Group of company, which is world’s largest food service company, providing food, and beverages to its clients in over 90 countries. To determine how employees can help to achieve the goals of Compass has two important activities included in it. First it has to do with determining the performance and other with the process of evaluation. (Becker, Gerhart (1996) The impact of human resource management of organization performance)
Employees are performing well when they are productive and productivity implies both concern for effectiveness and efficiency, effectiveness refers to goal accomplishment. However it does not speak of the costs incurred in reaching the goal. That is where efficiency comes in. Efficiency evaluates the ratio of inputs consumed to outputs achieved. The greater the output for a given input, the greater the efficiency. In addition to productivity as measured in terms of effectiveness and efficiency, performance also includes personnel data such as measures of turnover, absences, and tardiness.
A good employee is one who not only performs well in terms of productivity but also minimizes problems for the Compass Group by being to work on time, by not missing days, and by minimizing the number of work-related accidents. (Aswathappa K. , Managing and Performance Management) Appraisals are judgments of the characteristics, traits and performance of others. On the basis of these judgments we assess the worth or value of others and identify what is good or bad. In industry, performance appraisal is a systematic evaluation of employees by supervisors.
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Employees also wish to know their position in the Compass Group. Appraisals are essential for making many administrative decisions: selection, training, promotion, transfer, wage and salary administration etc. Besides they aid in personnel research. Performance Management thus is a systematic and objective way of judging the relative worth of ability of an employee in performing his task. Performance appraisal helps to identify those who are performing their assigned tasks well and those who are not and the reasons for such performance. (Purecell J., Boxall P. ,(2003) Strategy and Human Resource Performance Management). Find P ay for performance examples
Employee Performance Management Effect on Compass Group
The individual level of skill is measured against a performance standard established by the Compass Group. An effective managent is one who are able to assign jobs to the correct personnel which requires perfect analysis. Performance appraisal has a number of specific objectives are:
- To review past performance
- To assess training needs
- To help develop individuals
- To audit the skills within an Compass Group
- To set targets for future performance
- To identify potential for promotion.
Some employees may believe that performance appraisal is simply used by the Compass Group to apportion blame and to provide a basis for disciplinary action. They see it as a stick that management has introduced with which to beat people. Under such situations a well thought out performance appraisal is doomed to failure. Even if the more positive objectives are built into the system, problems may still arise because they may not all be achievable and they may cause conflict.
An appraise is less likely to be open about any shortcomings in past performance during a process that affects pay or promotion prospects, or which might be perceived as leading to disciplinary action. It is therefore important that performance appraisal should have specific objective. Not only should the objectives be clear but also they should form part of the Compass Group’s whole strategy. Thus incorporating objectives into the appraisal system may highlight areas for improvement, new directions and opportunities. (McAfee, Champagne (1993) Performance Management: a strategy for improving employee performance and productivity)
HRM Responses for Performance
The main objective of company’s mission is to help the employee to overcome his weaknesses and to reinforce his strengths. Company is well aware that with the stability of the personnel working in the company, there will be both vertical and horizontal growth of the company. In this sense it is a developmental process of employees where the supervisor and the subordinate discuss the past performance with a view to help the subordinate to improve and become more effective in future. Appraisal reports serve as spring board for discussion.
One of the fallout effects of this dyadic interaction is the identification of training needs. Counseling provides an opportunity to the supervisor to give feedback to the subordinate on the performance and performance-related behavior. Feedback can be an effective tool provided: (Cawley, Keeping, Levy (1998) Participation in the performance appraisal process and employee reactions)
- Both negative and positive feedbacks are communicated.
- It is not just an opinion but is backed by data. In other words it should be descriptive and not evaluative.
- It focuses on behavior rather than on the individual.
- It is timely. Delayed feedback is neither helpful nor effective. On the other hand, it might be seen as criticism which may further deteriorate the relationship. As time passes, details are forgotten and recall may be jeopardized by distortions. (Kluger, DeNisi (1998)
The effects of feedback interventions on performance) Several conditions for effective counseling are identified.
The Following are some of the important ones:
- A climate of openness and trust is necessary. When people are tense and hostile, attempts should be made to counsel and help rather than be critical.
- The counselor should be tactful and helpful rather than critical and fault finding.
- The subordinate should feel comfortable to participate without any hesitation or inhibition.
- The focus should be on the work-related problems and difficulties rather than personality or individuals likes, dislikes or idiosyncrasies.
- It should be devoid of all discussions on salary, reward and punishment. Any discussion on compensation changes the focus from performance improvement to the relationship between performance and reward.
Since advice is a difficult activity, the supervisor should be specially trained in social competence to handle these aspects of his job. The skill required to do well in these situations is often referred to as the use of non-directive technique. It is a methodology of generating information and using this information to help employees. A sample of non-directive technique could be to start the interview by asking as to how he is doing. This provides an environment for the subordinate to talk about his part of the story first.
The essential feature is to provide an employee an opportunity to talk and share his experience which the supervisor should be able to listen and then process and provide feedback to him. (Kerr (2000) On the folly of rewarding) Supervisors in Compass Group are hesitant to initiate performance counseling sessions because the subordinates may raise uneasy questions for which they may not have answers. Or they may question their judgments and decisions which may lead to argument, debate and misunderstanding. That is why there is a need to train supervisors in the techniques of counseling sessions. (Williams (2002) Managing Employee Performance)
One major outcome of performance counseling is identification of the potential of the employee’s skills and abilities not known and utilized by the Compass Group. Potential appraisal is different from performance appraisal as the latter limits evaluation to what the subordinate has done on the job or his performance whereas the former on the other hand, seeks to examine what the subordinate can do. The distinct advantage of a thoroughly carried out potential appraisal are:The Compass Group s are able to identify individuals who can take higher responsibilities. It also conveys the message that people are not working in dead-end jobs in the Compass Group. (Marsden, Richardson (1994) Performing for Pay? The effects of merit pay on motivation in a public service)
Compass Group Vision
One of the important objectives of the company is to expand its business, should be cost effective and also keeping the employees at a satisfied level. Potential appraisal is to help employees to move upwards in the Compass Group. People do not like to work on dead end jobs. Hence, a career ladder with clearly defined steps becomes an integral component of human resources management.
Most HRM practitioners favor restructuring of a job to provide reasonably long and orderly career growth. Career path basically refers to opportunities for growth in the Compass Group. Availability’ of such opportunities has tremendous motivational value. It also helps in designing salary structures, identifying training needs and developing second line in command. (Baron, RA (1988) Negative effects of destructive criticism)
Those where designations changes to a higher level position, job remaining more or less the same. A good example of this is found in growth from junior level to supervisory level and then to management level. Career path in such situations means a change in status, better salary and benefits and perhaps less load and better working condition.
Those where changes in position bring about changes in job along with increased salary, status and better benefits and working conditions. In many engineering Compass Group s, an employee may grow in the same line with increased responsibilities or may move to other projects with different job demands. (Atkinson, Waterhouse. , Wefls (1997) A stakeholder approach to strategic performance measurement) One important mechanism to identify the promo ability of employees is Assessment Centre. It is a method which uses a variety of technique to evaluate employees for manpower requirements in the Compass Group. It uses situational tests including exercises requiring participants to prepare written reports after analyzing management problem, make oral presentations, answer mail or memo in in-basket situation and a whole lot of situational decision making exercises.
Assessors observe the behavior and make independent reports of their evaluation of the strengths and weaknesses of the attributes. (Ogbonna, Harris (2000) Leadership style, organizational culture arid performance: empirical evidence from UK companies)
Goals for the Future Business
Conducting performance management system on employee’s should be more than a simple checklist of Do’s and Don’ts. Performance evaluation should serve as a vital component, one that is of interest to both the Compass Group and the employee.
From the Compass Group al perspective, sound performance appraisals can ensure that correct work is being done, work that assists in meeting department goals simply put. Each employee’s work should support the activities needed to action his or her supervisor’s performance objectives. This should ultimately continue up the hierarchy, with all efforts supporting corporate strategic goals. From the employee perspective, properly operating performance appraisal systems provide a clear communication of work expectations.
Knowing what is expected is a first step in helping one to cope better with the stress usually associated with a lack of clear direction. Secondly, properly designed performance appraisals should also serve as a means of assisting an employee’s personal development. (Marchington, Grugulis (2000) Best practice human resource management: Perfect opportunity of dangerous illusion) To make effective performance appraisals a reality, four criteria need to be present. These are:
- Employees should be actively involved in the evaluation and development process.
- Supervisors need to enter performance appraisals with a constructive and helpful attitude.
- Realistic goals must be mutually set.
- Supervisors must be aware and have knowledge of the employee’s job and performance.
All companies are working as per the procedure laid down in the industry. When a deep study is made about the performance management system in a company, lot of discrepancies are noticed. The process applied needs improvement and the points mentioned needs attention:
The performance process begins with the establishment of performance standards. These should have evolved out of job analysis and the job description. These performance standards should also be clear and objective enough to be understood and measured. The expectations a manager has in term of work performance by the subordinates must be clear enough in their minds so that the management would be able to at some later date, to communicate these expectations to their subordinates and appraise their performance against these previously established standards. (Flippo Edwin B. , (1994) “Personnel Management”)
Once performance standards are established, it is necessary to communicate these expectations. It should not be part of the employees’ job to guess what is expected of them. The problem is compounded when these standards are not communicated to the employees. It is important to note that communication is a two-way street. Mere transference of information from the top to the subordinate regarding expectations is not communication. Communication only takes place when the transference of information has taken place and has been received and understood by subordinate. Therefore feedback is necessary. Hence the information communicated by the management has been received and understood in the way it was intended.
The Third step in this process is measurement of performance. To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure.
The fourth step in the performance process is the comparison of actual performance with standards. The attempt in this step is to note deviations between standard performance and actual performance. One of the most challenging tasks facing management is to present an accurate appraisal to the subordinate and then have the subordinate accept the appraisal in a constructive manner. The impression that subordinates receive about their assessment has a strong impact on their self- esteem and, very important, on their subsequent performance.
The final step in the performance managent is the initiation of corrective action when necessary. Corrective action can be of two types; one is immediate and deals predominantly with symptoms. The other is basic and delves into causes.
Immediate corrective action is often described as putting out fires, where as basic corrective action gets to the source of deviation and seeks to adjust the differences permanently. Immediate action corrects something right now and gets things back on track. Basic action asks how and why performance deviated. There will be innumerable benefits to the company once the system is properly followed. The beneficiary is the company, the management and the employees. The company’s alignment with its mission, vision and goals are achievable. (Kaplan, P. L. , Human Resources and Performance Management)
For the Compass Group:
- Improved performance throughout the Compass Group due to more effective communication of the Compass Group’s objectives and values, increased sense of cohesiveness and loyalty.
- Improvement in the tasks performed by each member of the staff.
- Identification of ideas for improvement.
- Expectations and long-term plans can be developed.
- Training and development needs can be identified more clearly.
- People with potential can be identified and career development plans can be formulated for future staff requirements.
For the management:
- The opportunity to develop an overview of individual jobs and departments.
- Identification of ideas for improvements.
- The opportunity to clarify expectations of the contribution the manager expects from teams and individuals.
- The opportunity to re-prioritize targets.
- A means of forming a more productive relationship with staff based on mutual trust and understanding.
Performance Management System is concerned with setting objectives for individuals, monitoring progress towards these objectives on a regular basis in our atmosphere of trust and cooperation between the management and the employee.
Well designed performance systems in benefits the Compass Group, managers and individuals in different ways and need to fulfill certain key objectives if they are to be successful. Performance systems should be designed to focus employees on both their short and long-term objectives and career goals. It is also important to be aware of the problems associated with the system.
- Williams (2002) Managing Employee Performance Thompson Learning
- Atkinson, Waterhouse. , Wefls (1997) A stakeholder approach to strategic performance measurement Sloan Management Review Spring pp 25-37
- Baron, RA (1988) Negative effects of destructive criticism Journal of Applied psychology 73, pp 199 — 207
- Becker, Gerhart (1996) The impact of human resource management of organization performance Academy of Management Journal 39, pp 779-101
- Cawley, Keeping, Levy (1998) Participation in the performance appraisal process and employee reactions Journal of applied Psychology 83(4) pp 615-33
- Kerr (2000) On the folly of rewarding A, while hoping for B Academy of Management Executive 9(1) pp 7—14
- Kluger, DeNisi (1998) The effects of feedback interventions on performance Psychological Bulletin 119(2) pp 25484
- McAfee, Champagne (1993) Performance Management: a strategy for improving employee performance and productivity Journal of Managerial Psychology 8(5) pp 2442
- Marchington, Grugulis (2000) Best practice human resource management: Perfect opportunity of dangerous illusion? International Journal of HRM 11(6) pp 1104-24
- Marsden, Richardson (1994) Performing for Pay? The effects of merit pay on motivation in a public service British Journal of Industrial Relations 32 (2) pp 243-61
- Ogbonna, Harris (2000) Leadership style, organizational culture arid performance: empirical evidence from UK companies International Journal of HRM 11(4) pp 766-88
- Kaplan , P. L. , Human Resources and Performance Management, McGraw-Hill, New York,1997
- Flippo Edwin B. ,(1994) “Personnel Management” New York, McGraw-Hill
- Purecell J. ,Boxall P. ,(2003) Strategy and Human Resource Performance Management, Plagrave, Macmillan, New York.
- Aswathappa K. , Managing and Performance Management, Tata McGraw-Hill Publishing Company Ltd. , New Delhi,1997
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