Uses of Performance Appraisal, Key Elements of Performance Management - Admission/Application Essay Example

? Summary Summary of Chapter 8: Performance Management Performance management is one of the essential functions of human resource management. The objective of performance appraisal is to develop the overall efficiency and productivity by increasing the potential and the productivity of the individuals. A few of the factors that lead to effective performance appraisal system are validity, reliability, acceptable standards and goals, controlling of standards, putting input into system development, the frequencies of the feedback, rater training, ratee training, the inputs in the interview process, appraisal results and various sources (i.e. raters). Uses of Performance Appraisal Performance management has various uses such as rectifying the performance of the employees, adjusting employee compensation, taking decisions related to placements, recognizing training needs ascertaining development and career planning, identifying shortcomings in the staffing processes, finding out the informational inaccuracies, diagnosing the errors in job design, avoiding any kind of discriminations relating to caste, creed, gender and any kind of external challenges (Schwind, Das & Wager, 2007). Key Elements of Performance Management Performance appraisal is an on-going process and the steps include determining human performance, taking performance appraisal interview, obtaining employee feedback and subsequently reviewing employee records and taking HR decisions accordingly. The appraisal system includes performance measures and the related criteria (Schwind, Das & Wager, 2007). A few of the key features of performance appraisal system include ascertaining job-related dimensions in which the system make evaluation of critical behaviors that comprise job related success. The dimensions of performance standards and practical understandings are imperative to recognize the desired outcomes from each performed job role. Consequently, based on these evidences performance measures are performed with particular referenced to critical behaviors (Schwind, Das & Wager, 2007). Performance Measures There are four important aspects with regard to performance measures comprising direct, indirect, objective and subjective. In the direct approach, the rater usually views or observes the performance of the employees. In the indirect approach, the rater possesses merely certain substitutes in terms of performance constructs. The objective aspect of performance measures specifies that it is generally quantifiable and can also be assessed by others. The subjective aspect on the other hand illustrates that performance appraisal is not verifiable by others and may also include the personal opinions of a rater (Schwind, Das & Wager, 2007). Rater Biases Rater biases are of five different categories and comprise the halo effect, recency effect, personal prejudice, leniency and strictness bias, frequency of feedback and errors of central tendency (Schwind, Das & Wager, 2007). Past–Oriented: Non-comparative Aspects of Performance Appraisal The past oriented non- comparative aspects of performance appraisal are judged on six categories consisting of rating scale, critical incident, behaviorally anchored, tests and observations, ranking along with forced distributions. The ratings scale is the most extensively utilized method, and it is subjective as it depends on the opinions of the rater as well as at times responses may also be rendered numerical values. In the critical incident mode, the rater makes a record of statements of performance and explains the occurrences of certain ineffective or effective behaviors. The behaviorally anchored technique measures the performance-related groupings and observes precise job-related factors. The appraisal based on tests and observations is generally conducted through a test which may be of either pen and pencil based or a demonstration. The ranking technique ranks the employees based on the categories from best to worst. However, in this method an influence of the halo effect and the recency effect is apparent. Another technique i.e. forced distributions entails the development of certain categories along with assigning the employees to the specified categories (Schwind, Das & Wager, 2007). Future-Oriented Methods The future oriented methods are of three types including self-appraisals, management- by-objectives and assessment centre. These methods can be utilized along with different evaluation approaches for managers and employees (Schwind, Das & Wager, 2007). Recent Developments A few of the recent developments in this field of performance management include the development of 360 degree appraisal technique, performance appraisal software and the development of the balanced scorecard (Schwind, Das & Wager, 2007). Training Raters The training of the raters concentrates on augmenting their ability to make appropriate judgments through attention, recall, categorization and information integration (Schwind, Das & Wager, 2007). Evaluation Interviews The evaluation interview ought to be positive entailing dialogues related to performance improvement. The varied approaches such as tell-and-sell, tell-and-listen and problem-solving approach are followed (Schwind, Das & Wager, 2007). Summary of Chapter 9: Compensation Management Compensation signifies the monetary and the non-monetary rewards received by the employees in return for the work done by them. A few of the important aspects of compensation management include ensuring quality, rewarding behavior, retaining employees, acquiring personnel and legal compliance. The mode of compensation faces certain challenges which include wage and salary policies, productivity, union power, prevailing wage rates and the government constraints (Schwind, Das & Wager, 2007). Phases of Compensation Management There are four phases of compensation management such as job analysis, job evaluation, salary surveys and job pricing. In this regard, job analysis phase facilitates to study and recognize different jobs and related standards along with description. The job evaluation phase makes use of job grading, ranking and point system. Salary surveys phase establishes pay level for a particular job through surveys related to wage rates and evaluation of wage-trend line among others. In the job pricing mode, dissimilar pay levels are grouped into a precise manageable structure (Schwind, Das & Wager, 2007). Pay Equity The notion of pay equity includes equal pay for equal work. In a recent survey conducted, it was found that a wide gap existed between the income of both male and female. The reason for the wide gap was mainly due to the tendency of the women to work in lower paying occupations thus adhering to the career gap. However, it was found that 5 to 10% of the wide gap remains unexplained (Schwind, Das & Wager, 2007). Advantages and Disadvantages of Incentive Systems Incentive system establishes a clear link between performance and pay. A few of the benefits in this system include the aspects such as performance is reinforced regularly, reinforcement is made without delay and the wages are paid in proportion to the performances. However, it also suffers from certain disadvantages such as complexity in administration, resulting in inadequacies, resistance from the unions along with focusing efforts on merely one aspect (Schwind, Das & Wager, 2007). Individual vs. Team Based Incentives The individual incentives depend on piecework, commissions, production bonuses, maturity curves and executive incentives. On the other hand, the team based incentives depend upon the team results, production incentives, profit sharing and cost reduction plans (Schwind, Das & Wager, 2007). Pay Secrecy: Advantages and Disadvantages The benefits of pay secrecy include the fact that generally a majority of employees favor to have their pay to be kept secret, which can be attained through this method. It provides enhanced freedom to the managers along with covering up inequities in the internal pay structure. However, the disadvantages lies in a distrust arising in the system and the employees may consider that there is no interrelationship in between pay and performance (Schwind, Das & Wager, 2007). In recent times, compensation system has been changing significantly where variable based and performance driven gains are provided major considerations against the traditionally deemed vital facets including entitlement based rises, bonuses and incentives among others. Factors such as international pay and tailor-made pay along with broadbanding have been given greater prominence due to the rise in multinational operations of companies (Schwind, Das & Wager, 2007). Employee Motivation Motivation is the driving force within the individuals. In order to be dedicated and prolific the employees must be motivated. It is determined that compensation system impacts employees in terms of setting specific goals, enticing and retaining them, motivating to develop their performance and comprehending suitable rewards among others (Schwind, Das & Wager, 2007). Reference Schwind, H., Das, H., & Wager, T. (2007). Canadian human resource management, a strategic approach. Canada: McGraw-Hill Ryerson Higher Education. Read More