Effective Performance Management System for enhancing employees motivation - Essay Example

Effective Performance Management System for enhancing employee’s motivation AFFILIATION: Introduction to Performance Management System (PMS) In today’s world, organisations have realised that the only way of gaining a competitive edge in the business market is to develop an effective and competent workforce. As employees are valuable assets of the company, it is vital for the management team to ensure that they are satisfied with the business working environment. In order to enhance the performance of employees, it is important for Human Resource (HR) department to address the needs of every employee so that he/she is motivated to make valuable contributions in the organisation (Guest & Conway, 2011). Motivated employees tend to work harder and also at times come up with immense amount of creativity in their job performance. There are many motivational theories that can be implemented in the organisations for enhancing the employee’s performance but the best way is to identify each employee’s expectations from the job and to develop a performance plan that is compatible with their requirements (Wang, Jaw & Tsai, 2012). Some of the popular motivational theories are Taylor’s Theory, Maslow’ Hierarchy of Needs, Herzberg’s Two-factor theory, Vroom’s Expectancy Theory, McGregor Theory X and Theory Y and etc.; the central crux of each of the theory is that employees’ performance can be enhanced only by identifying their requirements from the job and providing them the opportunities of demonstrating their intellectual capabilities. The management of the organisation needs to carefully review the resources required by the employee to perform the task in an effective manner and hence the management needs to ensure that the resources are provided to the employees (Guest & Conway, 2011). One of the integral processes or systems of HR department is Performance Management System (PMS). This is a system that ensures that employees’ performance is evaluated on an ongoing basis so that they can be provided guidance on managing their jobs effectively (Redman & Wilkinson, 2006). With the help of an effective PMS, an organisation can ensure that the employees are well-aware about the tasks that they have to perform, year-end goals that have to be achieved, factors on which their performance will be evaluated and the rewards and recognition that will be given to them for doing exceptional work (Boxall & Macky, 2009). For the management, the performance management system allows them to monitor the performances and accordingly work on the need and requirements of improving employee performances. Tools used for Performance Management In order to boost the performance of employees, it has become mandatory for the HR manager to treat the employees like human beings and ensure that they remain motivated for giving best performance on their jobs. Employees need to be active at the workplace and it is the responsibility of the management to ensure that employees remain active and determined at workplace by providing them the required work environment. With the advent of time, the number of tools used for employee’s performance management has been diversified to meet the changing demands of the business environment. Some of the most popular tools are Paired Comparison, Ranking, Critical Incident, Forced Distribution, Management by Objectives (MBO), Behaviourally Anchored Rating Scale (BARS), Graphic Rating Scale, Forced Choice Method, Performance Test and Field Review Technique (Muller-Carmen, Croucher & Leigh, 2008). The three most commonly used tools are as follows: 1. MBO 2. Critical Incident Method 3. Forced Distribution Method Management by Objectives (MBO) According to this method, supervisor and his/her employee decide about the objectives that have to be attained by the employee and his/her performance is judged on the basis of fulfilment of those goals. In this method both the employee and the supervisor work together in forming objectives and accordingly achieving the set objectives. The advantages of MBO are that the employees are motivated to work hard for accomplishing the well-set goals and performance is evaluated on the basis of the objective factors. However, the limitation of this method is that the main focus is on numerical quotas rather than on continuous improvement of the employees and it is too time-consuming requiring huge amount of administrative work (Vaclav, Antonin & Petra, 2012). Critical Incident Method In this method, a list of statements regarding effective and ineffective behaviours of an employee is developed and these incidents represent employee’s behaviour on the job; the manager has to record the critical incidents on an ongoing basis. The manager needs to carefully observe the performance of the employee at workplace and record the behaviour of the employees accordingly. The advantages of this method are that it is an objective way of managing an employee’s performance and it avoids the element of biasness. The limitations of this tool are that negative incidents might dominate the positive ones, employees might be resistant to the close monitoring of their performance and the manager might not record the incidents on a regular basis (Currie, 2006). This may result in non accurate results regarding the behaviour of employees at workplace. Forced Distribution Method It is a ranking technique in which the evaluators are required to determine specific percentage of the rates for different categories such as average, above average and excellent or percentiles like top 15%, bottom 20%, 30% above average and 35% average. Each employee is allotted a category or percentile on the basis of performance appraisal done by the respective supervisor. The advantages of this method are that there is no biasness of evaluator and same scales of performance measurement are used for each employee. However, the limitations of using this tool are that employees who believe that they are productive and find themselves to be placed in the lower grade will feel frustrated and will have a low morale, they would show reluctance to work and rate of absenteeism would become high (Torrington, Hall & Taylor, 2009). Role of HR manager in PMS HR manager has to play an important role in designing an effective PMS that will ensure that the employee’s performance is reviewed on an ongoing basis and every employee is rewarded for demonstrating the best performance. This aspect is very important that all employees should be rewarded on equal grounds when they perform well without any biasness of any sort (Boxall & Macky, 2009). In addition to reward and recognition, it is vital for HR mangers to ensure that the supervisors are willing to provide their support to their subordinates in managing and enhancing their performance. Mangers need to keep a proper check and balance on the roles of the supervisor as well as the subordinates of any specific department. When employees are shown that their work is appreciated in the organisation and they are rewarded for their efforts, their morale will get boosted which will eventually improve their work behaviour and performance; all of these positive factors will enhance an organisation’s performance and profitability (Currie, 2006). In managing employee’s performance, there are three key areas that need to be properly addressed by the HR manager i.e. developing a Performance plan, monitoring the employee’s performance and giving feedback after assessment of the performance demonstrated (Wang, Jaw & Tsai, 2012). All three factors are extremely important and the HR manager systematically needs to address all these three factors. The foremost thing that is required is the development of a performance plan which is designed by the supervisor in consensus with his/her subordinate so that the employee is involved in setting the goals that have been achieved at year-end. Once the plan is developed, both the supervisor and subordinate will have to keep track of the target accomplishment level to ensure that the goals are achieved on time and according to the requirements. It is the responsibility of the supervisor to provide guidance to the subordinate when the person faces some problems or need some support in completion of the goal. Hence, PMS is a continuous process and it helps a company to ensure that its workforce is motivated and provides support in enhancing its performance in the market (Ferguson & Reio, 2010). Challenges faced by HR Manager The major challenges that are faced by HR manager are development and implementation of effective PMS; ensuring that objective evaluation of the employee’s performance is done so that true and fair picture of his/her contribution is evident and it eliminates the chances of evaluator’s biasness as it can impact the employee’s performance assessment done by the respective supervisor. One of the most important areas of concern for the HR manager is to reward employees with the factors that are their priorities such as monetary rewards, excellence award, certificate of appreciation, promotion, profit sharing and etc. Hence, the HR manager has to ensure that the employees are satisfied with their job and PMS so that they are loyal to the company for a long-time. It is important for organisations to retain talented employees and managers need to address all such employee concerns of retaining talented employees. Therefore, PMS is the most crucial aspect of the HR department because the HR department is required for managing and enhancing employee’s morale, productivity, satisfaction and performance. References Boxall, P. and Macky, K., 2009. Research and theory on high-performance work systems: progressing the high-involvement stream. Human Resource Management Journal, 19(1), pp. 3-23. Currie, D., 2006. Introduction to Human Resource Management. London: CIPD. Ferguson, K.J., and Reio, T.G., 2010. Human resource management systems and firm performance. The Journal of Management Development, 29(5), pp. 471-494. Guest, D. and Conway, N., 2011. The impact of HR practices, HR effectiveness and a ‘strong HR system’ on organisational outcomes: a stakeholder perspective. The International Journal of Human Resource Management, 22(8), pp. 1686-1702. Marchington, M. and Wilkinson, A., 2008. Human Resource Management at work. 3rd ed. London: CIPD. Morris, M.L., 2008. Combating workplace stressors: Using work-life initiatives as an OD Intervention. Human Resource Development Quarterly, 19(2), pp. 95-105. Muller-Carmen, M., Croucher, R. and Leigh, S., 2008. Human Resource Management - A Case Study Approach. London: CIPD. Redman, T and Wilkinson, A., 2006. Contemporary Human Resource Management - Texts and Cases. 2nd ed. Harlow: FT Prentice-Hall. Torrington, D., Hall, L. and Taylor, S., 2009. Fundamentals of Human Resource Management: Managing People at Work. 1st ed. Harlow: FT Prentice Hall. Vaclav, O., Antonin, P. and Petra, J., 2012. Processes, Performance Drivers and ICT Tools in Human Resources Management. [Online] Available at: < http://www.cjournal.cz/files/58.pdf> [Accessed November 30, 2012] Wang, C.Y.P., Jaw, B.S. and Tsai, C.H.C., 2012. Building dynamic strategic capabilities: A human capital perspective. The International Journal of Human Resource Management, 23(6), pp. 1129-1157. Read More