Stages Of A Typical Performance Management System Management Essay

Performance can be defined as the end result of an activity. A performance management system therefore is defined as ‘a process of establishing performance standards and evaluating performance in order to arrive at objective human resource decisions as well as to provide documentation to support those decisions.’ (Stephen P. Robbins, 2005, p. 296)

A good performance management system is essential for Interact to be able to manage the dwindling individual performance. To develop a good system Interact will need to consider the three main aspects of managing individual performance, these include: planning performance, delivering and monitoring and formal assessment and reward. These are well illustrated in the performance cycle as illustrated by figure 1 below

Figure 1

Stages of a typical performance management system Source: (Derek Torrington, p. 263)

The first key aspect of managing individual performance is the planning performance stage. This is where a manager at interact sits down with his subject and they collaboratively set individual objectives originally obtained from team objectives and the agreed job description. These objectives are designed in a way that they also offer potential development as well as fulfilling the general organisations general objectives. They should also include measures of how they can be assessed.

One common approach managers use in setting these objectives is with the ‘SMART’ acronym. This suggests that the objectives set should be Specific, Measurable, Appropriate, Relevant and Timed. A good example of a good objective for an employee working in the component development department could be:

To develop a new mobile phone component by March 2010 (started in January 2010)

It is important that managers do not forget to plan for the support, development and resources necessary for the employee to be able to accomplish the objectives.

The second key aspect is the delivering and monitoring performance stage. As the interact employee sets about to achieve the performance agreed, the manger should ensure that he is available at all times so that the employee can consult him/her at any moment when needed. There may be some unpredicted hindrances towards the achievement of performance and in some instances targets may have to be revised. Ongoing coaching is important whereby the manager can guide the employees through discussion and providing constructive feedback. Continuous informal reviews held between the employee and his manager should be carried out so as to ensure that work is going as agreed and whether the agreed performance will be attainable by the agreed dates. Objectives signed off as complete and recognition of ‘work done’ so far help to act as motivation for the employee in the future for other objectives yet to be completed.

The last key aspect of the performance cycle is the formal assessment and reward stage. This stage involves regular reviews of the development of the objectives and to motivate the employee. Annual reviews are also necessary in this stage whereby what has been achieved is compared with what had been set to be achieved which may affect pay and salary increments.

Interact managers should take note that employees see reviews as fair only if the targets set are achievable and judgements were seen to be consistent throughout the organisation. Different styles of appraising employees could be adopted in order to make the best assessment but a popular and widely used approach is the problem solving style which is one of the styles developed by the American psychologist, Norman Maier. This approach suggests that ‘The appraiser starts the interview by encouraging the employee to identify and discuss problem areas and then consider solutions. The employee therefore plays an active part in analysing problems and suggesting solutions, and then evaluation of performance emergence from the discussion at the appraisal interview, instead of being imposed by the appraiser upon the employee.’ (Anderson, 1993, p. 102). However, it should be taken note that this style works best if the employees are ready for it and the mangers are willing to behave in this way which is not always the case.

After the reviews have been conducted and achievement of tasks has been high, reward is necessary. Most management systems include pay in the reward package but ongoing research has shown that element of pay had very little effect in the motivation of employees. Other forms of reward other than monetary such as promotion and offering of individual development opportunities are found to be more motivating to employees.

In order for the successful implementation of a performance management system, line managers who are closer to the employees need to be included in the Human Resource team when designing the system. Training of the line managers is essential before and during the introduction of the system.

Task 2

Learning can be defined as the process of acquiring knowledge.

Learning and development is an essential part in keeping the performance of Interact’s employees up to standard. Currently, there have been issues and complains from the employees about the quality of training being offered, and the lack of enough training to keep the component developers up to date with emerging technologies.

This is a serious problem for interact being the fact that it is operating in an industry that requires a high degree of innovation and creativity. It indicates the need for an effective people development strategy.

A good approach that could be used to establish an effective people development strategy would be the ‘systematic training cycle’. This cycle includes for steps that are; identifying training needs, designing development activity, carrying out development and evaluating development. This can be illustrated by the diagram below.


Business strategy

People development strategy

Figure 2

A systematic model of learning and training Source: (Derek Torrington, p. 391)

Considering figure 2, the first step in the model is identifying training and learning needs.

Before any activity can commence, interact managers should take note that identifying these needs should not be the sole role of the human resource team but should be a process that involves the employees too. Employees about to receive training should not be considered as subjects but as participants of the scheme.

Interact managers should also take note that modern day effective training requires not only a focus on development of technical skills alone but also personal skills, attitudes and self-management therefore broadening the needs scope.

One approach that interact managers could use to identify the training and learning needs is the problem centred approach. This approach analyses whether there are any performance problems and analyses whether they are caused by lack of skill and if so, which. The gap between expected performance and actual performance is the one that helps to bring about the training need.

For example, an identified problem with interact is that the component developers are not up to date with new technological development therefore the training need would be to continuously keep the developers up to date.

After training needs have been identified, the next step will be designing the development activity. There various methods of learning and development that Interact managers could use such as; education and training courses (off job), manager coaching and teaching, self development groups and open and distance learning. (On job).

The next step is carrying out the development activity.

For education and training courses, Interact managers could use the consultancy courses. They could range from one day to several weeks in some cases. These have the advantage that they enable employees from various organisations to meet and share their experiences. In order to be very effective, they should concentrate on specific skills of knowledge, such as being introduced to new technological developments. Management should take note that these courses are usually expensive despite the fact that they are of short duration.

There is a big challenge that Interact managers should be prepared to face and that is the ensuring of the transfer of what the employees have learnt back to the organisation. To counteract this problem, managers could set goals for implementing new skills once the employees return from training.

In case the Interact management decide to use on job training methods take manager coaching and teaching as an example, the line manager will act as a mentor or coach for the trainees involved. He will provide feedback, counselling, encouragement discussion and sincere feedback.

Management should however take note that not all line managers can provide effective coaching, as it requires good interpersonal skills and commitment from the manager to accept the coaching role.

Interact management could also support the use of self development groups whereby informal groups formed by employees come together and discuss organisational issues, personal development and individual work problems. The group should however be headed by an experienced leader who plays the role of a facilitator and to some extent, a source of information. This group leader could drop off as the group matures. Such a method of learning and development requires a high level of commitment from the group members and a close follow up on the side of management.

The final step in the learning cycle is the evaluating development stage. While evaluating development, changes in skills, knowledge, behaviour and attitudes need to be considered. However, research has proved that it is actually very difficult to asses some aspects of learning or training that have been carried out such as changes in attitudes and behaviour. A post course questionnaire could be issued out to the trainees but this usually tends to evaluate the course and not the training.

Evaluation could also be carried out by setting up goals basing on what the individuals have learnt during training and the extent to which the employees meet these goals would indicate how effective the training had been.

It is recommended that managers should keep on evaluating the trainees continuously from the beginning as they attend the training courses and not to pin the evaluation process at the end of the course.

Task 3

Leadership can be defined as the ‘Process in which an individual influences other group members towards the attainment of group or organisational goals.’ (Shackleton, 1995, p. 2)

There is a close link between leadership and motivation and performance implying that the leadership style being used may have either positive or negative impacts on these. Due to the recession, Interact adopted a rather autocratic approach and have become more task focused.

An autocratic leader is ‘a leader who tends to centralise authority, dictate work methods, make unilateral decisions and limit employee participation.’ (Stephen p. Robbins, 2005, p. 593) The advantage of such a style is that it leads to quick decision making and work getting done on time.

However, there are various negative impacts Interact could face as result of applying such a leadership style.

To start with, according to Vroom’s expectancy theory which says that ‘An individual tends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.’ (Stephen p. Robbins, 2005, p. 405), we can see that expectancy has an impact on motivation. Therefore not expecting employees to perform unless they are directed to will only cause them to behave in that way leading to demotivation and poor performance.

Also using Maslow’s hierarchy of needs, the need for affiliation could be a motivational factor. Therefore not involving employees in the decision making process and centralising authority only makes the employees feel alienated and thus end up feeling demotivated.

The autocratic style of leadership also fails to recognise that social needs are a motivational factor for employees. Maslow recognised the need for affiliation as an important attribute in human motivation therefore making decisions or planning activities while excluding those who are going to be affected may demotivate them.

Autocratic leadership also makes the employees feel that the organisation does not trust them enough to make wise decisions for the good of the organisation. This demotivates them and makes them feel like they are not a part of the organisation or not responsible enough.

As a result of being very task oriented, such as style does not have much concern for the needs of their subordinates. This is clearly indicated by the lack of a sound human resource function and the fact that the Interact management has so far refused to meet with the group of ’employee representatives’ who are trying to voice employee concerns. This has led to feelings of resentment, alienation and a drop in performance levels.

In conclusion, the autocratic style of leadership has a rather more negative impact than positive effects, but this is not to say that Interact should not apply it, rather they could blend it in with other styles of leadership. Using the managerial grid designed by Blake and Mouton,


High concern for people

Low concern for production

Country Club management

High concern for people

High concern for production

Team management

Low concern for people

Low concern for production

Impoverished management

Low concern for people

High concern for production

Authority-compliance management High


Low Production High

The managerial grid Source: (Derek Torrington, p. 304)

Most managers agree that the best leadership style would be the team management which has both high concerns for people and production but there is a new approach that suggests that the best style is to use all these four styles together basing on different times and different situations.

Task 4

The complaints voiced by employees over the need to work harder and longer to keep their jobs and increased levels of stress are a sign that the quality of the working life at Interact is deteriorating. Work-life balance is very important as it keeps the employees happy and contented with their jobs therefore reducing absenteeism and turnover.

There are a number of practices that management at Interact could implement so as to improve the situation.

To begin with, offering the employees flexible working hours would greatly help employees who need more time outside the job.

Allowing female workers to have their maternity leaves also enables to keep the employees happy with their current jobs.

The Interact management can also train their line managers to deal with employee stress. The line managers should encourage the employees to talk and voice out what is truly getting them stressed up.

An increased level of stress at work is a total wake up call that Interact needs to change its style of leadership and control. Not allowing employees to freely raise their voices over the different issues in the organisation and refusing to recognise their representative group only makes them feel unappreciated and demoralised.

Interact could also reorganise their working practices such that the workers could get work done without having to spend extra long hours to work while maintaining the same quality of performance.

The amount of days employees can get in their leaves should be adequate giving employees enough time to rest and relax so that they can return to work revitalised.

For those workers who may not be able to get to work but and yet their jobs do not demand their physical presence at the premises, interact could offer them alternatives of working at home. This will help to boost performance while at the same time saving valuable time lost when the work is not done at all.

In case workers are having to work overtime, Interact should devise a payment scheme that covers these extra hours in a manner that is of mutual benefit with the employees.

Interact could even go to the extent of ensuring that maternity pay is reasonable and comfortable for the employees. This will make them return to work much more happily and boost their attachment to the company.

For those in areas where the work demands them to do the same routine job everyday, Interact management could introduce rotation where other employees doing other routine work could be set up to be exchanging activities so as to prevent them from getting bored.

However there are some limitations that Interact should take note about work-life balance policies. For example, some policies such as maternity pay only target the female employees therefore bringing about a feeling of neglect with the other employees. Another problem is the fact that some policies may actually be put in place and yet employees may not take them up and use them.

Task 5

Absenteeism can be defined as the

To tackle this problem, Managers at Interact need to set up a procedure to solve the absenteeism problem. The process could involve the following steps;

Identify the absence problem

Locate the absence problem

Identify and prioritize the cause of absence

Evaluate the current control method

Design the absence control program

Implement the absence control program

Monitor the effectiveness of the program

The first step of solving the absenteeism problem is assessing it. Interact could do this by collecting statistical data about thee current absence levels. This can be done by gathering information on how many people did not come in to work for a certain period of time.

After the pattern has been identified, the next step is to locate the absence problem. This is done by using collected data to find out which specific departments had the highest levels of absentees for the period.

The next step is to identify the cause of absence in the departments selected. An autocratic leadership style of the line managers in Interact, longer working hours, low levels of responsibility and decision making could result into dissatisfaction with the job situation therefore leading to a rise in absence levels.

Evaluating the current absence control method is what follows after the causes of absence have been identified. During evaluation, Interact should be able to see the weaknesses of the current control program and why it is failing to work effectively.

After evaluation, Interact should design a new control program that tackles the problem. There are a few recommendations of measures that could be put in place to help reduce the problem,

First of all, I would recommend to Interact that they should try and maintain continuous contact with the employees who are absent from work. This is known to greatly reduce the length of absence and shows the employee that the organisation in concerned about the well being of its people. One visit a month by the line manager of the employee could be effective.

Another useful activity that interact could do to manage absence is to include attendance levels in the performance review at the end of the year. Having high levels of absence during the year would be considered as underperformance in the review.

I would also recommend that the line managers undergo training so as to ensure that the absence procedures are effectively carried out. Proper training on how to handle employees who are frequently absent could greatly reduce the absence levels.

A deep understanding of the causes of absence would enable Interact to be able to tackle the absenteeism problem. Known causes of absenteeism at Interact include, employees working longer hours and increased levels of stress. When trying to identify the problems, management should not only consider what the absentees have filed as the reason for their absence as research has shown that they tend to write excuses that appear valid to the organisation. Interact should build a culture of trust with its employees such that they can get them to explain the real causes of absence and thus they can respond to them effectively.

The last step after the absence control program has been designed is to implement it while continuously monitoring it by collecting statistical data to observe whether the absence levels are falling or not. If it is not effective then Interact have to find out why, make the necessary corrections and continue with it

Task 6

Employee turnover is the rate at which employees voluntarily leave their jobs. At interact, the level of employee turnover has been relatively high. Collecting information on staff turnover is quite difficult to collect though one best approach could be by using exit interviews. However, there are some major reasons why staff could be leaving interact.

Push factors

One reason why Interact employees could be leaving their jobs is because of Push factors. This concept suggests poor working conditions, people development strategy, dissatisfaction with company policies, negative effects of autocratic leadership style, job insecurity among others to be the cause of forcing people to leave the organisation. In other words, Interact is “pushing” away its employees by failing to provide a good organisational and working environment to keep the employees satisfied. Interact could control this cause by making the organisation more employee friendly.

Another reason why employees could be leaving Interact is because of pull factors. This concept implies that rival employers in the telephone component manufacturing industry are “pulling” Interact employees towards them. This could be because they are paying higher salaries, offering better benefit packages, training opportunities or they have more attractive working environments. The best way Interact could reduce turnover caused by this way is by first of all analysing what other organisations in the industry are offering that is making them more attractive and therefore making sure they can level up. Another approach is by identifying unique selling points offered by Interact that other organisations don’t have and communicating them to staff.

Employees could also be leaving Interact as a result of functional turnover. This is a situation where employee resignations are accepted by both Interact and the employee involved. This could be because of failure of the employee to conform with the organisational culture or as a result of continuous poor performance. The best way to handle turnover caused in this way is by improving the recruitment process so as to avoid such people in the first place.

Outside factors could also be making employees leave Interact. These are reasons that have nothing to do with the job. They could be leaving because their partners are leaving the city, personal desire for self employment. In this situation, there is nothing much that Interact could do to stop these kinds of employees from leaving the organisation as it is beyond their control.

The rate of employee turnover at Interact could be greatly reduced by putting in place certain strategies so as to manage the turnover rates.

Firstly one tool that Interact could use is pay. Research has shown that organisations offering higher salaries appear more attractive than those with less. However, pay alone may not be enough to keep the employees from leaving. It should be combined with other benefits such as holidays, healthcare offers and staff discounts. The best approach in offering such benefits is by letting the employees pick benefits that they prefer as different employees may be interested in different packages.

Another tool that Interact could use to help reduce turnover rates is putting in place family friendly Human Resource practices. Considering the fact that many people leave work due to family and personal reasons giving employees more time to spend with their families through holiday packages, flexible working hours and a well paid maternity leave may greatly help to reduce the rates.

Improving the quality of line management may also help to reduce the turnover rates as these managers play a critical role in employee relations. To ensure that the selected line managers are effective, they should be selected basing on their supervisory capabilities, undergo training and appraised on their supervisory skills.

Finally induction is also known to help in reducing early staff turnover rates as it helps to fit the employee into the organisation and defines his/her role in it. Organisational induction could be done by the Human resource department and may include a presentation on health and safety regulations and fire evacuation procedures. This type of induction could last a few days. The other type of induction is the job-based induction. This usually takes longer and is mostly carried out by the immediate line manager and in the background, fellow employees and includes activities like getting to know the organisation culture, how work is done and what is expected of him/her.

Managing employee expectations from the beginning could also play a crucial role in reducing the turnover rates. This is done by letting the employee know exactly what to expect from his job right at the start of his/her career so that they are more prepared when they face the challenges. Challenges could include time pressures etc

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