Question 1: Discuss how the issues above will have an impact on the six steps in the performance management process i. e. how can these issues be incorporated into the six steps of the performance management process – your response is to be supported by information provided in the case. (30 marks) The term performance management, may be defined as a systematic process utilized by companies or firms to enhance success by advancing the quality of performance of their staff.
This involves the participation of all employees, whether on an individual or a team basis which promotes organization effectiveness in alignment with the organization’s goals. In order for performance management to be effective, there are six steps of the performance management process which must be carried out. These include: prerequisites, performance planning, performance execution, performance assessment, performance review and performance renewal and contracting. The first step, prerequisites, takes into consideration knowledge of the organization’s mission and strategic goals and knowledge of specific job.
As the word prerequisite suggests, employees are required to know the organization’s purpose, where it is going, the organizational goals and its strategies before one can move to the next stage. Therefore, organizations are required to create specific and clear goals, transfer these goals to the departments which will communicate them to employees. In addition, job description and job specification should be clearly stated. These include the knowledge, skills and abilities required for the specific job, the duties of the job and its working conditions along with the necessary tools employed for hire.
Performance planning specifically relates to results, behaviors, competencies and development plan. It basically involves employee responsibility for producing results, its outcomes, evaluation of how well each objective has been achieved, how a job is done, how to measure skills and abilities, how results will be achieved and the areas in which improvement is necessary and the goals in each area of improvement. Performance execution is a critical step in the performance management process as it involves both the responsibilities of the employee and the manager.
Employees are required to commit themselves to achieving goals, equest feedback, communicate with supervisors, gather and share performance data and adequately prepare for performance reviews. While on the other hand, managers are expected to discreetly observe and record findings, provide updates and feedback, utilize resources and reinforce objectives and goals. Performance assessment is administered mainly through managers, self and other sources such as peers, customers, etc. This enhances increased employee ownership and commitment, makes information available and creates mutual understanding. Performance review is a comparison between three elements; past, present and future.
This will enhance productivity and create greater success. During this stage/step, organizations should identify what each employee has done well and poorly, request feedback, highlight and discuss the implications of changing behavior, identify ways in which skills employed in the past can help reduce performance problems, agree on an action plan and discuss behaviors, attitudes and actions to be evaluated. Lastly, performance renewal and contracting involves the use of insight and information from the phases to drive performance growth and development improving the overall success of the organization.
The issues identified in the case study will impact the six step process significantly in that production levels will decrease due to absenteeism, unavoidable financial costs will be incurred due the increase in labour turnover and the company having to go through the recruitment process repeatedly, and time will be lost. However, carefully developing a good performance management plan using the six steps will address these issues. If the company can provide employees with information on the knowledge of the job and its duties, employees will know what is expected of them.
The six steps process will give the company adequate feedback that will address labour turnover, staff morale, and performance appraisal of staff annually. This process will allow the company to make comparisons so they can know where they went wrong, what and how to improve in specific areas. It will also provide insight so when the cycle starts all over again; it will do so on the right foot. The performance management process is an ongoing process where each component is very important and if each is implemented poorly, the whole system suffers. As a result, links being components must be clear.
Question 2: Select which you think are the four (4) most appropriate issues to be included in an annual performance management plan and provide a justification for your answer. (12 marks) In reference to this case, the four most appropriate issues to be included in an annual performance management plan are those related to absenteeism, performance appraisal, labour turnover and training and development. Absenteeism is the term used to describe the rate of occurrence of habitual absence from work or duty. The company reported that there is a growing absence problem among the store’s staff.
This can be considered to be one of the major issues to be addressed in the company’s performance management plan as absenteeism hinders productivity and growth. When employees are frequently absent from the job, productivity is lost as well as company time. In addition, there are financial costs associated with this issue as they are being paid for a job not done. Performance appraisal may be referred to as the systematic evaluation of the performance of employee’s individual job performance of the assigned duties and responsibilities.
The case stated that the company has a formal appraisal process policy for staff, however due to negligence by the former manager, this was not administered. This issue needs to be discussed in the performance management plan as performance appraisal will help to identify the strengths and weaknesses of employees ensuring that employees and jobs are compatible, assessing the potential present in an individual to further growth and development and determines if one is eligible for promotion.
It is important that performance appraisal data be documented and recorded as this will drive the company to success in matching employees with the right jobs; capitalize on employees’ strengths, developing these employees making them more resourceful to the company. Labour turnover is the movement of employees in and out of a company over a period of time. The labour turnover of the company has increased by 5% as it is now 15% and the norm for the sector is 10%.
This simply means that the company needs to return to the drawing board and find ways to reduce the labour turnover rate. In addition, the company could interview individuals leaving the job to determine where they went wrong and make necessary improvements. Training and development of staff is very important. This increases the skill-set of employees and helps to direct the organization to the path of success in alignment with its mission and vision. From the last survey it was recognized that employees in the Montego Bay store had concerns over lack of training.
This therefore means that employees are willing to be trained. As a result, with the allocated JA$700,000 for employee development the company should strive to create some program that will facilitate training and development in computer accessories or related fields. In conclusion, these four issues need to be addressed in the company’s annual performance management plan as they are hindering the growth and success of the company. Reducing or limiting these problems will yield tremendous benefits.
Question 3: Identify and explain how four (5) ideal characteristics of an ideal performance management system can address issues indentified in the case study scenario presented. Your response is to be supported by information provided in the case. (8 marks) In addressing the issues highlighted in this case study scenario, four ideal characteristics that can be used to deal with these present issues are strategic congruence, standardization, validity and conciseness, proper training for evaluators.
Strategic congruence ensures that the company’s strategic goals are linked to the individual’s goals. The company’s mission and vision are clearly stated but the individual’s goals are not aligned to the company’s goals. The company’s vision is “By the year 2020, the Company will be “the largest and most profitable computer equipment and accessories stores in the Caribbean region with stores in Jamaica, Trinidad and Barbados” yet at the same time sales are falling and absenteeism is increasing.
Management needs to therefore communicate the goals of the organization more effectively to employees. Measures of performance must be uniformed and have a certain standard. It must be communicated to employees what is expected of them so that when being appraised they can be held to a common standard which is reasonable and just. Employees should know the number of sick days available, how often one can be late, etc. Validity and conciseness deals with what is applicable to the responsibility specifically to the individual.
Therefore the newly-appointed manager should be evaluated based on his specific job which is overseeing the operations of the company and not financial management. Evaluators, whether they are internal or external must be properly trained to conduct performance evaluation. They must have adequate knowledge of the duties and responsibilities of those being evaluated. Therefore, the company should use part of the allotted JA$700,000 to facilitate training for internal evaluators so that there will be a fair evaluation.