Human Resource Management - Performance Management - Term Paper Example

Literature review 1. Define what performance management is Traditionally performance management has been defined as a process used in evaluating employees performance parallel to organisation goals and objectives. The outcome of this analysis are used to reward the employee through promotions or salary increment or punishments such as demotions. Basically, the process measures the output of employees collectively after a certain period (Lee n.d,1). However, in recent times, performance management has been revamped in a way that the employees are evaluated individually over specific tasks done every day and the feedback given, sorely aims at motivating the employee (Buckingham & Goodall 2015, 11). Excellence is rewarded and weaknesses are strengthened through training and encouraging team work. For a company to be successful in its day to day activities, there has to be constant and effective performance reviews. Through performance evaluation, staff and their supervisors are able to: Discuss the performance of staff and the jobs they do Set goals and aims for development of the company Establish the specific objectives which should be aimed at contributing to different departments Discuss accomplishments as well as expectations of the employees 2. Briefly outline what the benefits of performance management are/why it's important When the process of performance management is conducted diligently and with a lot of transparency, it improves the performance of the employee. According to Colin Biggers and Paisley, their new model of assessing employees enhances teamwork as the team leaders communicate regularly at individual level. Through performance management employees are constantly reminded of their strengths, roles and the expected outcomes for that specific task. Active involvement of team leaders encourages trust and employee engagement in the organisation (Wang & Hseieh 2013, 3). Evaluating an employee objectively rather than subjectively encourages fairness in the process. Fair evaluation process makes the employer form fair appraisals. When the employees feel their appraisal s genuinely related to their performance, their trust in their leaders increase, commitment in their work increases, and these promotes job satisfaction (Lau & Oger 2012, 5). In regards to Pettit, Goris & Vaught (1997,83), giving feedback regularly in a form of compensation or training is a form of organisation communication. This highly determines the employee job performance and job satisfaction. 3. Describe what the old performance management system in CPB was The old performance management was more of a performance measurement and appraisal system rather than performance management (Broadbent & Laughlin, 2009; Neely, Gregory & Platts 1995). This system was rated unsatisfactory by employees especially on the areas of fair play, managing poor performers, and transparency in the performance and salary review process. Otley (1999) says that performance management should be linked to an organization’s control system and should go beyond measurement to management of performance. Lau and Oger (2012) avers that fairness should be evaluated in two fronts; how fair the process of performance management is, and how fair the rules and processes used when making decisions are. However, the old system succeeded in achieving what Tung, Baird and Schoch (2011) call achieving set goals. For instance, employees at CBP understand the firm’s values, goals and strategy. Its effectiveness comes in communicating the goals and strategy of the organization and aligning employee goals with organizational goals. However, as its shortcoming comes in the area of employee participation in processing information, decision-making and problem-solving (Wagner, 2004). 4. Describe the new performance management system in CPB is The new performance management system is referred to as PULSE (Productive Useful Leadership Strategy Engagement) which is a review process that is agile and encourages regular and honest communication, forward focused conversations which give employees regular and relevant feedback. Wang and Hsieh (2013) opine that authentic leadership positively affect “employee attitudes, behaviour and outcomes like job satisfaction, job commitment, creativity, engagement and organizational citizenship behaviour” (p. 614). Their view is backed by Buckingham & Goodall (2015) who argues that incorporating a more collaborative and transparent approach to performance management. The new system also focuses on the strengths of the employees and transparency in how the review process connect to remuneration reviews with a simple rating system. According to Otley (1999), the management perspective involves management of the results (ends) as well as the determinants of the results – the means. This, as Lau and Oger (2012) say makes employees understand that appraisals are correlated to their performance which fosters trust in the leadership. The new system in CBP has one limitation: the performance reviews are not aligned with the remuneration reviews. The employees feel that they are not involved in remuneration reviews and they have no control over both the process and outcomes. Findings & Analysis Quantitative Analysis These findings provide a clear representation of different feedbacks received from the pilot group during the survey. The survey was conducted on a sample size of 10% of the firm’s staff. The pilot group was asked different questions regarding how they felt about the new system and the information gotten used to plot different visual data representations. 1. Demographics During the course of the survey, we have gathered a total of 20 respondents, randomly selected from different departments, state, roles and gender of the practice. Undeniably, this is a limitation for the research as the sample size undertaken was obviously too small to be used as representational data for the overall company, yet, this can be justified by the lack of time we had. Based on the findings, chart 1.A showed 25% of respondents were from the construction and engineering team. There was also an equal distribution of 20% which were from insurance, property & development, corporate & dispute resolution. Lastly the same amount of staffs at 5% made up of different department like finance/accountants, IT, and reception. Chart 1.B illustrates the various regions that the pilot group were from; 45% represented NSW, 30% Queensland, and the remaining 25% were from Victoria. The findings from chart 1.C also indicates a diversity between the participants in terms on the role they play in the firm. Results showed an equal 5% working as a partner, an equal 10% are special counselors, 20% are secretaries, 25% from shared services, and the highest 30% are senior associates. This enabled us to compare the different perspectives of each department in order to gain a deeper insight on the success of PULSE. Finally, both male and female employees were also included in the survey as shown by the chart 1.D. Despite being both male and female, it is clear that the women were more than the men with the women making 72% of the total pilot group and men making the rest 28%. Chart 1.A Question – In what group/team do you work? Chart 1.B Question – In which state are you based? Chart 1.C Question – Please indicate your role. Chart 1.D Question – Please indicate your role. 2. Transparency To determine the transparency level of PULSE in the firm, the pilot group was asked some questions. These questions are included in Table 2.1 below, together with the responses from the pilot group. The group was given options on each question so as to help them fill in their exact view on the PULSE system. What stood out most is that 60% of the total group felt that the new system, PULSE, has helped in clarifying what their main roles are in the firm. 70% of the total participants used in the survey also agreed that the system had improved the communications in the firm which implies that the firm now had more effective communication processes unlike when the old system was in use. These two variables represent that a high percentage of the participants have felt that since PULSE was adapted, there is more clarity in terms of what is expected of them and how information is delivered. Based on the data, we also believe that a higher transparency level also leads to a fairer valuation on the employee. Adopting a fairer valuation can also justify the future feedback and remuneration given. Overall the respondents from the survey indicated that they support more transparency throughout the performance management process. Table 2.1 Transparency Strongly Disagree Disagree Neutral Agree Strongly Agree Responses Weighted Average PULSE has helped to clarify what is expected of me at work 0 (0%) 2 (10%) 2 (10%) 12 (16%) 4 (20%) 20 4/5 PULSE encourages open, honest and effective communication 0 (0%) 0 (0%) 1 (5%) 14 (70%) 5 (25%) 20 4.2/5 PULSE enables me to offer honest feedback to my supervisor 0 (0%) 0 (0%) 2 (10%) 14 (70%) 4 (20%) 20 4.1/5 It is clear how my performance review through PULSE links with my annual remuneration review 0 (0%) 3 (15%) 5 (25%) 10 (50%) 2 (10%) 20 3.55/5 The feedback I received as a result of PULSE will allow me to perform better in my role 0 (0%) 3 (15%) 5 (25%) 7 (35%) 5 (25%) 20 3.7/5 3. Communication Communication was a major theme that was poor in the firm before the new system was introduced. As stated earlier, this system only promoted one-way feedback and irregular conversation. As a result, communication was included in the survey and the following results were obtained. As shown in Table 3.1, 55% of the total population sample agreed that the new system would improve two-way communication, understanding of goals and overall performance. PULSE also encourages conversations that are forward looking. This it is evident in the results as more participants have agreed that the feedback they received is more constructive and assist them with working towards their goal, rather than dwelling on the past mistakes. Majority of respondent have also expressed their contentment over the regular meetings they received compared to the one year review as meeting once a year proved to be less valuable. Through PULSE, managers were able to communicate more consistently and accurately with their employees, which in turn helped employees perform their duties adequately and leads to the rise of positive attitudes and feelings towards their jobs. Table 3.1 Communication Strongly Disagree Disagree Neutral Agree Strongly Agree Responses Weighted Average Communication is an important contributor to me performance. 0 (0%) 1 (5%) 2 (10%) 6 (30%) 11 (55%) 20 4.35/5 PULSE will improve the quality of communication I experience with my supervisors. 0 (0%) 1 (5%) 8 (40%) 6 (30%) 5 (25%) 20 3.75/5 PULSE will make communication more easily accessible. 0 (0%) 1 (5%) 6 (30%) 8 (40%) 5 (25%) 20 3.85/5 Increased opportunities for communication will add value to my performance. 0 (0%) 4 (20%) 1 (10%) 6 (30%) 3 (45%) 20 4/5 Two-way communication will improve my understanding of goals and overall performance. 0 (0%) 1 (5%) 3 (15%) 5 (25%) 11 (59%) 20 4.3/5 4. Performance Management The old performance management system used by CBP had shown to be ineffective which led to disengagement and drop in morale amongst employees in the firm. With the new system in place, Table 4.1 confirms that our respondents are more confident in their quarterly assessments and are able to efficiently work toward their set goals because there is now more clarity and alignment in what they need to achieve, how their work will be measured, and how they will be rewarded. 65% respondents agreed that PULE will better manage and address poor performance. By being able to spot any weaknesses, CBP can instantly resolve this issue by offering the employee more training. 50% of participants agreed that PULSE will provide them with constructive feedback regarding their performance on a regular basis. Again, frequent communication is encouraged for both managers and employees to adjust any goals, as there are continuing changes in conditions and priorities throughout the year. Lastly we also have 65% agreeing to PULSE assist with recognizing high performance employees. CBP’s employees have become more confident in the reward system, and they are assured that a fair reward system is in place for those who achieve what was expected of them. Performance Management Strongly Disagree Disagree Neutral Agree Strongly Agree Responses Weighted Average PULSE will better manage and address poor performance 0 (0%) 1 (5%) 3 (15%) 13 (65%) 3 (15%) 20 3.9/5 PULSE will allow me to receive constructive feedback about my performance on a regular basis 0 (0%) 0 (0%) 5 (25%) 10 (50%) 5 (25%) 20 4/5 PULSE gives me a clear understanding of how my performance is measured 0 (0%) 1 (5%) 6 (30%) 10 (50%) 5 (15%) 20 3.75/5 Through regular feedback and conversations with my supervisor I am able to focus forward to achieve my goals 0 (0%) 3 (15%) 2 (10%) 9 (45%) 6 (30%) 20 3.9/5 PULSE appropriately recognises high performing employees 0 (0%) 0 (0%) 4 (20%) 13 (65%) 3 (15%) 20 3.95/5 Qualitative Analysis The respondents were asked three main questions; improvements that could be made to PULSE, differences between the old and new performance management system and the issues/concerns that PULSE’s process has. Four major themes crop from the responses; 1. Communication Most of the respondents feel that the frequency of meeting with supervisors being increased from annually to quarterly has improved communication and most of the issues were clear. They opine that, one is clear what is expected of him for the whole year. Additionally, the respondents feel that what is discussed between them and the supervisor is more relevant to their work. However, the respondents raise several issues in regards to communication. First, 70% of the participants feel that this process is time consuming. They do not understand why they have to go through the same process three times a year. Secondly, around 20% of participants feel that the supervisor is not well acquainted with the process. Additionally, one of the respondents feel that there should be more than one supervisor to avoid bias. 2. Transparency The results show that PULSE scores high on transparency of the performance management process. Most respondents feel the new system is more transparent compared to the old one. 40% of the responses show that most people are aware of what is expected of them and what areas are being appraised. Additionally since the meetings are held at closer intervals, one is able to clarify what is expected of them in achieving the organization’s objectives. Similarly, respondents feel that the feedback given by the managers is fair and honest and the 5 areas of reflection are relevant. Nevertheless, some respondents feel that their managers are not forthcoming with information and there is a chance that some are not honest. 3. Measurement Technology 80% of the respondents had concerns of the measurement technological system employed by PULSE. About 40% of the respondents feel that the system does not the edit functionality in case of a mistake in filling and submitting the forms. A similar number of them is concerned about the privacy of their personal information. About 30% of the respondents feel that the comment box should be divided into two; for the employees and for managers. 10% indicated that the system should be different for people from various departments instead of being the same for everyone. Despite the concerns, some of the respondents feel that the online system is better than the previous one. 4. Rating versus remuneration This study found out that the rating system does not indicate what a particular rating implies especially in view of remuneration. 50% of the respondents wonder if improvement of rating indicate a pay rise and how a drop in rating would affect their remuneration. There is no emphasis in the system about salary review. Other concerns raised in relation to rating include; unclear meaning on what constitutes a rating score, for instance what a rating of 1 or 2 or 3 means; (5%) feel that rating should not be compulsory; and there should be a way of managers to justify their ratings. Reflection With a broad topic to explore, working with extremely knowledgeable individuals, requirements to adhere to and a project to deliver; working in this team was a challenging and enriching experience. When the project started, the first reality we were faced with is was the overwhelming nature of information on performance management. Thus, narrowing the information to meet the requirements was our major task. Planning as a team and delegating work worked for us. Our team had the advantage of having individuals from different backgrounds, hence each individual used their knowledge to contribute to the project. As a team, we set goals and objectives and planned on how to achieve them incorporating the timeline for each objective. Weekly targets were set for each individual’s work and research. Secondly, effective communication helped the team especially because we met every week to report on progress of each one’s work. Working together to create the survey and analyze data helped us to brainstorm on ideas and do critical analysis on concepts. Finally coming up with roles for each member made the work easier. Through the process of the project, I noticed work skills that I need to develop to as I progress in the professional world. Key among these skills is leadership; coordinating group members and ensuring that each person performs their work with the ultimate goal in focus. Secondly, developing flexibility – this experience taught me that teams often have to deal with changing conditions, thus as a good team player, one has to adapt with the changing situation and ensure the goal is attained within the set deadline. Finally, I need to further develop my problem-solving skills. A good team player should be able to anticipate problems, face them when they occur and have a solution oriented approach rather than a blaming approach. 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Otley, D. 1999, 'Performance management: a framework for management control systems research', Management Accounting Research, vol. 10, pp. 363-82. Rousseau, D.M. & Barends, E.G.R, 2011, 'Becoming and Evidence-Based HR Practitioner', Human Resource Management Journal, vol. 21, no. 3, pp. 221-235. Taticchi, P., Balachandran, K. & Tonelli, F. 2012, 'Performance measurement and management systems: state of the art, guidelines for design and challenges', Measuring Business Excellence, vol. 16, no. 2, pp. 41-54. Tung, A., Baird, K., & Schoch, H.P. 2011, 'Factors influencing the effectiveness of performance measurement systems', International Journal of Operations & Production Management, vol. 31, no. 12, pp. 1287 - 310. Wang, D & Hsieh, C 2013, ‘The Effect of Authentic Leadership on Employee Trust and Employee Engagement’, Social Behavior and Personality, vol. 41, no. 4, pp. 613-624. Wagner, A.J. 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