Performance Management: JVA Corporation Simulation - Research Paper Example

Running Head: JVA Corporation Simulation Performance Management: JVA Corporation Simulation By _____________________ ____________________ Managing performance in competitive business environment, where human resource is considered as the most vital resources of an organization, is essential for retaining the best talent in the industry by reviewing their performance and rewarding them accordingly. According to Armstrong (2000, p.1), performance management is a strategic and integrated process that delivers sustained success to organization by improving the performance of the people who work in the organization and by developing the individual capabilities of individual contributors and teams.

The effective management of performance requires a solid understanding of the performance domain which enables to asses and improves performance, not only of the individual but of the organization as a whole (Cardy and Leonard, 2011, p.40) In view of the recent economic crisis and its after effects on business world including JVA Corporation, many firms have changed their strategy to cost cutting strategy while some have gone bankrupt. JVA Corporation’s decision to shut down its international operation is not advisable considering the fact that the livelihood of thousands of employees depend on the company.

Therefore, to avoid the closure, this document proposes to review the employee performance as well as the organizational performance on half yearly basis which will allow the employees to earn rewards rather than traditional method of increase. In this scenario, employees, whose performance is not up to the standard will not receive any benefits. The core of this strategy is to improve performance among the employees. The aim of this policy is to encourage the employees to work harder and making them aware of the intentions of the organization that this policy is replacement of its decision to close down its operation.

It is necessary to understand the improving performance is one of the important goals of performance management and the emphasis needs to be forward looking and focused on how performance can be even better in future (Cardy and Leonard, 2011, p.206). This policy aims to reward its employee basing on its performance which means the employees will be rewarded according to their work. While the increase in salary for few employees may be higher, the others may get moderate increase and some may not receive any benefits.

This way, the employees will not be affected by the change in policy considering the present situation, there will not be any change in the present salaries, but future benefits will depend on their performances. Thirty five percent of employees or 52500 employees out of 150000 are entitled to additional benefits or perks by the company. It is advisable to review their performance and implement cost cutting strategy by limiting their enjoyment status and making a provision in the performance management.

This will help in achieving the goal of 5 percent expenditure instead of 8 percent. As Armstrong (2000, p.16) rightly mentions that performance management needs to encourage a balanced approach with less focus on retrospective performance assessment and more concentration on future performance, focus on an individual’s contribution to the success of the organization and no forced distribution of performance ratings. Performance management operates as a partnership between the organization and each individual which means that every employee is an important part of JVA Corporation.

This policy will apply to every employee of JVA Corporation. Each and every employee will be compensated for his performance during his review of performance. Compensation among 35% employees who were earlier entitled to additional benefits will be eligible to enjoy the benefits depending on their performance. However, this policy does not aim to discourage employees but motivate them through constant training and benefits through effective performance management. Though the change may affect the employees, the situation can be handled for the initial period of six months owing to economic recession and through continuous training and development programmes.

This policy is equal to all employees and does not vary for international employees. International employees also will be needed to perform better to be eligible for salary hikes, and other additional benefits. However their salary structure will not be changed. Implementation of this policy will help the organization to reduce their expenditure from 8 percent to 5 percent which will be of great help during economic crisis instead of closing the international operations. References 1. Armstrong, M,. (2000) Performance Management: Key Strategies and Practical Guidelines, (2nd Ed) USA: Kogan Page Publisher 2. Cardy, R.L.

and Leonard, B (2011) Performance Management: Concepts, Skills and Exercises (2nd Ed), USA: M.E. Sharpe Inc.