Evaluation Of Performance Management
Every business strives to serve the best products or services to their customers. Businesses need to be cautiously managed and monitored to ensure success from the investment put forth into the business. Putting performance measurement in place can help the organization in keeping a track of progress which they have made (Hervani, Helms and Sarkis, 2005). It provides vital information on employee’s productivity and instills motivation in them to serve the best for company.
The study has been carried on Cavendish Hall Hotel which is being managed by the recently appointed Daphne Jones as a personnel manager of hotel. Herein, this report is a critical Evaluation Of Performance Management with the detailed discussion on its in-depth values towards the organization. The report is divided into two segments whereby, the first evaluates the contribution of reward principles, policies, practices and decision-making to the performance management. The next segment of report analyzes the designs, implementation and impact of high performance on organizations.
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Critical evaluation on individual performance related pay (IPRP)
Individual performance related pay is a pay that varies as per its respective performances. It is a financial rewarding system for employees where some or all are provided with monetary compensation according to the performance assessment relative criteria.
It can be seen that in every service sector, it is important for management to analyze and determine the performance objectives of individuals (Leopold, Harris and Watson, 2005). Further, businesses catalyze their performance objective to achieve the desired results. IPRP involve various wages, bonuses and grades which are passed on the workers to analyze their performance in reference to these rewards for a particular time period. PRP is a method by which salary increments are provided and motivation is boosted among them to carry out the identified objectives.
Daphne Jones has introduced the individual performance related pay scheme to review and boost the performance of employees of Cavendish Hall Hotel. It has introduced a standard-based system for rating of employees and for setting rewards as per their ratings.
The key advantages of individual performance related pay (IPRP) are-
Retention of skills- PRP helps in attracting and retaining their skilled workforce by recognizing their accomplishments and rewarding an effective pay system to employees. With the development in pay system, individuals can feel their recognition and importance towards the organization.
Standardization of employee performance- Managers are required to review the employee's performance and set standard criteria for effective accomplishment of their desired goals. Cavendish Hall Hotel has also subsequently set criteria which are bifurcated into excellent, good, satisfactory and unsatisfactory. The standard system ensures fair ratings of all and reduces the fear of favoritism among employees.
Establishing clear targets- This method helps individuals in recognizing the goals and objectives with an ultimate aim of attaining it. Top management is required to attain the key targets of hotel and set their standards as per those targeted to improve employee’s performance for the accomplishment of goals (Brown and Harvey, 2011).
Motivating employees- This method serves as a medium of encouragement of staff by providing them with pay equivalent to their performance.
The key disadvantages of individual performance related pay (IPRP) are-
Complexity reduced to simple- IPRP often reduces the complexity of performance measurement to a simple method. Simple measure provides no guarantee towards the quality of productivity. It is very much evident from the case study of Cavendish Hall Hotel that mentioned company did not have effective performance and customers are not satisfied who visited the hotel.
Leading to hostile work attitude- In the period when there is low customer volume, multiple employees may compete with each other for gaining attention of single customer. This instance will lead towards hostile working attitudes among employees. Resentment may be faced by some if they feel that their opportunity to gain extra percentage was snatched by someone else.
Performances can be subjective- The judgment criteria for same quality of work may differ from department to department and supervisor-to-supervisor (Thorpe and Beasley, 2004). Managers tend to turn judges at times and their unnecessary judgments regarding their work performance can decrease the morale of employees leading to unsatisfactory results.
Method inapplicable during recessions- It is seen that during period of recessions in economic business, promotion or rewards linked to performances are generally not provided. Therefore, hotel must consider this aspect by looking onto long-term aspect while introducing this method.
Inadequate criterion- Cavendish Hall Hotel should keep clear standards of criteria for judging the performances of workers. Organization has to set up a reasonable criteria for evaluating performance of their workers. Adequate criteria can help in judging the performance of workers for reasonable pay.
Over the decades, it has been seen that employers have been using Individual Performance Related Pay (IPRP) as a method of reward for higher performance (Prince, 2011). The 3 main reasons that led to its positive contribution in the organization are-
- To retain their current skilled staff
- Want to motivate and make new talents more competitive
- Fair means of distribution
It helps in enhancing the business performance by motivating workers to perform up to their best efficiency in order to accomplish their desired objectives and goals. IPRP helps in retaining employees as they feel satisfied on recognition of their performance by the organization through pay system. The competitive spirit of new employees is encouraged by motivating them to serve better performance for the organization (Schweyer, 2010). Lastly, it has been seen that it is a fair means of distribution among all.
IPRP is applied within Cavendish Hall Hotel by providing extra 1% increment in salary irrespective of their performance. Furthermore, additional increment is also provided which is directly linked with the individual’s performance. The method was introduced to enhance the employee's services leading to overall enhancement in organizational performance. But on the contrary, results were not as expected by Daphne (Hult, Ketchen and Arrfelt, 2007). The survey conducted by Daphne to gather their staff’s opinion was not satisfactory. The survey results proved the dissatisfaction among employees even after the introduction of IPRP as a method of rewarding system. The hotel incorporates a wide range of services within its ambit like conferences and banqueting facilities and popular wedding location. It also has different types of employees, that is, who work for full-time, part-time and there is temporary seasonal staff as well across its 5 departments. These divisions are events & banqueting, rooming & reception, housekeeping, food and beverages, HR and Administration.
Performance criteria for all belonging to varied distribution are the same (Aguinis, 2009). Hotel must provide different criteria measurement for different departments to win their level of satisfaction from the organization.
Barriers to effective implementation of IPRP scheme
For effective designing and implementation of individual performance related pat schemes, numerous barriers can be recognized. However, it can be seen that the moral of workers get affected by providing different PRP’s. It is important for the organization to create a strong relationship between performance management and performance related pay. The key aim of establishing this method of performance management system is to assure the positive link between individual work performance and consequent pay that is attached to their performance. With the adaption of this method, organization is able to encourage their workers to perform the given job effectively. This method helps in eliciting greater working efforts and maximizes one's job satisfaction (Ileana Petrescu and Simmons, 2008). This method is a tool that has a sorting effect in terms of correct recruitment and retention of employees.
Barriers that are commonly faced by Cavendish Hall Hotel at the time of implementation of IPRP scheme within their organization are-
Designing of equitable criteria for IPRP- Business encounters much confusion at the time of designing and implementing a standard performance related pay (PRP) system for individuals. Fairness of criterion may at times not appreciable where judgment is subjected to different course of job.
Correlation of reward with performance- The next barrier is to identify the remuneration link to the performance. The reward system set must positively contribute towards the performance of individuals. This is the common issue which is being faced by Cavendish Hall Hotel management whereby the correlation of rewards with performance cannot be matched (Porter, 2008). The customer satisfaction of hotel helps in determining that the policy of IPRP is not leading to positive performance of individuals.
Motivating staff to accomplish goals- The biggest problem is in setting performance standards that strike a correct balance between paying to make incentive motivational. It is difficult for businesses to drive employee's attention towards the accomplishment of goals. This barrier is often faced by employers. Therefore, it is important for Daphne to identify the system which motivates employees to accomplish the desired objectives.
Managers (Peers) uncomfortable rating- It is important for one to be unbiased while rating each other or their peers. In order to turn fair, it might result in dissatisfaction among them.
Budget Constraints- At times, organization’s limited budget may not provide continuous increment of 1% in each one’s salary.
Difficult to determine the base for measurement- Hotel faces difficulties in measuring the work performance of individuals especially during the time of changes (Joshi, Liao and Jackson, 2006). It is difficult for a service sector to determine the qualitative criterion for determining the performance as they might be misinterpreted.
Barrier as a consequence of implementation of performance
- There might be reduced intrinsic motivation.
- Self-esteem might get hurt where the performance is being low rated by managers.
- Promotes short-term behavior.
- Difficulties may arise while resetting goals.
- Conflict arises where there is any negative feedback.
- Focus is driven by employees on what is being rewarded rather than what are the organizational needs.
- Difficulties in maintaining consistency can be faced.
- The eagerness to compete might erode the trust and loyalty factor among employees.
Alternative reward approach that could complement or replace IPRP
It has been seen that pay system doesn't motivate employees to work harder. It has been observed that employees are motivated when they are given with extra rewards for the efficiency served by it for the organization. It is important for Cavendish Hall Hotel to adopt methods that measure and have a direct impact on the performance of staff (Cox, Brown and Reilly, 2010). In order to encourage employee’s performance, different alternative methods must be evaluated in detail. Alternative reward approaches are-
Appraisal as a performance management tool
The presence of an effective performance management system is often a major difference between organizations that provides desired results. Performance appraisal is a step whereby employer evaluates the employee’s job performance. Performance appraisal is an ongoing process of evaluating employee's performance (Chen, Yang and Shiau, 2006). Through this process, one can critically evaluate the performance of another.
Importance and effectiveness of objective setting, strategic alignment and lastly feedback
According to Cox, Brown and Reilly, (2010), setting up of objectives must be specific, valid and reliable, acceptable and feasible and those which are based on organization’s mission and vision. These set objectives will help the employees of Cavendish Hall Hotel to enhance their performance and drive their efforts in the accomplishment of desired objectives. Thus, establishing SMART objectives increase the business performance. Setting up of SMART goals can be an appropriate approach among workers and managers. SMART goals can be set whether it is a short or long terms objectives. This will help individuals in clear assessment of what is expected out of them. For example, managers of Cavendish Hall Hotel can set up the SMART objectives to enhance the employee’s level of performance by gaining high sales. By matching employee’s performance with the SMART objectives set by organization can result in effective sales.
According to Seidel and Shavelson, (2007), strategic alignment plays an important role for gaining business success. The strategic alignment also ensures that each person in the firm directs their efforts to attain the organizational goals. It also helps in linking business strategy with its organizational culture as it helps the cited company to change and align their vision with that of their leadership goals, with different departments, etc. From the view point of Gestwicki, (2013), if cited hospitality firm has to experience their organizational strategic alignment then their management and administrating goals need to be in a proper order. However, if employees are not competent and not having that much of knowledge to perform the task, then personnel manager can focus on conducting a training and development program for the new as well as existing employees. Further, this strategic alignment helps in promoting individuals as well as the team efforts by developing self-awareness and permitting employees to take part in the decision making of organization. This will help the cited company to achieve goals and objectives in a predefined manner.
However, strategic alignment not only helps to set goals and objectives for the mentioned hospitality. It emphasizes on aligning the entire organization with employees who are working in Cavendish Hall Hotel. Employees need to synchronize their daily efforts as per the needs and requirements of their customers as well as of the cited hospitality firm.
According to Klein and et.al., (2007), feedback generally means getting a positive or negative work done by an individual. Further, it is considered as an essence of the work culture as constant feedback plays a crucial role in motivating the employee's morale so that they can give their best efforts and performance to achieve the organizational goals and objectives. Moreover, providing feedback can boost the employee's morale as it will help him to not commit the same mistake again. Generally, there are two types of feedback which personnel manager of cited hospitality can impose. One is positive and other one is constructive. Positive feedback carries positive essence of reinforcing the desired behavior of employees. However, constructive feedback evaluates the area where workers within hospitality require maximum improvement.
From the view point of Mumford, (2006), effectiveness of feedback is necessary to develop the employee's morale as it evaluates the individuals who are lacking in performance and initiatives that can be taken to improve them in an effective manner. Further, if employees within Cavendish Hall Hotel would get constant feedback then it can be evaluated that whether they are performing well or becoming a liability for the organization. Cited hospitality firm will lead to termination of employees and focus on recruiting the best one from alternate source.
Links to appropriate development plans and support
Cavendish Hall Hotel needs to develop some specific plans to improve their performance as well as to touch the heart of their potential clients and customers. In the past few years, cited hospitality firm comes up with various drawback and comments which are given by individuals who stayed in that hotel (Allison and Horemans, 2006). The comments on online sites were unpredictable and unbelievable. On the contrary, to develop the organization’s respect and goodwill, Cavendish Hall Hotel has to adopt various changes which will help them in improving their productivity as well as their lost image globally. Hospitality firm must focus on the following explained points:
Improved Recruitment and retention- Employees who have interest of working in hospitality tend to be happier and give productive results for the business organization. Moreover, recruitment and training and development are the two areas where monetary values are assigned and if organization fails to recruit effective employees, then all the expenses which have been incurred will go waste (Marsden and Sonnino, 2008). Further, more stable and trained workforce results in the improved operating profits and revenue for the cited hospitality firm.
Training and development- All the employees who are working in Cavendish Hall Hotel need to be given with effective training so that individuals will be able to achieve their individual as well as organizational goals. Every department within mentioned hospitality is having its own significance and workers who are not well trained in any of the skills shall go with an effective training program (Guest, 2011).
Performance appraisals- Organization along with the Individual Performance Related Pay (IPRP) can implement performance appraisal method for motivating their potentially talented employees in order to achieve the organizational goals and objectives. This appraisal consists of all the basic specifications which employees must have to complete their tasks and duties efficiently within mentioned hospitality (Mahmoud and et.al., 2009). This performance appraisal is made on yearly basis which will help individuals to improve their pay structure. Improved pay structure will motivate the employees and they will work with the best of their talent and efforts to achieve the organizational aim and objectives.
From the above explained points, it is clearly evaluated that a successful training and development program leads to:
- Development of employees to achieve cited company’s goals and objectives.
- Staff that will become more efficient and productive.
- Employees are motivated and perform their tasks with the best of their efficiency and capability.
- For dissatisfied employees, a pool of new employees are trained which can replace them any time within cited hospitality firm.
- Individuals who are engaged in continuous learning are better to meet the challenges which organization faces in their daily life.
- Motivated staff focuses to work on innovation and program to develop the healthy image of cited hospitality.
Links to appropriate methods to manage poor performance
Cavendish Hall Hotel is facing consequences of poor performance of employees which is significantly affecting their productivity and goodwill. Organization can improve their worker’s performance by implementing some steps which have been discussed below:
Alignment of HR- Empowering the HR department to undertake different functional activities apart from their routine activities which consists of administrative functions, recruiting and selecting, training and development and various will lead towards the success and development of cited hospitality others (Tallis and et.al., 2008).
Effectual training and development of employees- Training and development to individuals will help Cavendish Hall Hotel to rapidly adapt the new circumstances and challenges which are trending in the business environment. Effective training leads towards the knowledge of specific skills within hospitality firm so that employees will be able to perform their duty in an efficient manner (ChenLam and Zhong, 2007). Further, cited hospitality is affected by a large range of internal and external factors which reduces the productivity and earning capacity of business enterprise.
Improving recruitment and selections procedure- Cavendish Hall Hotel who have positive reputation in the market place and takes healthier care of their employees faces few barriers in the recruitment and selection of employees (Carew-Reid and et.al., 2013). Cited hospitality firm has to adopt same procedure so that organization will have motivated and satisfied employees with low labor turnover.
Linking appraisal discussion with other management tools and techniques
Appraisals are the methods which are implemented by the organization to evaluate the performance of their employees. From the given scenario in the case study, it is identified that Cavendish Hall Hotel is going through many types of employee’s related problems. These problems can be resolved by firm’s appraisal discussions that are linked with the other management tools and techniques. Daphne Jones who is personnel manager in the cited hospitality identified that employees are not having healthy interpersonal skills and they don't even possess any type of leadership quality which helps the organization to achieve their organizational goals and objectives (Dormann and et.al., 2013). To develop interpersonal skills, personnel manager can take the help from different management techniques like training and development session for their employees. By conducting training and development session, organization will be able to get effective results within specified time period. Organization need to implement various leadership styles and required to find the best employees who possess all that traits as he/she will lead all the employees in an effective manner to achieve the organizational goals and objectives. These employees act as a leader and develop strong bond between the superior and subordinates within the cited hospitality firm. By improving these two problems, organization will be able to develop healthy relationship with their clients and significantly, it will result in the improved productivity and revenue for the cited hospitality (CHUANG and Liao, 2010).
Moreover, organization by taking feedback and reviews from their clients leads towards the fulfillment of management tools and techniques. By getting effective feedback from clients, organization will be able to evaluate that whether their employees have done significantly well to satisfy the needs of their potential clients or not. Feedback might be positive as well as negative. Positive feedback will motivate employee’s morale and they will get better appraisal at the end of the year for overall performance that they have given over the year. Negative feedback affects the corporate goodwill just because clients did not have a good experience with the hotel and this will have a bad impression on other clients (Kotey and Slade, 2005). Moreover, it is practically true regarding the comments which customers have given on various online tourists’ sites. Mentioned company has to do significantly well in order to maintain their productivity and to get the lost goodwill.
Getting Top Grades is No Longer a Dream for You.
Reviews are generally same as feedback as customers share their experience in the best way with the help of different form of communication. Personnel manager of Cavendish Hall Hotel would like to have review of their customers so that they can improve their service quality if any drawback exists.
From the above report, it is clearly evident that Cavendish Hall Hotel uses Individual Performance Related Pay (IPRP) to motivate their employee’s performance so that individuals as well as organization’s goals can be achieved. Further, this report consists of advantages and disadvantages of PRP which majorly focuses on improving the employee’s performance. Along with that, it also infers some barriers which mentioned hospitality faces while processing effective PRP schemes. Moreover, this report shows alternate methods which organization can implement to motivate their employees in order to boost their morale. At the end of the report, appropriate development plans like effective training and development to potentially talented employees in order to achieve goals and objectives of the cited hospitality has been discussed.
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