Performance Appraisal Case Study

1219 Words3 Pages
bulb-icon

Recommended: Research instrument of effectiveness of performance appraisal

What is Performance Management and how can Performance Appraisal and Pay for Performance support it? Performance management (PM) is an organizational process in which managers and their employees engage is dialogue and collaboration to establish the goals and objectives of their positions, discuss performance and ways in which it can be improved, implement training plans, and reward and reinforce superior performance/behaviors (MSGExperts, n.d.). PM is not limited to one individual activity, such as counseling; PM is the sum total of all of all the actions taken to help guide and ensure that employees are exhibiting those individual behaviors (Milkovich, Newman, & Gerhart, 2016, p. 314) that align with business objectives and are going …show more content…

One element of the performance management system is the performance appraisal. A performance appraisal is a formal process in which managers evaluate an employee’s behavior and performance based upon predetermined goals, behavioral standards, or performance metrics (Milkovich, et al., p. 387). This appraisal can be utilized for a number of HR purposes, to include pay-for-performance compensation. The performance appraisal identifies how well an employee has performed in comparison to the standard/objectives of their position, and (based upon a pre-established pay-for-performance plan) determines what amount of variable pay the employee will be awarded. All of these elements, from the standards/metrics utilized during the appraisal, the compensation awarded, and the PM itself, are used in conjunction with one another to help motivate …show more content…

For employees, variable performance-based compensation is going to reward those employees who can meet and/or exceed the goals and performance standards set out for their positions. It is a tangible motivator to behave in ways that will help an organization be successful. It places autonomy in the hands of employees—they have the ability to control the compensation they receive based on their own actions. When employees reach and/or exceed the performance metrics of their position, this is ultimately going to contribute to the success of an organization (Milkovich, et al., p. 331). If an organization aligns the performance metrics of individual positions with their business strategy, they will be actively motivating employees to do what the business needs to be profitable. This type of compensation is also going the organization to help create a workforce that is willing to work hard and excel. Employees who prefer not to have their compensation tied to performance and wish to receive static compensation regardless of how well they do, will tend to leave an organization utilizing this compensation strategy (Milkovich, et al., p. 328). So not only will organizations improve the quality/quantity of the work performed by their current employees, but it will also help them to create a more performance-driven workforce all

Show More
Related

  • Twenty1 Wireless Case Study

    1264 Words  | 3 Pages

    In 2012, Forbes contributor Sebastian Bailey professed, “Bad performance management costs a lot and delivers very little. In fact, when it goes wrong, he tells us, it dilutes the effect of every other people investment. Yet, when done right, the impact is significant (Bailey, 2012). We learn from Aguinis (2013), that there are dangers associated with a poorly implemented performance management systems. These include; increased turnover, wasted time and money, decreased motivation to perform, as well as damaged relationships and lowered self-esteem (p.9). The first purpose of performance management systems is to help top management achieve strategic business objectives (Aguinis, 2013). This reinforces behaviors that are consistent with the company’s cultures and goals and also plays an important role on the commitment, engagement and loyalty of company employees. Employees who have clear expectations, can align their values and vision with the company’s, understand what is expected of them and what they earn in return will have higher satisfaction and longevity within an organization.

    Read More

  • Why Pay for Performance Only Works in Theory

    1977 Words  | 4 Pages

    Pay for performance is a motivation concept in human resources, in which employees receive compensation for their work based on the level of reaching certain targets (individually or with their team, department or company). The term is often referred to when one is addressing the topic of variable pay based on performances. Although not generally recognised, the term pay for performance should, to my opinion, include as well, aside of variable pay, fixed pay and intrinsic rewards.

    Read More

  • City Courier Case Study

    816 Words  | 2 Pages

    The performance assessment and appraisal forms are crucial within the performance management system (Aguinis, 2014). However, the appraisal form within the case study provided is designed for the supervisor’s use thus missing one vital factor throughout the entire process, employee participation. Thus, questioning the validity and reliability of the process. This is especially concerning as the bottom 10 per cent of employees are being fired and the top 20 per cent are being rewarded with $5,000.00 based on what their supervisor records on the form without consultation with employees. Thus, supervisors may not provide accurate scores as they do not have to justify their responses (Aguinis,

    Read More

  • Marks and Spencer's Definition of Performance Management

    910 Words  | 2 Pages

    Marks and Spencer's Definition of Performance Management Performance management provides Marks and Spencers with needed information on their employees. The information helps Marks and Spencers develop the skills of the employees based on the information collected at the appraisal, it helps recognise when training is needed. Performance management helps M&S by improving their service by having able workers that work to their full abilityand by improving the relationship between workers and the company. Here is Marks and Spencer's definition of performance management: Performance management is a joint process that involves both the supervisor and the employee, who identify common goals, which are linked to the goals of the organisation. This process results with the establishment of written performance exceptions later used as measures for feed back and performance evaluation.’

    Read More

  • Performance Evaluation Reflection Paper

    1033 Words  | 3 Pages

    Based on your view of the objectives of performance evaluation, evaluate the perspectives about performance appraisal presented by the managers.

    Read More

  • Walmart Performance Assessment

    1568 Words  | 4 Pages

    There is an array of key components and factors involved in making an organization a successful business. One of those elements consists on evaluating employee’s performance; this sole component is critical in determining how effective is the organization’s productivity and which are the necessary steps to ensure proper functioning. “The performance appraisal may be one of the few times during the year where an employee and the reviewer, typically the employee's supervisor, can sit down and have a lengthy face-to-face discussion about all aspects of the job” (Joseph, 2016). Employees’ performance assessment serves as an instrument to gather important information as to which areas of the job description are being performed according to standards

    Read More

  • Are The Pervasive Characteristics Of Organisational Performance Management Essential For Ensuring Organisational Effectiveness?

    1279 Words  | 3 Pages

    Performance management aims to manage and improve individual performance with a vision to improving performance across the entire business. [Walter. M, 1995] defines performance management as the process of ‘Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organisation’. It is very important to direct and support employees to work efficiently, and this can only be successful if a well-structured performance management system is put in place. But, nonetheless some organisations don’t get it

    Read More

  • Performance-based Compensation - Pay for Performance

    2553 Words  | 6 Pages

    Corporations are looking for new ways to improve employee performance as well as remain competitive. Pay for performance is one method some businesses are utilizing to improve employee performance. Performance-based compensation exists when compensation is tied directly to that portion of an individual’s performance that can be effectively measured. There are a number of ways in which this may be accomplished and a number of examples as well how it is applied. One of the oldest examples is taken from the ancient Egyptians, where slaves working in the pyramids were given bread for superior performance. Payment of commission for sales production is one of the methods used today.

    Read More

  • Importance Of Biases In Performance Appraisal

    900 Words  | 2 Pages

    Performance appraisal is perceived by most as a tool to reward or penalize employees for their good or bad work respectively by the end of a year. This notion is a challenge in itself to deal with. The whole exercise becomes dull for both supervisors and their subordinates and they tend to look at it as an additional responsibility which they have to finish. In the end, there is little or no value addition for either the employee or the organization. There are, however, better ways of looking at and conducting performance appraisals. It can give much needed feedback to both performers and laggards to improve upon and if done properly can even boost their motivation. More importantly, they provide a chance to employees to have a say in their goal setting and thus aligning it with the departmental and organizational goals. Also, the process itself has a value in team making.

    Read More

  • Woolworth Performance Management

    761 Words  | 2 Pages

    Performance management is a management tool used to value, monitor and measure a company’s strategies that ensure the efficiency and effectiveness of its product delivery. This management tool does not focus on the organisation and on its employees as well as stakeholders. It is a continuous process that entails that managers make sure that organisational and employee values are corresponding (Aguinis, 2005,p.1/2-1/5). Performance Management brings about the competencies in the employees, increases self-esteem by giving feedback to employees, there is a low number of lawsuits because it helps understand the company better (eThekwini Municipality, 2008,p.10-11). According to Pride, Hughes and Kapoor (2011, p.288) performance management creates motivation for employees; one theory of motivation is of Expectancy, which stipulates that employees satisfaction is driven by expectations of what an organisation will offer in return.

    Read More

  • Evolution of Reward Systems

    876 Words  | 2 Pages

    Employee compensation and reward systems have undergone a couple of paradigm shifts since inception. Reward systems were traditionally compensation based and focused on the individual or the position (Beam 1995). After a recession in the early 1980's, employers turned to performance based models in an attempt to save money while still rewarding top performers (Applebaum & Shapiro, 1992). Today, the most successful organizations are using a total reward model, a hybrid of the performance based model combined with strategic human resource management planning to create reward systems that both benefit the employee and help organizations realize their operational goals (Chen & Hsieh, 2006).

    Read More

  • What Is Merit Pay On Employees

    724 Words  | 2 Pages

    Many employees lose motivation if not considered deserving of merit rewards, which directly affect performance. Employee’s say the criteria used to measure performance is highly subjective and unfair. Consequently, favoritism when rating employees can create major problems within an organization. This makes other employees unmotivated; they feel insignificant, causing low morale, because no matter how high they perform, they never meet the standards. Unmotivated employees produce less and do not substantially contribute to the organization. The inconsistencies with the appraisal system used for merit pay causes a higher degree of employee conflict, which directly affects productivity. Often personal goals may become more important than team goals, which is not beneficial to the company and affects team unity. Developing an accurate performance appraisal system where assessors are properly trained and objectives are clearly spelled out and discussed with employees can alleviate many

    Read More

  • Performance Management Essay

    1020 Words  | 3 Pages

    Performance management is a process that guarantees an organisation and all of its available resources are working collectively and effectively towards achieving the organisation’s mission or goal. Performance management affords an understanding of what drives an individuals, and even organisations, performance at all levels. An understanding of performance management allows for the identification and minimisation of unproductive areas of an organisation, as well as an ability to predict future performance. It is a powerful tool that can be used by managers at all levels of an organisation to help improve a company’s productivity.

    Read More

  • The Importance of Performance Appraisals

    1400 Words  | 3 Pages

    ...organizational annual pay and grading reviews, Performance appraisals generally review each individual's performance against objectives and standards for the trading year, agreed at the previous appraisal meeting. Performance appraisals are also essential for career and succession planning - for individuals, crucial jobs, and for the organization as a whole. Performance appraisals are important for staff motivation, attitude and behavior development, communicating and aligning individual and organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development.

    Read More

  • The Importance Of Performance Evaluation

    896 Words  | 2 Pages

    Performance management is used for the basis of promotion, reduction in force purposes (talent management), gives transparency of what an organization is looking for, merit increases, and lastly it provides protection against lawsuits for unlawful termination by keeping written documentation. Performance evaluations are advantageous to both the organization and the employee. A leading advantage of performance evaluations is it gives the employee an opportunity to create and achieve smart goals. Although performance evaluations primary function is to measure whether an employee is a good fit or a bad fit for the organization, its function is so much a broader. Performance management is tool purposely used to motivate employees to examine themselves and determine if they have selected the profession that is best for them; consequently the feedback an employee receives from their superior supports them with increase their knowledge and

    Read More

More about Performance Appraisal Case Study

Open Document