Performance Management in HR

8/6/2019 Performance Management in HR

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HRM107 Assignment

Performance management in Human Resource

5/12/2011

Ngoc Anh VO



HRM107 Assignment

Perf orma nce ma nageme nt in Hu ma n Res ou rce

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In tod ay s e cono my, th e term of Huma n Res ou rce (HR) depar tme nt seems to b e an esse nti al se ction in m ost o f opera tion s. In cont ributing to th e tot al qu ality o f ma nageme nt , o rganiza tion s nee d to add m ore value from f unction s of HR to th e ir da ily bu sinesses. HR can b e ima ge d as ve ins which t ra nsp ort and link all pe ople in an o rganiza tion tog e th er. It als o supp o rts to oth er depar tme nt s such as mar ke ting , f inancing , ma nu fa ctu ring and so on b e ca use it pr ovides a goodrela tion ship be tw ee n pe ople in tho se b ra nch es. For example, wh e n a compa ny comme nces a nee d o f m ore empl oyees in mar ke ting d epar tme nt , HR depar tme nt star ts to perf orm a neffe ctiv e re cruiting pr ocess which mea ns to choo se th e right pe ople in right position s a t righttime. To do th a t , it h as to wo rk out ch ara cter istics of th e depar tme nt , wh a t value a pers on c a n

offer, wh a t spe cif ica tion s are nee de d e tc . The nex t stage is sele ction from se veral poss ible candid a tes f o r th e pr o fess ion . Mo re over, it als o con f orms to to p ma nageme nt res ults of howempl oyees perf o rm th e ir job s af ter th ey are empl oye d , discover be haviou r of th em and t ry toma int a in th e hu ma n capa city in de vel op ing and re ta ining o rganiza tion sobj e ctiv es.

According to Ston e, human resource management (HRM) involves the productive use of peoplein achieving the organization s strategic objectives and the satisfaction of individual employeeneeds (2010, p4) . He als o sta tes th a t HR ma nagers are strategic contributors (2010 , p36 ). He nce, HR ma nager is th e on e who d e cides th e succ ess or fa ilure of th e ma nageme nt . The ir resp on sibilities are to e nsure th a t th ey ado p t th e right HR appr oaches f or th e compa ny anddem on st ra te th e conn e ction b e tw ee n wh a t th ey do and o rganiza tion al perf o rma nce andempl oyee wellbe ing. Theref ore, to f orm an effe ctive HRM, HR lea ders nee d to ti e HRM tost ra te gic bu siness goals in purp ose of expa nding bu siness perf orma nce and d e velop organiza tion al cu ltu res.

Conse qu e nt ly, perf o rma nce o f th e staffs has a signif icant effe ct to th e organiza tion sHRf unction s. A well- t ra ining wo rkf orce acco mpl ishes a high qu al if ie d perf orma nce whiche ncou ra ges bui lding u p a hug e pr oductivit y. In a compe titiv e bu siness e nviron me nt , perf o rma nce ma nageme nt ( PM) is a bes t too l to m otiv a te pe ople. PM cou ld b e expla ine d as an

ongoing communication process, undertake in partnership, between employee and his/her intermediate supervisor (Bacal, 2010) . This is th e way of self- impr oving prese nt a tion o f ea chempl oyee in th e ma nn er to achie ve th e bu siness obj e ctives. In rela tion to PM, perf orma nce appra isal (PA) is th e oth er term th a t is nee de d to b e exam ine d . PA is an int e gral par t o f PM, itdo es not play an imp o rtant ro le in PM but it i s an esse nti al portion . If PM is a pr ocess of meas ure th e ma nageme nt o f labou r f orce, PA is a pra ctical too l to e valua te th e perf orma nce wh e th er mem bers are resp on sible f or th e wo rk in th e bes t int eres t o f th e compa ny.



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PM and PA are key p ie ces th a t h elp HR to impleme nt it s ro les in boo sting th e bod y scompe titiv e advant age and linking stra tegic HRM (SHRM) to HR activiti es obj ectively. They are des igned tobe nef it individu als - empl oyees and o rganiza tion al level - compa ny and ma nagers.

According Bacal (2010) , he comme nt s th a t PA cou ld sa ve time and co sts to ma nagers. By ado p ting a pr operly perf orma nce sys tem, it h elps to re duc e time ma nagers nee d to spe nd ontra ining empl oyees. PA is m ore about guiding wo rkers to acknow ledge how to a ct in a pr ofess ion al e nviron me nt; th e empl oyees are allow e d to wo rk alon e with less super vision .

PM is a too l to re war d , e ncou ra ge and ensure wh a t empl oyees are expe cted to do in a wo rkpla ce. It benef its th em by equi pp ing th em a comf ortable wo rking e nviron me nt but still warra nt s th a t th ey are doing in a right appr oach in th e custo m of th e ir job resp on sibilities and

del ivers a de vice to who lack of an impr oveme nt in th e ir perf orma nce. A good PM cou ld ra ise labou r s m orale. An Austral ian Na tion al Audit O ff ice rep ort not es, PM pr ovid es anin strume nt tosys tema tically impr ove organisa tion al perf orma nce by linking and al igning individu al, team andorganisa tion al obj e ctives and res ults. It als o pr ovid es a mea ns to re co rd and re war d goodperf orma nce, and to ma nage any identi f ie d und erperf orma nce.

Car dy and Mi ller (200 6) sugg es t key chara cter istic re gar ding PM sys tem. These key sys tem chara cter istics are summar ize d in Tab le 1.

Table 1: Some key characteristics of the Performance Management systemPurp ose:

y Adm inistra tive y D e velopme nt al

Type of criter ia y Outco mes y Behaviou rs

Focu s of criter ia y Job/T as ky Role y Values

The pu rp ose o f th e sys tem is a signif icant pr incipal chara cter istic . It is class if ie d as e ith er Adm inist ra tive o r D e velopme nt al. Whe n a PM sys tem is ca te go rize d as having an adm inist ra tive purp ose, it wou ld f ocu s on u sing th e sys tem to supp ort pers onn el de cisions such as sa cking s, value pay dist ribution and pr om otion . He nce, thi s class of sys tem is be ing u se d as an e valua tiontoo l. On th e oth er hand , if a PM sys tem is ca te go rize d h aving a de velopme nt al purp ose, it th e n



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conc e nt ra tes to i mpr ove perf orma nce such as fee db ack and a ction pla nning . With thi s pu rp ose, th e PM sys tem is be ing u se d as a perf o rma nce impr oveme nt too l.

Type of criter ia is anoth er chara cter istic o f an effe ctiv e PM sys tem. It is use to d ef ine andmeas ure perf o rma nce. Criter ia f ocu s th e a tt e ntion and eff o rts of wo rkers and indic a te wh a t is m ore or less imp ortant in t erms o f perf orma nce. Perf orma nce criter ia are comm on ly class if ie das e ith er outco me o r be haviou rally base d . An outco me criter ion is ado p te d b y a PM sys tem wh e n th e organiza tion i s willing to c lear and un m istakable meas ures. Outco me cou ld b e expla ine d as how pr oductivit y of empl oyees is o r th e wo rkers achie ve th e goal o r not . This type of criter ia is very upfr ont and easy to meas ure. Anoth er type of meas ures is be haviou ral criter ia. Its ma in use is to d e te ct wh a t t ype of activiti es wh a t wo rkers shou ld t ake and avoid

whi le pr oviding th e ir perf o rma nces.

Focu s of criter ia is th e f inal chara ct er istic . This stage is und er take n to id e nti fy which area th e meas ures ce nt re on such as job/t as k, ro le or value. D iffere nt o rganisa tion wi ll has differe nt a im on e valua ting empl oyees perf o rma nce. Tra dition ally, perf o rma nce criter ia have bee n f ocu se don th e tas ks perf o rme d b y wo rkers. For example, a job analys is wou ld d es cribe th e tas k as co llect e d o f var iou s dut y areas and rela te d t as ks. The n th e perf o rma nce criter ia will be se tt ledf or on e par ticu lar tas k or dut y. Conversely, oth er bu siness wou ld like to emp has is on roles playe d b y empl oyees. This re cogni ses th e tas ks perf orme d b y wo rkers can ch ange give ndiffere nt d ema nd s and oth er condition s. Anoth er poss ible appr oach to c ap tu ring andmeas uring job perf orma nce is to f ocu s on v alues. Organisa tion s comm on ly pr opose th e ir co re values as par t o f th e ir m iss ion d e velopme nt and st ra te gic pla nning . These values can b e eleme nt ary criter ia th a t am ount which mem bers are lines up with th e co re stand ar ds of th e organisa tion .

If poss ible, empl oyees will con stant ly expa nd th e ir perf o rma nce from on e judg me nt to th e nex t , so effe ctive ma nageme nt o f staff prese nt a tion shou ld e ve ntu ally impr ove an o rganisa tionand a id it s e nd less impr oveme nt eff orts. In m ore de ta il, a list o f comp on e nt s of an effe ctive PMpr ocess is es tablishe d wh a t PM re qui res (Tayl or, 2007)

1. D ire ction shar ing . It is esse nti al to co mm unic a te th e organisa tion shigh er-le vel goals such as its vision , m iss ion , values and st ra te gy th roughout th e organisa tion and th e nt ra nsla ting th ese into go als of poss ible depar tme nt s.

2. Role clar if ica tion . As a ma nager, a clear des crip tion o f job to ea ch empl oyee is vital. The ma nager nee ds to id e nti fy ope nly ea ch mem ber s role in t erms of his/h er day- to -day wo rk.



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3. G oal se tting and pla nning . Its purp ose is to t ra nsla ting o rganisa tion al a nd d epar tme nt al goals into spe cif ic goals f or ea ch empl oyee.

4. G oal ass ocia tion . This allow s any ma nager be ab le to see th e link b e tw ee n anempl oyee s goals and tho se of th e depar tme nt and o rganisa tion .

5. D epar tme nt al goal se tting . This e nsu res th a t ea ch wo rker think s th rough , a t th e star o f any perf orma nce stage such as wh a t an empl oyee has to do to achie ve his/h er goals.

6. Continuing perf orma nce m onito ring. This can b e don e by using co mp ut er- base d sys tems th a t meas ure and th e n ema il pr og ress and ex cep tion rep orts base d on th e pers on impr oveme nt tow ar d mee ting hi s/h er perf o rma nce goals.

7. Continuing fee db ack. It is be tt er to b e don e in both face- to -fa ce and co mp ut er- base dfee db ack on empl oyee s perf o rma nce rela te d to hi s/h er goals.

8. Coaching and supp o rt is an int e gral par t o f th e fee db ack pr og ram. 9. Perf orma nce assessme nt . This expresses th e f ocu s in PM shou ld b e on pla nning and

influe ncing how th e empl oyee s perf orma nce pr oduc es impr ove d co mpa ny res ults. 10 . Rem un era tion , re war ds and re cognition . It plays a signif ica nt role in pr oviding th e

con se qu e nces nee de d to k eep th e empl oyee s go al-dire ct e d perf o rma nce on t ra ck. 11 . Wo rkflow and pr ocess cont rol a nd re tu rn on inv es tme nt ma nageme nt . The ma nager

nee ds to e nsure th a t th e wo rker s prese nt a tion i s linke d in a mea ning f u l way via goal se tting to th e compa ny soverall meas ura ble perf o rma nce.

Performance appraisal is simply a management technique operating under a scientific veneer to manipulate and control employees by reinforcing behavioural norms that the organisationconsiders desirable Stone (2008, p331)

Ston e (2008 , p33 1) not es th a t perf orma nce appra isal is def ine d as a pr ocess th a t id e nti f ies, e valua tes and d e velops empl oyee perf orma nce to mee t individu al and o rganisa tion al obj e ctives. The appra iser ide nti f ies perf orma nce th rough ob ser va tion and th e co llection o f perf o rma nce inf o rma tion , e valua tes thi s compare d to a se t o f meas ure pr inciples and th e nde velops perf orma nce by el im ina ting rela te d pr ob lems, pr ovide t ra ining and d e velopme nt

wh e n n ee de d and es tablishing high er goals. Howe ver, th ere are some pr ob lems ar ise a t e very stage of th e pr ocess. Oliver (1998) h as liste d se veral diff icu lties th a t cou ld occu r.

y Insufficient standards.y Poor measures of performance.y Rater errors.y Poor or negative feedback to employee.



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y F ailure to apply evaluation data.y F ailure to differentiate reward outcomes.y T oo many people needing to be evaluated by a single manager at once.y A ppraisal forms too complicated and/or understood.y Managers concerned only with bad performance.

There are ma ny ways to m inim ise tho se ne ga tive impa ct s of PM. Firs t , th e ma nagers nee d to b e sure to fam iliar ise th e ir sel ves with th e pr ob lems discusse d abov e be cause und ers tanding th e pr ob lem cou ld b e usef u l to avoid it . Se cond , th ey nee d to choo se th e right e valua tion me thodto apply f or ea ch di ff icu lty, e very me thod h as it own pr os and con s. For example, th e ra nkingme thod avoid s ce nt ral te nd e ncy but c a n cause ill-feel ing wh e n wo rkers perf o rma nces are all

high . Third , well t ra ining super visors wou ld b e perfe ct to h elp th e ma nageme nt el im ina te ra tererr ors such as halo effe ct , ce nt ral te nd e ncy, le nie ncy/ st rictn ess bias, pre judic e, re ce ncy effe ct and rela tion ship effe ct . Those are taught to b e fam iliar with th e job s resp on sibilities andperf o rma nce obj e ctives. They nee d to h ave suff icie nt o pp ortunit y to ob ser ve th e empl oyee s job perf o rma nce and h ave th e know -how to di stingui sh b e tw ee n b e haviou rs th a t pr oduc e effe ctiv e and in effe ctive job perf o rma nce. Oth er signif icant i ss ues includ e d in t ra ining are PAte chniqu es such as ra nking , gra ding , grap hic scales, critical incid e nt s, Be haviou rally Ancho re dRa ting Sc ales, Be haviou r ob ser va tion scales, essay des crip tion , Manageme nt b y Obje ctiv e (MBO), th e bala nce d score car d and Assessme nt c e nt res. A clear und ers tanding on ea ch

te chniqu e is comp ulso ry. Mo re over, impr oving appra isal dema nd s not ju st f or t ra ining but f or re ducing out side facto rs including union press ure, th e differ ra ting o f payme nt , time lim its or th e nee d to ra tion al ize ra ting . He nce, t rying to b lock out th e influe nce of tho se facto rs nee d totake in pla ce.

In summary, th e use of an a ctive perf orma nce ma nageme nt sys tem in an o rganisa tion i s such anama zing outco me be cause th e effe ctive ness of thi s sys tem pr ovid es th e organisa tion lot s of opp ortuniti es. It se ts goals ; re view perf orma nce and ra ise staff with th e int e ntion o f ma ke cer ta in th a templ oyee perf orma nce links to o rganisa tion al stra tegic obj ectives. This paper has add resse d th e role of a positive perf orma nce ma nageme nt and perf orma nce appra isal has bee n id enti f ie d , its ava ilability is

on e of key p ieces in structu ring th e f irm s compe titiv e advant age over its compe tito rs and mee torganisa tion al stra te gic goals. Then , a stud y which stresse d on some fea tu res and f oc al gears of a perf orma nce ma nageme nt pr ocesses has als o b ee n pr ovid ed . As con se qu ence, tho se bas icund ers tanding h elp ma nagers to conc er n and pre dict wh a t m ight go w rong in thi s scheme and how tohand le a pr ob lema tic appra isal in th e bes t w ay.



HRM107 Assignment


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Performance Management in HR