Human Resources Comprehensive Assignment - Editing and formatting

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CHAPTER 7

Managing Employee Performance

WHAT IS A PERFORMANCE MANAGEMENT SYSTEM?

A set of integrated management practices

WHY A SYSTEMS APPROACH TO MANAGING PERFORMANCE?

Improves the organization’s ability to get the right things done

Increases employee job satisfaction by involving them in teamwork and key decisions affecting their jobs

STRATEGIC IMPORTANCE OF PERFORMANCE MANAGEMENT

Alignment of individual (and team) goals with organizational goals

Identification of training and development needs

Assessment of people’s strengths for business growth

MANAGEMENT PRACTICES

Setting clear expectations

Having specific standards of performance

Providing supportive and helpful coaching

Focusing on accomplishments

Recognizing and celebrating good performance

Creating action plans to improve performance (if necessary)

PURPOSES OF PERFORMANCE REVIEWS

Compensation

Administrative

Measurement of performance

Developmental

You may also wish to use Ethics in HRM 7.1 to discuss how ethics comes into play in performance reviews.

WHY DO PERFORMANCE MANAGEMENT SYSTEMS FAIL?

STEPS IN AN EFFECTIVE PERFORMANCE MANAGEMENT SYSTEM

Clarify work/objectives to be accomplished

Set goals and plan performance (you only measure what is important!)

Regular and frequent coaching

Review performance

Recognize and reward performance

TIPS ON COACHING

COMPLYING WITH THE LAW

Performance standards must be job-related

Employees must be given a written copy of performance standards

Managers must be able to observe performance

Managers and supervisors should be trained to understand their role in managing performance

Reviews should be discussed openly with employees

An appeals procedure should be established

WHO SHOULD PROVIDE PERFORMANCE INFORMATION?

Manager/supervisor

Self

Subordinate

Peer

Team

Customer

PUTTING IT ALL TOGETHER: 360-DEGREE REVIEWS

Ensure anonymity

Ensure accountability of participants

Minimize politics

Use statistics

Check for biases

360-DEGREE REVIEW INFORMATION

TRAINING REVIEWERS

Can improve overall performance of management system

Helps to remove barriers of time constraints and lack of knowledge

Helps by enabling managers to give precise and specific feedback in a constructive manner

PERFORMANCE REVIEW METHODS

Trait methods

Behaviour methods

Results methods

TRAIT METHODS

Measure the extent employee possesses certain characteristics

Used largely due to ease in developing list of traits

Can be biased and subjective

GRAPHIC RATING SCALE

BEHAVIOURAL METHODS

Behavioural checklist method

Behaviourally anchored rating scale (BARS)

Behaviour observation scales (BOS)

BEHAVIOURALLY ANCHORED RATING SCALE

RESULTS METHODS

Productivity measures

Sales volume

Number of units without defects

Management by objectives

Philosophy of management

Goals established jointly between manager and employee

GOAL-SETTING WORKSHEET

THE BALANCED SCORECARD

VARIOUS REVIEW METHODS

CONDUCTING FORMAL PERFORMANCE INTERVIEW

Ask for a self-assessment

Invite participation

Express appreciation

Minimize criticism

Change the behaviour, not the person

Focus on solving problems

Be supportive

Establish goals

Follow up

IMPROVING PERFORMANCE

Identifying sources of ineffective performance

Managing ineffective performance

SOURCES OF INEFFECTIVE PERFORMANCE

CHAPTER 8

Rewarding and Recognizing Employees

LEARNING OUTCOMES

Explain an organization’s strategic concerns in developing a strategic rewards program

Identify the various factors that influence the setting of pay levels

Describe the major job evaluation systems

Illustrate the compensation structure

LEARNING OUTCOMES (continued)

List the types of incentive plans

Explain the employee benefits that are required by law

Describe voluntary benefits

WHAT ARE REWARDS?

Financial

Direct (hourly wage, salary, piecework rate, bonuses)

Indirect (benefits)

Non-financial

Employee recognition programs

Flexible work hours

Any other program that provides value to the employee in exchange for their efforts

LINKING REWARDS TO ORGANIZATIONAL OBJECTIVES

Structure of rewards framework can motivate employees and align with business objectives

Companies that align rewards structure can have higher performance

“Total rewards” is a broader concept than just tangible rewards of pay and benefits

“Total rewards” includes career development and work climate/culture

COMMON ORGANIZATIONAL REWARD GOALS

Reward for past performance

Remain competitive in the labour market

Maintain salary equity among employees

Mesh employees’ performance with organizational goals

Control compensation budget

Attract, motivate, and retain key employees

Influence employee behaviours and job attitudes

COMMON ORGANIZATIONAL REWARD GOALS (continued)

Pay-for-performance standard

Effort to raise productivity and lower labour costs

Relationship of employee effort to reward

Motivational factor

Quantitative measure of employee’s relative worth

Relates to perceived employee contribution to organizational success

SIGNIFICANT GOALS DRIVING PAY AND REWARD CHANGES

FACTORS AFFECTING THE WAGE MIX

INTERNAL FACTORS DETERMINING WAGES

Employer’s compensation strategy

Perceived worth of a job

Employee’s relative worth

Employer’s ability to pay

Public-sector employers frequently will use “ability to pay” as a reason not to grant wage adjustments. Ensure students understand that this is a choice by the employer.

EXTERNAL FACTORS DETERMINING WAGES

General economy

Labour market conditions

Area wage rates

Cost of living

Collective bargaining

Legal requirements

INFLATION AND WAGE INCREASES

JOB EVALUATION SYSTEMS

Job ranking systems

Job classification system

Point system

Factor comparison system

COMPENSATION STRUCTURE

Wage and salary surveys

Wage curve

Pay grades

Rate ranges

WAGE CURVE

You may wish to ask students why the slope of the curve changes.

SALARY STRUCTURE

Explain that this is a pay grade structure with certain specific steps of progress in each range. Also, ensure that students understand that these pay grades were used to create Figure 8.5, Wage Curve.

OTHER WAYS TO DETERMINE WAGES

Competency-based pay

Pay based on how many capabilities employees have or how many jobs they can perform

Broadbanding

Few wide salary bands

INCENTIVE PLANS

Individual bonus

Team or group-based incentive

Merit raises

Profit-sharing

Employee stock ownership plans

EMPLOYEE BENEFITS

Indirect rewards on behalf of employees to improve the quality of their work and personal lives

Can be voluntary or mandatory

LINKING BENEFITS TO OVERALL REWARDS PROGRAM

Types and amounts of benefits need to be based on specific objectives

Primary objectives of benefits are to improve employee satisfaction and maintain a favourable competitive position

COST CONCERNS OF BENEFITS

Companies spend 35% to 45% of payroll on retirement plans, group health benefits, and paid time off

Costs are increasing

Many benefits are typically a fixed cost (e.g., health premium)

BENEFITS REQUIRED BY LAW (MANDATORY)

CPP/QPP

Employment insurance (EI)

Workers’ compensation insurance

Provincial hospital and medical services

Leaves without pay

VOLUNTARY BENEFITS

A choice by employers

Vast array of options, such as

Health and welfare insurance

Retirement and pension plans

Pay for time not worked

Leaves of absence

Wellness programs

Employee assistance programs (EAPs)

Educational assistance

Child and eldercare

Question students about their understanding of the various forms of voluntary benefits that some employers will offer. You may wish to refer students back to Chapter 5 as benefits relate to reasons why someone might want to work for particular employers.