Briefing note performance management

Two purposes of performance management and their relationship to business objectives: Performance management drives employee behaviour to align with business goals and objectives. This alignment happens because job responsibilities and expectations are clear, resulting in increased individual and group productivity; and also better information is available to use for promotion decisions. Having a Performance management system in place will serve the following purposes; †¢Employee decision-making Appraisal information is used as a basis for pay increases, promotions, transfers etc. †¢Employee development Appraisal information is used to guide training, job experiences, mentoring and other developmental activities. Three components of performance management systems: There are several components of a successful performance management system. An effective performance management system is not a one-size-fits-all approach but will generally include the following components: Plan: Setting clear objectives and goals and establish performance standards. Monitor: Identifying key performance indicators and conducting accurate and regular performance appraisals/ reviews and rewarding performance effectively. Review: Regular and honest feedback through performance planning conversations and career development initiatives. The Relationship between motivation and performance management On a basic level people are motivated towards desired outcome such as congratulations from the manager for a job well done or to avoid an undesired outcome such as an argument with the boss about targets not been hit. ?There are extrinsic and intrinsic factors to how we as individuals channel our motivational energy. ?Getting people to ‘opt in’ as oppose to ‘opt out’ is an important part of communication in business. The ideas of Abraham Maslow have had considerable influence on management thinking since the late 1940’s. Maslow has a positive view of human nature; a belief in the individual’s potential for personal growth – what he called self-actualisation which is displayed in his pyramid of Hierarchy of Needs. Maslow suggested that needs only motivate people when they are unsatisfied. When applied to his hierarchy lower-order needs (basic physical needs, comfort, safety and security) have to be satisfied before higher order needs (self-esteem and personal growth) assert themselves. To apply these theories into the workplace you should make sure your workforce is getting its basic physical and safety needs (reasonable working conditions, job security etc. ) Applying Maslow’s model will mean employees are more likely to work towards company goals only when there is harmony with their own personal goals. MaslowHerzberg Fred Herzberg’s two factor theory is based on looking at the main factors which result in either satisfying or dissatisfying experiences at work. The assumption is that if the individual is satisfied in their work, this will mean good performance, or, at the very least a willingness to stay on the job. Factors leading to dissatisfaction were found to do with conditions of work – company policy and administration, technical supervision, salary, interpersonal relations and physical working conditions. Herzberg called these the hygiene or maintenance factors. These are necessary minimum for a healthy workplace – they make people come into work and stay there but, they don’t necessarily encourage people to be productive. It is the other factors, the ‘satisfiers’ or ‘motivators’ such as achievement, recognition, the work itself, responsibility, advancement, that encourage people to work harder. The link between motivation and performance seems to be an obvious one. If individuals are highly motivated, they will perform better. In turn better performance may well lead to a sense of achievement and result in greater motivation. Thus relationship between motivation and performance can be a mutually reinforcing one. Factors to be considered when managing different levels of performance: Many managers mistakenly spend most of their effort on trying to improve their low performing employees, believing that their high performers are low maintenance. The low maintenance belief is prolonged because high performing  employees are self-motivated individuals that need very little daily work direction. However the fact is that high performing employees do need a lot of attention to sustain their high level of performance. They need praise, recognition and collaboration. High performing employees are very skilled at working independently and will become frustrated if their manager give s them too much direction. These employees will seek guidance form their managers when they need assistance, they take ownership and pride, seek challenges and are bored quickly with mundane tasks; they need to feel valued by their manager and the company. As a manager you must make them feel like a business partner, not just an employee. Get them involved in goal setting, seek their advice from their area of expertise, give them exposure to higher management and other executives – all these things will show you value and trust them – in turn they will give you their loyalty. Plateaued Performers have the mind set of either not preparing or wanting to progress any further, they have petered out or are ready and willing to progress but are stuck in their current role due to other factors surrounding them. They are likely to be less enthusiastic, in a sales role they are likely to rely on existing relationships to drive sales, and they will appear to be ‘going through the motions’ with a sense of disengagement. Plateaued performers are experienced, valued employees who once, often recently performed at a higher level. However due to some unseen issue or closely held mind set, they are no longer reaching their potential. The likely outcome, if the problem goes untreated is that a once solid performer will find themselves plateaued stagnated in bit performance and professional development. Managing poor performance, whether related to capability or attendance, raises a number of different issues for employers and their HR professionals. Failure to perform or attend may be related to the following factors, which may or may not be connected and which may not be readily apparent such as lack of application or misconduct on behalf of the employee; lack of the required skills; and/or illness or disability. If poor performance is due to lack of application (unconnected to an underlying medical condition) or following the falsification of qualifications and  experience for the position that the employee holds or simply by a plain refusal to obey lawful orders, then it is appropriate to deal with the matter under normal disciplinary procedures for misconduct. However, the disciplinary procedure may not be appropriate when dealing with employees who are failing through no fault of their own. Where the failure to perform is due to a lack of the required skills, following say a reorganisation or where an employee has been prematurely promoted, then the employee should be assisted, wherever practicable, with further training or coaching and given a reasonable period to reach the required standard. Some employers therefore prefer to operate a gentler capability procedure referring to cautions rather than warnings and greater flexibility with regard to timescales The main purposes of reward within a performance management system are to retain, motivate key employees and to reduce turnover. It’s a known fact that people are the most important asset in the organisation. The Forum for People Performance Management and Measurement also believes that staff rewards have a valid purpose in this process. The groups Leadership and the Performance of People in Organisations: Enriching Employees and Connecting People study pointed out that many companies are using their performance management processes to encourage employees to work towards personal goals such as training and skills development. Claiming that such an approach can result in improved financial performance as well as being beneficial to the individual, the research said: Reward systems need to be adapted to reflect a leadership approach that ultimately satisfies peoples basic needs for achievement, a feeling of control over ones life and a sense of belonging.   Identify at least 3 components of a total reward scheme: The total reward system is a multitude of tools that the employer has in its hand and may be used to attract, motivate and retain employees. From the employee point of view the total rewards represent everything that he/she perceives to be of value resulting from the employment relationship. The reward conce pt covers both financial and non-financial pay. The components of a total reward system are: Compensation – is a critical component of the reward system that includes: basic pay system (annual or monthly salary rate) and variable or incentive pay systems (sales commissions, appraisal/performance-related pay, skills-base pay, etc. ) Benefits – are used to supplement the cash compensation that the employees receive and are designed to protect the employees and the family from financial risks. These can be life insurance, medical insurance, dental, retirement plan, savings scheme, uniform, gym membership, company car, breaks, company holidays, extra annual days, personal days, etc. Work life in this category is included the followings: workplace flexibility, paid and unpaid time off, health and well-being, caring for dependents, financial support, community involvement, and management involvement/culture change intervention. Performance and recognition Performance is a key component of the organisational objectives and involves the alignment of organisational, team and individual effort towards the achievement of business goals and organisational success. The recognition acknowledges and gives special attention to employee’s action, efforts, behaviour or performance. Recognition programs acknowledge the employee contribution immediately after the task has been completed. This type of recognition award can be financial or non-financial (e. g. , verbal recognition, certificates, trophies, tickets, dinners, etc. ) Development and career opportunity – includes learning opportunities (e. g. on the job learning, tuition, seminars and conferences attendance, corporate universities, self-development tools and techniques, new technology training, etc. );coaching/mentoring(e. g.  , leadership training, formal and informal mentoring programs, association memberships, exposure to resident experts, etc. ) and advancement opportunities (e. g. , internal job openings, promotions, overseas assignments, internships, succession planning, career pathways, etc. ) 2 sources of data required by individual involved in performance and reward management processes: Gathering performance information from a variety of sources increases objectivity and ensures all f actors impacting performance are considered. This information should include objective data like sales reports, call records or deadline reports. Other valuable information includes: feedback from others, results of personal observation, documentation of on-going dialogue, records of any external or environmental factors impacting performance many reviews also include an employee self-evaluation. Other documents that help define performance objectives include: past performance appraisals, current departmental and organisational objectives and documented standards related to career goals. In order to gather feedback from other employees, organisations will often use a 360 ° feedback process. Along with the completion of a self-assessment, selected peers, assistants, and managers are asked to contribute feedback around pre-identified areas. The feedback is based upon specifically identified skills or competencies and the final results are compared against the employees self-assessment this type of feedback increases self-awareness and in some cases is used to support the performance evaluation process