efficiency of PMS should be an ongoing process. The mechanism can be formal or informal. The efficiency of PMS can be monitored during performance reviews and team meetings. During performance reviews, both the employee and his immediate supervisor should express their views regarding the efficiency of PMS. The feedback provided by different stakeholders helps to monitor the efficiency of PMS.  

Performance evaluation is a cyclic process. Once the goals of PMS are set, the outcomes are evaluated by seeking the feedback of stakeholders. Then the goals of PMS are reviewed and tracking of progress is done. After this the outcomes of the PMS are analyzed against the goals. Feedback of stakeholders helps to modify the PMS (Akhauri, 2016). Thus, it is important to gather feedback from internal employees. Performance appraisal can result in improved productivity if it is implemented in a proper manner. Self-assessment and feedback are important aspects of performance appraisal. The achievements/ results should be compared with the performance plan (Akhauri, 2016). Appraisal meetings can help to understand the gaps between actual performance and expected performance. The performance documentation done throughout the year should be reviewed for effective assessment. A copy of assessment form should be provided to the employee. Rating scales should be used in performance assessment. The rating given by the immediate supervisor makes the system reliable. Reward and recognition system should be aligned with the performance appraisal (Akhauri, 2016). The use of appraisal forms makes the PMS more consistent, fair and less time-consuming. The employee perception regarding the fairness of Performance Management dictates their willingness and commitment to meeting the set targets. Thus, it is important to analyse the attitude of employees towards the existing PMS. In case the employees disagree with their performance rating, there should be a proper mechanism for addressing the issue for making the PMS more effective.

Process of Implementation including consultation and communication mechanisms

General policy on performance management 

Policy statement

The performance of employees should be reviewed by the immediate supervisor on a monthly basis. After reviewing the performance of team members, the manager will declare “performer of the month”. This will motivate the employees. After compiling the performance record, a reward and recognition event should be organized on an annual basis.

General procedures

The manager should clearly communicate the performance requirements by defining the KPI’s.

A target should be allocated for each KPI for a time period of 1 month. The managers should assist their subordinates in developing a performance plan.

Target versus achievement ratio should be calculated at the end of each month. The top performer should be given the tile of “performer of the month”.

The monthly performance of each employee should be recorded in a database. The top performers should be recognized at an annual event. He should be given financial or non-financial rewards.

Policy statement

If any employee violates the code of conduct or indulges in unethical practices, a counselling session should take place between the employee and immediate supervisor. Action should be taken depending on the severity of the offence. Very serious offence should lead to termination.

General procedures for counselling and discipline

Discipline is an important aspect of organisational culture. An employee may violate the dress code, indulge in workplace harassment, use offensive language, leak important information, indulge in bribery etc. Proper communication helps in dealing with such sensitive issues.

The manager should have a private discussion with the employee. This counselling session will help to identify the cause of the problem. The employee should be given a fair chance to explain the situation. While counselling the employee, the manager should discuss the impact of his behaviour. All the important facts should be documented along with the most appropriate course of action.A formal disciplinary action should be taken after the discussion. Depending on the severity of situation or offence, the employee should be given a notice period for improving his behaviour. If the behaviour of the employee does not improve, he may be terminated after completing all the formalities.

Procedures for dealing with grievances

If an employee has any workplace related grievance, he should immediately contact his immediate supervisor unless the employee has a conflict with the manager.

It is the responsibility of the manager to take an appropriate action. The time taken to take a suitable action may vary from 5 to 7 working days. If the issue still remains unresolved, the employee should approach the HR manager.

References

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Bromberg, D. (2009). Performance Measurement. Public Performance & Management Review, 33(2), pp.214-221.

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Kumar, N. (2012). Advantage of on-Line Performance Management System. Global Journal For Research Analysis, 3(5), pp.73-74.

Kuvaas, B., Buch, R. and Dysvik, A. (2014). Performance Management: Perceiving Goals as Invariable and Implications for Perceived Job Autonomy and Work Performance. Human Resource Management, 55(3), pp.401-412.

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Mayo, A. (2014). Align the workforce to strategic objectives. Strategic HR Review, 13(2).

Meng, X. (2014). The Communication Management Research in the Process of ERP Implementation. Advanced Materials Research, 1044-1045, pp.1803-1806.

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Schwinger, M. and Stiensmeier-Pelster, J. (2011). Performance-approach and performance-avoidance classroom goals and the adoption of personal achievement goals. British Journal of Educational Psychology, 81(4), pp.680-699.

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Welsh, D. and Ordonez, L. (2013). “The Dark Side of Overprescribed Goals: Consecutive Performance Goals, Depletion & Unethical Behavior”. Academy of Management Proceedings, 2013(1), pp.10497-10497.

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