HRM3706_ Exam Preparation Notes Summary 2021.

HRM3706_ Exam Preparation Notes Summary 2021. Performance Management. Demonstrate how performance management systems are linked to other human resource activities Performance management is not a standalone process isolated from other HR activities. The information gathered through the performance management process can be linked to training, development, and workforce planning. Through performance management the development needs of employees are identified which can then be fed into the training and development initiatives of the organisation. Development plans provide information on which skills will be required in future. Recruiting and hiring decisions is also based on this information. To do workforce planning, the organisation has to compile a talent inventory, which is based on information collected through the performance management system. Demonstrate this integration by considering the relationship between performance management and training. Through performance management, information is provided on the developmental needs for employees. Organisations can use this information to utilise their training resources efficiently, because training will only be provided to employees who need training in the identified critical areas, where performance improvement is required. Performance management can also be linked to workforce planning. Information collected through the performance management system can be used in setting up the organisation’s talent inventory. Development plans provide information on what skills will be needed in the near future. This information can also be used in recruitment and hiring decisions. The relationship between performance management and compensation systems is obvious. For performance-based pay to work, there must be a strong link between rewards and performance measures, and employees must know about it Distinguish between performance management, performance appraisal and performance feedback Performance management is NOT performance appraisal. • Performance appraisal refers to a system that involves employee evaluation once a year without any effort to provide feedback and coaching so that performance can be improved. It is a systematic description of an employee’s strengths and weaknesses • Performance management is more than just evaluating employee performance. It is clear that it is an ongoing process rather than a one-off event taking place, for instance annually or biannually. It is a comprehensive, continuous and flexible approach to the management of organisations, teams and individuals which involve the maximum amount of dialogue between those concerned.  Performance Feedback involves a mutual exchange of information that both parties share, discuss and jointly assess in planning future work activities. Appraisals often put employees in a defensive position, whereas feedback is usually perceived as more neutral and a process over which employees have some control and influence. Aim and roles of performance management The performance management system can serve the following 6 purposes; 1. Strategic Purpose: Help top management achieve strategic business objectives. • By linking the organisational goals with individual goals, the PM system reinforces behaviour consistent with the attainment of organisational goals. • Communicates what the most crucial business strategic initiatives are. 2. Administrative Purpose: Furnish valid and useful information for making administrative decisions about employees. • Includes salary adjustments, promotions, employee retention or termination of service etc. • The implementation of reward systems based on information provided by the performance management system falls within the administrative purpose. 3. Informational Purpose: Important communication device. • Informs employees about how they are doing and provides them with information on specific areas where they may need improvement. • Provides information on the organisation’s and supervisor expectations and what aspects of work the supervisor believes are important. 4. Developmental Purpose: Managers can use information gathered during the PM system, feedback specifically, to coach employees and improve performance on an on-going basis. • Allows for the identification of strengths & weaknesses as well as the causes for performance deficiencies. 5. Organisational Maintenance Purpose: Provides information to be used in work force planning. • Work force planning comprises a set of systems that allow organisations to determine priorities and to allocate human resources where they can do the most good. • Important component is talent inventory, which is information on current resources. • PM systems are the primary means through which accurate talent inventories can be assembled. • Other purposes include assessing future training needs, evaluating performance achievements at organisational level and evaluating the effectiveness of HR interventions. • By managing performance the organisation can track down the talent it has and the ones it still has to search for. In the meantime the organisation should endeavour to maintain or keep what it has in its talent inventory. 6. Documentational Purpose: Allows organisations to collect useful information that can be used for several documentation purposes. • Performance data can be used to validate newly proposed selection instruments. • Allows for the documentation of important administrative decisions. Especially useful in court cases. • Assist the organisation in applying consistency in its decision-making Characteristic of an ideal system and demonstrate how an organisation can achieve it.  Strategic congruence: Congruent with the unit’s and organisation’s strategy.  Contec=Congruent with the organisation’s culture, as well as the broader cultural context of the country.  Thoroughness: in terms of specified dimensions.  Practicality: in terms of cost, time and applicability.  Meaningfulness: in terms of the standards and evaluations for each job function.  Specificity: detailed and concrete guidance to employees about what is expected of them.  Identifies effective and ineffective performance.  Reliability: and consistent performance measures.  Validity: measures of performance.  Acceptability and fair for all participants.  Openness: Transparent in terms of performance evaluation, performance standards and feedback.  inclusive of all the people affected by the outcome.  Correctability: Mechanisms in place to correct possible errors.  Standardised systems.  Compliance with ethical standards. Negative consequences of poorly implemented performance management systems.  increased staff turnover: process unfair = upset and leave  False or misleading information may be used for rating: opportunities to fabricate info of performance  Self-esteem of employees may be lowered, due to inappropriate feedback  Time and money are wasted.  Relationships are damaged.  Motivation to perform is decreased.  Employees may suffer from job burnout and dissatisfaction.  Increased risk of litigation because of employees being appraised unfairly.  Unjustified demands are made upon managers’ resources.  Standards and ratings vary and are unfair.  Biases can replace organisational standards.  Mystery surrounds how ratings were derived. Discuss contextual congruency and explain how it differs from strategic congruency Contextual congruency refers to a situation where the performance management system in an organisation is congruent with the organisation’s culture as well as the broader cultural context of the region or country. In contrast, strategic congruency is achieved when individual goals are aligned with the goals of the unit and the organisation. The performance management system is then congruent with the strategy of the unit and the organisation Performance management contribution The advantages associated with the implementation of a Performance Management system are as follows 1. Motivation to perform is increased: Receiving feedback about your performance increases motivation for future performance. Knowledge about how you are doing and recognition about your past successes provides the fuel for future accomplishments. 2. Self-esteem is raised: Receiving feedback about your performance fulfils a basic need to be recognised and valued at work. This is likely to raise your self-esteem. 3. Managers gain insight into subordinates: Gaining new insights into a person’s performance and personality will help the manager build a better relationship with that person. Also, supervisors gain a better understanding of each individual’s contribution to the organisation. This can be useful for the direct supervisors, as well as for supervisors once removed. 4. The job of the person being appraised may be clarified and defined more clearly: In other words, employees gain a better understanding of the behaviour and results required in their specific positions. 5. Self-insight and development are enhanced: The participants in the system are likely to develop a better understanding of themselves and of the kind of development activities that are of value to them as they progress through the organisation. 6. Administrative actions are more fair and appropriate: Performance management systems provide valid information about performance that can be used for administrative actions such as merit increases, promotions, transfers and terminations. In general, a performance management system helps ensure that rewards are distributed on a fair and credible basis. 7. Organisational goals are made clear: The goals of the unit and the organisation are made clear, and the employees understand the link between what they do and the organisational success. 8. Employees become more competent: An obvious contribution is that employee performance is improved. In addition, there is a solid foundation for helping employees become more successful by establishing developmental plans. 9. There is better protection from court cases: Data collected through the performance management system can help document compliance with regulations (eg equal treatment of all employees regardless of gender, race, ethnic group). 10. Employee misconduct is minimised: includes accounting irregulraties, abusing overtime poliices, inappropriate gifts for clients and using company resoruces for personal use. PM provides context where misconduct is clearly defined with companying consequences for transgressions. 11. Better and timelier differentiation between good and poor Performers: The performance management system allows for a quicker identification of good and poor performers. It also forces managers to face up to performance problems in good time (i.e. before the problem becomes so entrenched that it cannot be remedied easily). 12. Manager’s view of performance is communicated more clearly: The performance management system allows managers to communicate to their subordinates their judgments regarding performance. 13. Organisational change is facilitated: In cases where an organisation wants to change the organisational culture, this initiative can be added to the employees’ list of responsibilities and be subjected to review, together with other performance areas. 14. Motivation, commitment and intention to stay in the organisation are enhanced: When employees are satisfied with their organisation’s performance management system, they are more likely to be motivated to perform well, to be committed to their organisation and not try to leave the organisation. 15. Voice behaviour is encouraged: involves making suggestiions for changes and Improvementthat are innovative, challenge status quo, intend to be constructive. 16. Employee engagement is enhanced: feelings of involvement, commitment, passion and empowerment may result in in behaviours that are innovative and demonstrate good org citizenship and support. Learning Unit 2: Performance Management Process Illustrate by means of a diagram the performance management process 1.Prerequisites Stage Two important prerequisites for the implementation of the performance management system are;  Knowledge of the organisation’s mission and strategic goals:  To ensure that these strategic goals cascade down the organisation and lead to concrete actions, a conscious effort must be made to link them with individual performance.  A link should cascade from the organisation’s strategic plans, unit strategic plans, job descriptions & individual and team performance.  There is widely documented evidence that performance management systems have a critical role in translating strategy into action.  Organisation’s mission statement = refers to a statement of what the organisation is all about  Organisation’s vision statement = refers to the statement of where the organisation intends to be in the long run (10 years)  Organisational goals = refer to a statement of what the organisation hopes to achieve in the medium-to-long-range period (i.e. in the next 3 years or so)  Organisation’s strategies = refer to the description of game plans or the how-to procedures in an endeavour to fulfil the mission and vision statements, as well as how to achieve the stated goals.  Knowledge of the job in question: o Done due to the process of job analysis. o Job analysis = refers to a process of determining the key component of a particular job, including activities and processes. Without it, it is difficult to understand what constitutes the required duties for a particular job. o As a result of a job analysis we obtain information on the task to be carried out and the knowledge, skills and abilities required for a particular job. o The two products of job analysis are the job description and job specification. o Common methods for conducting job analysis. Observation, interview & questionnaire. Why are job descriptions (one of the products of the job analysis process) a key prerequisite for any performance management system? Job descriptions provide the criteria (yardsticks) that will be used in measuring performance. 2. Performance Planning • Manager provides employees with a thorough knowledge of the performance management system. • The manager and the employee meet to discuss and agree upon what needs to be done and how it should be done. • If employees know where the organisation or work unit is going and what they must contribute, they can coordinate their activities, cooperate with each other and do what it takes to accomplish those goals. • Planning as one of the PM stages includes a consideration of results and behaviour, as well as developmental plans. This means that during the discussion between the manager and the employee each of these factors needs to be clarified to each employee. • Results: o Results refer to what needs to be done or the outcomes an employee must produce. o Consideration of results needs to include 3 things;  Key Accountabilities  Specific Objectives  Performance Standards • Behaviour: o Need to focus on behaviour, not only on results. o Behaviour, or how a job is done, constitutes an important component of the planning stage o A consideration of behaviour includes discussing competencies, which are measurable clusters of KSAs that are critical in determining how results will be achieved. o Examples of competencies are customer service, written or oral communication and creative thinking. • Developmental Plan: o Manager and employee need to agree on a developmental plan o Allows an employee to determine whether there are areas they need to develop in order to attain the specified goals. o Three required components:  Description of developmental objectives  Activities that will be carried out to achieve these objectives  Date of completion 3. Performance Execution • Employees have the primary responsibility for and ownership of this stage by striving for results and displays the behaviours agreed upon earlier. • Primary responsibilities of employees/ factors to be present: o Commitment to goal achievement o On-going performance feedback and coaching o Communication with the manager (open and regular communication) o Collecting and sharing performance information (giving manager regular updates) • Primary responsibilities of managers; o Observation and documentation (observe & document good & bad performance daily) o Updates (update objectives, standards & key accountabilities if the org’s goals change) o Feedback (feedback on goal achievement and coaching) o Resources (employees equipped with resources & opportunities to reach goals in developmental plan) o Reinforcement (Encourage good performance and deal with bad performance by addressing it) 4. Performance Assessment • Both the employee and the manager are responsible for evaluating the extent to which the desired behaviour has been displayed and whether the desired results have been achieved. • This also includes an evaluation of the extent to which the goals stated in the developmental plan have been achieved. • The Performance assessment stage tracks the progress of and discrepancies regarding what were set in the prerequisites and the performance planning stages. • During this stage, the employee and the manager have the following responsibilities: They have to evaluate the extent to which : o the desired behaviours have been displayed o the desired results have been achieved o the goals stated in the development plan have been achieved • They are both accountable, therefore they take ownership of the process. 5. Performance Review • Involves a meeting between the employee and the manager to review their assessment. • This meeting is usually called the appraisal meeting or discussion. • It is important because it provides a formal setting in which the employee receives feedback on their performance. • Steps for conducting productive performance reviews: o Identify specific positive and negative behaviour o Solicit feedback from your employee about these types of behaviour. Listen for reactions and explanations. o Discuss implications of changing or not changing. Positive feedback is best, but make employee aware of what happens if poor performance continues. o Explain to the employee how skills used in past achievements can help them overcome any current performance. o Agree on an action plan. Encourage the employee to invest improving their performance. o Set up a meeting to follow up and agree on the behaviour, actions and attitudes to be evaluated. 6. Performance Renewal and re-contracting • Final stage in the performance management process. • Essentially this stage is identical to the performance planning stage. • The main difference is that the renewal and re-contracting stage uses the insights and information gained from the other phases. The importance of a performance management policy Performance management and development  provide a framework to value our staff, provide a working environment that acknowledge their contribution and build capacity to ensure organisational effectiveness.  are critical processes in achieving corporate objectives in that they link those objectives with employee goals and achievements. The processes focus on improving performance through matching outcomes against individual, team and organisational objectives.  are essential elements in the creation of an organisational culture that promotes high quality performance and the individual acceptance of responsibility and accountability commensurate with the individual’s position and role.  are the continuous processes of reflecting on, negotiating, developing, reviewing and making decisions about an individual’s performance in achieving organisational goals.  complement other management practices of providing ongoing feedback, review and development of staff. LEARNING UNIT 3: STRATEGIC PERFORMANCE MANAGEMENT