02 perfomance managememt

QUESTIONS and ANSWERS RELATED PERFORMANCE MANAGEMENT SYSTEM – PMS Question 1: Strengths and weaknesses of individual related pay? Individual related pay (IRP) is a type of reward which is used to encourage people to work better by based on their working performance According to The Institute of Employment Studies (2003), in the 1980s and 1990s, individual performancerelated pay was used with the hope to improve productivity and change in culture in the company Normally individual related pay works well based on the targets which can be measurable and have been agreed between employees and employers With IRP, the employees can see it as a goal for themselves, giving them the satisfaction and even a way to recognize their contribution and status Another point is with some companies, especially for the ones in private sector, IRP plays a very important role to retain key staff, and they not care if it motivates or not In the same way, IRP is also a way to deal with poor performance from the employees ON THE OTHER HAND, IRP may damage the job interests within the staff Based on Kahn’s argument, IRP works temporarily only, not in the long run in terms of sustaining improvements Sometimes the people work because of the promise of IRP rather than working with focus on the needs of the job According to Barry Leskin, who used to be consultant for Ernst and Young, observed that PRP schemes were “zero sum games: my gain is your loss” gzu1526742976.doc Page 1/7 Based on the research of David Guest for CIPD, half of total responses agreed that money motivated them at work while the others said it made no difference The group against money fear “favouritism and ignorance” as well as the skills of managers regarding judgment “in a fair and consistent manner” EXAMPLES: Students research and illustrate Question 2: Discuss the main mechanism used in PMS (performance management system) Objective setting  Introduce selected new courses and models allocated to teams and individuals respectively to build on key capability and professional     development Set objectives based on developing skills in the use of learning technology Develop personal skill in the design and delivery of web-based material Develop skills in writing distance learning materials Develop coaching skills to support leaner in using independent teaching with the ‘lecture’ – based system Ongoing review of objective  Review progress, and course and module projects against project plans  Review extended of personal experimentation in trying out new tutoring system and skills  Review of personal skills development in web-based teaching The developmental of personal improvement plans linked to training and development Personal development plan  To reflex the practice and research into the model of tutoring  Establish network of people inside and outside the organization to exchange ideas on distance and web-based tutorials gzu1526742976.doc Page 2/7  In-house review of tutoring and teaching system to adapt to new teaching       and learning system Training plan Web design training Review professional updating to support new careers Support career change as detailed below Career plan Review priority of teaching, research, consultancy and management of programs within individual’s future workload Pay review A competence-based organization capability review Formal appraisal with feedback  Evaluation of core skills in teaching, facilitating learning consultancy and research  Review balance of skills based upon existing and planned future profile of course and organizational activities  Review size, to develop existing staff or buy in from the outside labor market  Feedback capability profile into the decision about scope and pace of service profile by each faculty in term ability to adjust EXAMPLES Question 3: Discuss about the organization’s difficulties in increasing the level of pay to improve the reward packages of employee The Company may face difficulty in deciding whether to centralize or decentralize level of salary increment  Centralized reward This allow the company to keep a tight control of rewards decision whereby all salaries rise by the same amount so that control can be exercised in circumstances gzu1526742976.doc Page 3/7 where cost minimization strategies are predominant Moreover, this creates a strong corporate culture where equity is emphasized  Take example: P&G in Vietnam market (2009) => used centralized rewards to cut cost In case of company that has a number of products or services division that are performing different trading conditions, Discretion over the movement of pay for staff or division is required to prevent inequity among divisions However, centralized reward may prevent employee’ innovative and flexible contribution in the company For example: P&G again as illustration for such limitation in innovation and flexibility of employee  Decentralized reward Motivate employee to take initiative and thus, provide a more responsive business focus and the market Moreover, this allows company to retain talented and skilled employee by recognizing the scope to reward their creative behavior Example: Microsoft and its generous decentralized reward system The problem for this was the cost incurred Therefore, it depends on the context of the environment (in recession period, etc.) and company financial strength when choosing a centralized or decentralized reward  Degree of pay hierarchy Many organizations who are keeping the hierarchical power relationship will have distinctive salary structure for each job category For instance:  Management: a minimum-maximum scale, with progression based on individual performance gzu1526742976.doc Page 4/7  Skilled or professionally qualified staff: a minimum-maximum scale, with progression based upon organization results and individual performance  Administrative: job rates, with progression based upon company performance Therefore, the problem emerged when, for instance, the skilled or professionally qualified staff reached his maximum pay rate yet is still contributing significantly to the company success This qualified staff might not receive another pay increase because of the hierarchical power If this qualified staff is to be rewarded by another increase in pay, he would properly be promoted to the management level first  Graded salary structures The company may face difficulties when implementing a graded salary structures as follows:  Often seen as inflexible to individual contribution Emphasizes job versus person  Considered by some to be unreceptive to market pressure for certain jobs, e.g IT, accountancy and R&D specialization  Emphasizes collective approach to staff in grades rather than the individualism of employee relations  Barrier in salary structure and organization structure are often linked to non SHRM themes of flexibility and getting staff to break down barrier which impede growth orientation  Old and new paradigms Old paradigm  Cost control  Job centered view  Collective orientation gzu1526742976.doc New paradigm  Development/innovation  Decision centered view  Individual orientation Page 5/7  Clear boundaries of decision making  Clear pay activity  Standardized/transparent system  Culture of standard and system     Flexible of boundaries Dynamic, changing relativities Fluid/less transparent system Culture of ‘going beyond contract’ The two paradigms offer certain benefit that will fit in certain situation depended on the environment  Involvement in pay decision making In some cases when company decided to involve employee in pay decision making, the company may find it difficult to increase level of pay because of:  The negotiation of pay from trade union This makes it difficult for company to keep a centralized pay increase when needed  Consulted on job evaluation issues arising from job description The deviation of job evaluation caused from the consultancy may as well lead to the deviation of pay and pay increase level  Mutuality in determining performance objective  Agreed training and development objective leading to enhanced skill based pay This bias the skill based pay and pay increase from the others In some situation, the company may need to change into other base of reward The three bases of rewards are: gzu1526742976.doc Page 6/7      The job a person does The personal contribution they make within a job The level of skill and knowledge that people have within the job Influence over the achievement of performance levels Choice on pay and benefits In case of the need for cost minimization, a centralized salary increase is vital However, this might not be done because of the choice employee have over pay and benefits (make it difficult to determine what level of pay certain employee are at and how much increase in pay is reasonably needed) gzu1526742976.doc Page 7/7 ... inside and outside the organization to exchange ideas on distance and web-based tutorials gzu1526742976.doc Page 2/7  In-house review of tutoring and teaching system to adapt to new teaching ...  Management: a minimum-maximum scale, with progression based on individual performance gzu1526742976.doc Page 4/7  Skilled or professionally qualified staff: a minimum-maximum scale, with progression... skills in the use of learning technology Develop personal skill in the design and delivery of web-based material Develop skills in writing distance learning materials Develop coaching skills to