Chapter 1: Performance Management and Reward Systems in Context
Cash Compensation
Base pay; incentives; COLA
Contributions of Performance Management For Organization/HR Function
Clarify organizational goals; Facilitate organizational change; Fairer, more appropriate administrative actions; Better protection from lawsuits
Performance Management
Continuous process of identifying, measuring, developing the performance of individuals and teams and aligning performance with strategic goals of the organization
Performance appraisal characteristics
Driven by HR; Assesses employees; Once a year; Lacks ongoing feedback
Contributions of Performance Management varies depending on
Employees; Managers; Organizational Functions
Strategic Congruence
The extent to which a performance management system elicits job performance that is congruent with the organization's strategy, goals, and culture.
Performance Appraisal
yearly evaluation of employees to provide feedback and coaching (lacks ongoing feedback)
Tangible returns
Cash compensation (ex. base pay, COLA)
Contributions of Performance Management For Managers
Communicate supervisors' views of performance more clearly; Managers gain insight about subordinates; Better and more timely; differentiation between good and poor performers; Employees become more competent
Performance Management Characteristics
Has strategic business considerations; driven by line manager; has ongoing feedback
Benefits
Income Protection; Allowances; Work/life focus
Contributions of Performance Management For Employees
Increase motivation to perform; Increase self-esteem; Enhance self-insight and development
Disadvantage of poor performance management system for managers
Increased turnover; Decreased motivation to perform; Unjustified demands on managers' resources; Varying and unfair standards and ratings
Strategic Purpose of Performance Management
Link individual goals with organization's goals; Communicate most crucial business strategic initiatives
Disadvantage of poor performance management system for employees
Lowered self-esteem; Employee burnout and job dissatisfaction; Damaged relationships; Use of false or misleading information
Performance Management System Integration with HR
PM provides information for: Development of training to meet organizational needs; Workforce planning; Recruitment and hiring decisions; Development of compensation systems
Reward Systems
Set of mechanisms for distributing tangible returns and intangible or relational returns as part of an employment relationship
Disadvantage of poor performance management system for organization
Wasted time and money; Unclear ratings system;Emerging biases; Increased risk of litigation
Performance Management example
feedback/conversations provided throughout the year, 1st. january, next mid review in june, and finally end of the year with feedback and personal development plans
Performance management is different than
performance appraisal