Performance management is a way of checking how the employees of a firm are doing using different types of analysis. Such as performance reviews and appraisals.
Businesses need to manage the performance of its employees effectively if it is to remain competitive. Most modern employees have to interface directly with customers, and decision need to be taken by employees at every level within the business, rather than waiting to be told what to do in the olden days.
For a business to be successful, it needs all employees to be firing on all cylinders, working toward helping the firm to meet its objectives.
1.The purpose of performance management for Top-Shop is that the organisation needs to manage the performance of its employees effectively if it to meet the objectives of the business and to remain competitive. This is very important for the business because in order for them to be competitive with other businesses they will have to check the performance of the employees and find out the weak ones and either replace them with better employees or retrain them to improve upon their skills. So that they become competitive with other business. Performance management also allows the business to find the strong employees and give them promotions to help the business meet its objective. However in order for the Top-shop to produce a well-planed performance management system they will have to include the following:
* A statement outlining the organisation’s values.
* A statement of the organisation’s objectives.
* Individual objectives, which are linked to the organisation’s objectives.
* Regular reviews at every six month to at the end of each year.
* Performance-related pay
* Training and counseling
Top-shop monitors records and feedbacks to the employees in several ways. They could do this by using performance reviews, including appraisals, self evaluation, peer evaluation, target-setting for individuals and groups and measuring individual and group output/evaluation. These documentations will state how well the employees are doing or how badly identify his or her strong and weak points. Therefore when the monitoring and recording of the employees work has been completed, the documentation will be shown to the employees. Having a chat to the manager does this; he or she will state to the employee how well they are doing, if the employee needs to improve their work and so forth. Therefore a thorough feedback will be given to the employee, therefore this will enable the employee to improve his or her bad points and be better at her or his job. However if the employee is excellent he can carry on working at his regular level, and have a bit more confidence in what they are doing, knowing that the manager is pleased at what he or she is doing.
Performance management is a continues process that never stops because in order for the business to improve they will have to eliminate the weak points of their employees and meet the aims of the business. Performance management does this and finds the bad points of the employees and improves them and makes the business compete better against Top-shop’s competitors. Another advantage for the continues process is that it keeps the employees in shape and in line because if the work they are doing is poor they, will be nervous and believe that they could be fired. This will therefore keep employees motivated, and produce excellent work, and this performance management will also help the employees as it will make them better at their jobs as the weak points are removed.
2. Performance reviews including appraisals
This is used by Top-Shop and as they want every body to be pulling in the same direction. Therefore the business will set out a mission statement identifying the overreaching aims of the business. Given the aims and values, the business can now create objectives at every level within the organisation- right down to personal objectives for individual members of the organisation . It is through these objectives that the success of the organisation can be monitored and evaluated, as well as measuring the performance of individual members of the organisation Therefore in order for Magnet LTD to produce a well developed performance management they will have to include the following.
* A statement outlining the organisation’s values.
* A statement of the organisation’s objectives.
* Individual objectives, which are linked to the organisation’s objectives.
* Regular performance reviews throughout the year.
* Performance-related pay.
* Training and counselling.
When Magnet LTD has done this, it becomes possible to establish for a period of time the key result areas that an individual will be judged against. The results the individual achieves can be judged against expected standards. A typical example could be when the company wants to sell high quality products for a low price and to reach 20 million pounds in profit. The business could therefore be judged against these standards therefore if the business goes lower then this then the organisation can do a performance review and see where things went wrong.
Performance appraisal is a process of evaluating performance systematically and of providing feedback on which performance adjustments can be made. A example for a performance appraisal could be for a manager to sell 20 or more kitchens within the 1 months time limit. Therefore if the manager sells 19 but not 20 then a full analysis can be done to see where things went wrong. The performance appraisal helps this by comparing his results to his expected, therefore wherever it lacked they could improve on, and all his strong points to improve on as well so that he becomes a better employee.
b. Self-evaluation is very commonly used at Magnet LTD because self evaluation is very important at Magnet LTD because this organisation encourages their employees to establish meaningful goals and then to evaluate performance in meeting these goals. Employees who are given work assignments to do are also often encouraged to evaluate their own performance in carrying out these assignments to the required standard the benefits of this process is that employees will take more responsibility for their own work and performance, this will therefore motivate the employee. The employee will also have a greater understanding of their own work because of the employee self evaluating him self. Self evaluation enables individuals to develop a much clearer picture of exactly what it is they are doing – which makes work definition much clearer. A typical example could be when a employee sets him self of a target of finishing his work in a possible 1 week. Therefore after the work is completed the employee could self evaluate him or her self, so that they can see how well they did in there work, was it in detail, is it correct does it meets his personal standards. The employee will take this into account and see how well he did, and if he did well it could motivate himself and work even harder and possibly earning himself a bonus.
c. Peer evaluation is used within the business of Magnet LTD because this is another cheap method where information could be gathered about the employee to see how well or bad they are doing. Peer evaluation is used when a group of employees are working together. For example in Magnet LTD a co-operative team or a quality circle. Can be analysed by peer group evaluation which makes it possible to check on how much team members are contributing to the product of the teamwork e.g. the work results of the team effort, and to the process of the teamwork I.e. helping the team to work effectively as a high performance team. A advantage of this is that peer evaluation can help this because employees within a team will become friends, this will then lead to a process of critical friendship whereby individuals will help each other to improve performance. The only down side of peer evaluation is that it could often lead to the results not being very accurate because the employees within the team could be very lenient towards each other. Therefore if any problems are in the team, they could possibly not be found out, and this could result for the work being poor.
A typical example could be when a group of employees have worked together but the manager might want to know what things could be improved on. The peer evaluation could find out the disadvantages of the group, and correct them and make the group even stronger by training them. This will therefore help the team remove the disadvantages and work together more coherently and produce better work.
d. Target setting for individuals and groups is used by Magnet LTD because their performance magement team participates with the employee and their superiors in setting their own performance targets. These targets are directly aligned with the stated goals of the teams, units or departments they work for and, hence, with organisation targets. There are 3 broad approaches to staff appraisal, based on personal attributes, skills or performance. They are not necessarily mutually exclusive. Schemes may contain elemenst of each. A large organisation such as Magnet LTD may use deifferent schemes for different groups of employees
A typical example could be that a employee has to sell at least 10 kitchens for the month and this could be his target set up by his manager. Therefore if this employee passes his target he will be assessed by his skills, performance and personal attributes.
And if all these are at a very high level the business could give the employee a bonus because of him doing his job properly. This will therefore motivate the employee and work even harder for his next target because of him wanting to achieve a bonus.
e. Measuring individual and group output/production with every business there is satisfaction and dissatisfaction and this is also true for Magnet LTD because often in organisation including mine there is a great amount of dissatisfaction about the way different individuals or groups are rewarded in the system, which may seem to defy logic. Many appraisal schemes include behaviour scales because it is felt that behaviour rather than personality should be appraised and rewarded. Behaviour scales describe a range of behaviours that contribute, to a greater or lesser degree, to the successful achievement of the cluster of tasks that make up a job. Supervisors carrying out an appraisal are asked to indicate which statements on the specially designed form most accurately describe a subordinate’s behaviour. Documents which are used are a job evaluation and a merit rating scheme which the managers use to mark the employee.
A typical example in Magnet LTD could be that a competency list could be used by 1 of the managers by Magnet LTD the competency list is used to evaluate on how well the performance was by 1 of the employees with in the business e.g. a sales person selling kitchens to customers. Therefore the competency list could include headings such as the greeting of customers, taking the order, assembling the order and so forth. These will then be marked out of yes or no, the manager could then find out the strong and weak points of the employee and removing all his negatives to positives making the employee stronger through out.
3. How is your business’s approach to performance management influenced by motivational theory? You need to be aware of the importance of employee motivation and the significance of both financial and non-financial factors in terms of motivation. You should mention:
f. Abraham Maslow’s hierarchy of needs helped Magnet LTD improve the performance of the employees by a big percentage. Because his theory stated that meeting people needs in the work place will keep the employee well motivated. The theory suggests that unsatisfied needs could lead to dissatisfaction, therefore Magnet LTD provides the basics such as reasonable standards of food, within the business and a good and clean working environment. Another need which needs to be covered is security therefore whenever the employee is working or she will want to know they are safe e.g. in a fire, therefore suitable fire exits should be located and so forth.
The groups needs are concerned with an individual’s need for affection and love. Most people want to belong to a group therefore Magnet LTD set up small teams so they can work together and forms friendships therefore no employee within the business feels alone. Another needs is self esteem which is based on an individual’s desire for self respect and the respect with others. And finally self actualisation which is the need that is concerned with personal development and individual creativity to achieve one’s full potential. Therefore if theses points are met the employees motivation should be very high because his working facility’s are very high provided by Magnet LTD and his socialising skills as well as the members of staff are very friendly. And whenever the employee needs rest a relaxing room is provided for them to relax, so there is no stress when they are doing their job. Also the financial factors are high because excellent working environment must be provided. Good food as well, the security measures and so forth.
g. Frederick Taylor’s principles of scientific management does influence Magnet LTD in several ways because the monetary reward was an important motivating factor that would drive the system. Higher rates of pay could be offered as an inducement for increased rates of output. He used workers who were prepared to work hard to set a standard for others: “rate busters” who could destroy any informal agreements about systematic soldiering established by informal groups. Frederick Taylor’s principles helped Magnet LTD to make employees work harder and at a much higher rate. Because by following Frederick Taylor’s principles of scientific management can help employees work harder because his system helps employees work at a easier rate but produce more effective work.
This is because the employee follows a set of instructions and uses his skill to do the job he is required to do. However the motivation of the employees could be low because the job will be to easy to do and the employee could get very easily bored, therefore the job will have to varied a bit in order to the keep the employee well motivated. Another problem with this theory is that another way to keep the employee happy is too pay him or her more then other businesses do, this will make the employee motivated and keep on doing his or her job properly. However for Magnet LTD it will be a bigger expense but if it pays off the profit margin should be up and pay for the deficit.
h. Douglas McGregor’s theory X and Y Douglas McGregor’s Douglas McGregor looked at two types of motivational theory and how they effect employees when working.
The theory x is where businesses use strict rules of management to motivate employees. This theory is believed to make employees feel demotivated because employees are managed carefully and are monitored on every task that they work on. Theory x is used by some business because they believe that employees dislike work which means in order for their staff to perform properly they need to be carefully managed and controlled when they are working to complete business activities.
This is where he believed that employees disliked work because of the working conditions and the way that employees where managed that made them feel less motivated in business activities. The benefit of businesses using this theory is that employees have more confidence which results them to feel more motivated as businesses look at changing company procedures to help make their staff feel relaxed are there are no real incentives given to an individual to make them think they can do better. This also helps employees expect the working conditions better because they believe that the employer is concerned about their employees which helps them become more interested in the job and helps McDonalds staff to do better.
I. Frederick Herzberg’s two-factor theory identified a range of dissatisfies associated with the context and satisfiers associated with the content of jobs. Dissatisfies include low pay, poor working conditions, unfair treatment of employees and so forth. Magnet ltd must therefore be careful of the above factors because the above factors would cause dissatisfaction which would, in turn, lead to absenteeism, poor levels of output, resistance to change and negativity in the workplace. However if these negative factors affect the employees they could be counter attacked by using positive factors such as recognition of effort and performance, sense of achievement, assumption of responsibility and so forth. Therefore magnet ltd must look at this theory very carefully because if employees feel negative then sales will lower and customer service will be affected which could affect magnet ltd very seriously.
4. To manage performance of a company’s employees, the business needs to be aware of key aspects of legislation. Outline the following and their impact in your business:
j. Maximum number of hours an employee can work in a week Some employees could work for the maximum number of hours and this could affect the performance of the employee working at Magnet LTD. Because this could make the employee feel very tired for the next week of work because of the long hours he did at his or her job, this is because the employee could be stressed very tired and having no energy to do work. This could affect my business because the employee wont be working at a very high level therefore if a important document is needed this employee could make mistakes as he could feel very tired.
However longer hours of work has less pressure on the employee because he or she will have more time to work on their assignments and this will make the employee feel more relaxed and stress free. This will be good for the business of Magnet LTD because the work carried out will be done in a good and quality way because of their being no pressure on the employee.
Another benefit is that the employee will be happy as he or she will receive a higher wage, this will make them more motivated and work more hours in the week so that they can receive more money in wages. This will again benefit the business because more work is carried out for Magnet LTD and therefore the levels of sales will increase.
However the downside to all of these factors is that even though more workers are working for longer hours. The wage bill of my business will increase because bonuses and salaries will have to be paid to the employees. However if the level of work is excellent then it wont matte because the extra amounts of profit earned should cover this expense.
k. Regulations governing leave arrangements (including maternity and paternity leave) This will affect my business because some excellent working women could become pregnant and this would be a big loss for my business, because some of the excellent workers will be lost and the business could suffer as the work out put could decrease.
Another problem to this for my business is that the women who are pregnant who leave my business, still have to get maternity pay for at least a few weeks. This would be a disadvantage to my business because money would be paid to a employee who might not work again for my business.
However even though if the woman returns to work at Magnet LTD she might be performing at her best because of her having to look after her child, she will be tired all the time and be under big stress. This will therefore be a problem for my business because the employee will not work at her best and could make mistakes which could be very costly to Magnet LTD.
l. Minimum wage rates Will make some employees work harder in order to increase their pay, and to get bonuses. This will improve the business as he or she might raise competition with other employees who might want wage rises or bonuses as well, this will therefore improve the work output of the business because as all the other employees are working much harder.
There is a downside to the minimum wage rates and that is that some employees might get a basic wage and feel that there is no need to work hard, because even if they work harder they will still receive the same amount by only doing a average days work. Which will also affect other employees and therefore the performance of Magnet LTD’s employees could decrease. This would be very bad for my business because less work will be done and the business will slow down and sales could decrease as well. I will therefore fall behind my competitors and loose out on a lot of money. Therefore in order to avoid this staff must be kept happy and given annual bonuses so that they keep on working hard.
This could have some positive and negative effects on my business because the employees who get paid a decent wage will work harder than those who get paid less.