Benefits of a Performance Management System Essay

Activity Learning Outcome 1. Describe the purpose of performance management and its relationship to business objectives. Armstrong says that â€Å"One of the aims of performance management is to develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organization.† Organizations want people to reach their best because underperforming can cause loose for business. Performance management allows employees to look at their career development and potential promotions and career prospects. Also, performance management allows employees and management to discuss job changes (an example is given: new technologies coming to the company) and can adapt better to changes in the environment. 2. Explain the components of performance management systems. The main component of a good performance management system is a performance review or appraisal: This could be annually or two times a year and even monthly. This way Managers ensure and check their employees are performing as they would expect them to. Another component is training. For example, new computers or some sort of new technology might have arrived at the company and managers should ensure that all members of the staff are fully trained. Very important as well is to have a good reward policy in place for good performers. 3. Explain the relationship between motivation and performance management People that are motivated will work harder, therefore motivation helps higher performance. When staff is motivated, they will start looking at careers prospects including training to acquire new skills or develop new ones to then seek for promotions. If they’re motivated they become more ambitious and want to go up the company’s organizational chart. If employees are motivated, they’ll be willing to develop themselves not waiting for management to suggest or ask to go, for example, on a training course. Staff will be proactive an nd look for it themselves. Sometimes, self-learning is much more effective than a training course if they’re motivated. According to Taylor in his Instrumentality motivation theory that people are motivated mainly by rewards. This comes from the massification era and he sustained that the more you pay to your employees, the harder they will work for you. This was lately discussed as he was thought to treat people like objects. Vroom defended a Process/Cognitive motivational theory, where the person’s motivation depends on the perception of the effort they put on their work, as their efforts will result in better work. The processed the information they were given, questioned if the target given were achievable and if it was and if they achieved it if management were really going to give them the reward. And if they did, do they really value it? Learning Outcome 1. Identify 2 purposes of reward within a performance management system. There are plenty of purposes of the reward of performance management, being the main one to recognize performance and motivate individuals. Reward attracts people, motivates them and the most important thing, retains them within the organization. Recruiting is very hard, competitive and time-consuming; therefore, a low turnover of your employees always benefits the company. The job market is incredibly competitive and candidates A good reward strategy can definitely change behaviors and control expenditure, helping companies to advance their ideas of cost savings in their aims. 2. Describe at least 3 components of a total reward system, 1 of which should be non-financial. A total reward is the combination of monetary and non-monetary rewards. Some of the monetary rewards are mandatory, like the pay and the pension, but others are at the employer discretion. Non-mandatory and really valuable for the employee rewards are, at the moment, things like flexiwork or working from home, recognition by their managers and colleagues and made the employee feel valuable, career opportunities where they know that if they work hard, their hard work will be recognised and also quality of working life, having friends at work and being happy going to your workplace (is priceless). The example is given: When I worked at Oracle Corporation, we had a â€Å"Flexipoints† flexible benefits system that was our own choice. Depending on your job role and seniority level within the company, you were allocated several points (e.g. 2500 points) and you could choose your own benefits from a wide range in their intranet for a certain period. In my case, I usually went for the health insurance, which was about five hundred points, plus a few extra days of holiday, which was around one hundred points each, and maybe something else, and the rest was converted to extra annual cash. I loved it! Learning Outcome 1. Identify and explain the factors that need to be considered when managing performance There are plenty of factors to be considered when managing performance of the employees, starting with the goals of the organization. Managers should ask themselves things like what is the organization about? What are the goals of this specific individual? Does this employee have any training needs? Do they have any issue with the organization? Make sure they know the answers to these questions will help them to set an appropriate target for each of their staff. Managing performance should be a continuous process that is always measuring that the person that works for your organization contributes to the goals and objective of the company. When managing performance, we should consider different factors like: – Resource Issues: Do your team have the resources they need? Are some members of staff performing extra work because of hiring needs? All of this should be considered when reviewing their performance. – Time Issues: Is the employee coming to work on time? How important is punctuality for you and your team? And not only punctuality but does the employee uses the time as a resource effectively? How are his time management skills? Does the same task seem to take some employees much more time than to others? – Motivation: As explained above, the motivation of the employees and regular one-to-one would improve enormously their productivity – Skills and Knowledge Issues: Are your employees prepared and fully trained to perform their job? Have you started using a new piece of software recently and if so, are the staff fully confident about it? – Extenuating Circumstances: As we would see below in the performance review I had to conduct, sometimes employees have difficult times at home and go through the sad period that can affect their performance. Managers should not forget we are all humans and is not easy to leave all our problems at home. 2. Describe the data required by individuals involved in performance and reward management processes. There are plenty of documents and data required for performance and reward management processes. Learning Outcome 1. Explain the frequency, purpose, and process of performance review