Performance management is the technique through which capability, efficacy and potential of employees can be found out. Several techniques and methods can be taken into account to measure the potential of employees and all such methods should be justified for the situation. In the present research study, researcher has discussed the effectiveness of Individual Pay Related System on the basis of a case approach. Further, researcher has also discussed several ways through which rewards can be delivered to the employees as per the performance level. Rewards are the best forms of delivering monetary benefits to the workforce; hence in the present case, both the forms of rewards have been discussed.
Moreover, researcher has discussed need of other management tools in supporting reward strategies. Rewards as well as non-monetary both the sources seems to be imperative for the management for subsequent hotel because that works in retaining skilled employees for future business. Poor performance of the hotel is directly linked to performance management aspects because employee give the best efforts when they are provided with different benefits from the management. At the same time, it is also essential for the employer to integrate organizational plans with employee roles and responsibilities so that overall aims and objectives can be acquired.
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Introduction Performance Management
Performance Management Is The Concept Which Helps The Business entities to evaluate the efficacy of employee capability with the help of several measures and standards (Waal and Coevert, 2007). Thus, for such purpose, the present study has been made on Cavendish Hall Hotel which provides wide range of services and is also popular for wedding purposes. In such context, effectiveness of performance related pay and the possible barriers in implementing the same has been discussed in the present study. Furthermore, several reward management strategies are also stated through which organizational performance can be improved. Furthermore, in next section of the research, researcher has stated the importance and effectiveness of objective setting, strategic alignment and feedback. In order to enhance capability of the employees, the hotel has to undertake several methods to manage poor performance.
In the present case, Cavendish Hall hotel can derive several benefits from the system which are mentioned in the below section:
Transparency management: Transparency can be managed in the business processes due to focus on individual performance aspects. Each and every employee can get the idea regarding their contribution in success and prosperity facets.
Employee issues can be reduced: Issues related to employee misconception can be avoided at the same time because IPRP system can assist Cavendish Hall hotel to specify things in adequate manner.
Clear structure for salary and incentive: Performance related pay is a way of managing pay by linking salary progression to an assessment of individual performance and this is usually conducted on the basis of pre-defined aims and objectives.
Disadvantages of IPRP system
Extra cost of the system: To execute the system, Cavendish Hall Hotel has to invest resources in the strategy execution process and allocating resources in such activity could hamper budgetary aspects of the hotel.
It weakens team work: IPRP system emphasizes on individual performance management and it does not consider team management. Thus, the capability of the person can be restricted to individual performance and he will not be able to contribute in team management.
Lack of team participation: Lack of team participation affects the overall sustainability of the hotel and this may arise due to implementation of IPRP system. IPRP system emphasizes on individual performance management and it does not consider team management. Thus, the capability of the person can be restricted to individual performance and he will not be able to contribute in team management.
Benefits of IPRP system to business performance
Better communication can be facilitated through implementing IPRP system at Cavendish Hall hotel as employees will be able to determine the ways through which performance capability can be encouraged. IPRP system is also beneficial in terms of managing clarity and transparency in the business processes. If there is a link to pay, the increase or budget bonus will be spent on fair basis for the purpose of motivating the employees in adequate manner. Proper performance management system can assist Cavendish Hall hotel to increase the return or yield ratio and the content of appraisals will help in managing manpower planning. Employees can also develop adequate culture at the hotel where is yet another criteria for motivating the workforce.
How suitable is IPRP
Business environment is the combination of several internal and external factors that affects business practices in affirmative and perverse manner. Through IPRP, employees will be able to evaluate their performance level and they can also implement necessary changes in the performance capabilities (Performance management system and employee’s job commitment, 2013). The major aspect concerned with business environment is organizational culture which can be developed in adequate manner only with employee support and collaboration. The process is beneficial for the employees since through that, they will be able to produce optimum results for the hotel. The process is highly suitable in terms of developing positive environment at workplace and as a result, all the employees are able to produce better results in organizational practices (Rao, 2004).
Employee capability can also be encouraged with the help of proper performance management system and through this, they can be rewarded with several monetary and non-monetary benefits. Pay for performance has become a widely utilized means of improving productivity and decreasing costs in the hospitality sector (Pulakos, 2009). Considering, traditional way of performance management, it can be said that piecework is the oldest form of pay for performance where in workers are paid for the number of finished products that they turn out during a defined pay period. Execution of such system at Cavendish Hall hotel could include disincentives as well. Thus, accordingly employees should be rewarded on the basis of work done by with within a certain period of time (Miner, 2012). On the other hand, the theoretical arguments relating to IPRP are not adequately supported by empirical evidence, whilst the practical research studies that have been undertaken concludes that the entire success will dependent on employers and HR practitioners of the hotel.
IPRP system would be beneficial for the hotel in a few areas; however due to diversified departments, the system may not work as per the expected way. In the contemporary scenario, it is difficult to manage motivation of all the employees; thus there should be clear and specific dimensions determined for employee performance management. IPRP system would focus only on individual's personal achievement; however the efficacy and competency of the workforce in a team can not be ascertained with the subsequent IPRP system. Along with IPRP system, Cavendish Hall hotel could think upon Reward system as that measures overall criteria from employee performance. In modern business scenario, hotels and organizations have been emphasizing on reward strategies and aspects because individual rewards are entirely concerned with organizational performance and competency.
Barriers to the effective design and implementing of IPRP schemes
While executing the process (IPRP), Cavendish Hall hotel might face several issues from other employees because of the criteria and parameters designed. Employee advice should be included in organizational processes so that effectiveness ratio can be augmented. The parameters defined for the process should be based on employee performance aspect (Marques, 2007). Difference in opinion can hamper the decision making process related IPRP and this can also affect the parameters defined for the concept. Cavendish Hall Hotel may face barriers due to these specified reasons which are stated in the below section:
Implementation of such process requires close monitoring where in employers have to observe performance ability and effectiveness of employees by measuring with different criteria and standards. Thus, employees working on senior level may refuse to adopt the criteria because they have appropriate knowledge for managing their work (Latham, 2007).
The process is considered time consuming and expensive because it involves measuring employee performance on different grounds. Therefore, employer has to measure the performance on the basis of selected criteria and since it is about every individual; therefore it will definitely consume much time.
Furthermore, issues may arise at the time of determining or setting benchmarks for IPRP system. While deciding the benchmarks, several things should be taken into account; thus this may create misconception among the managers (Fleetwood and Hesketh, 2010).
Non availability of ample amount of organizational resources could also affect implementation of the process and this may also influence hotel's productivity.
Employee resistance is one such barrier that affects implementation process because sometimes the criteria are determined on organizational basis irrespective of employee preference.
Several other barriers that are appearing in the execution process of IPRP are stated in the below mentioned section:
Team structure of the hotel: Team structure of the hotel is considered as a barrier to the IPRP implementation process where in, it is difficult to manage performance analysis of individual due to diversified roles and responsibilities.
Lack of financial and other resources: Cavendish Hall hotel is also facing problems related to budgetary aspects; thus the hotel is unable to delegate financial resources in requisite areas.
Improper engagement of employees in organizational process: Employees of the Cavendish Hall hotel seems to be disengaged in organizational processes; therefore lack of active participation from the employees is yet one of the major barriers in strategy execution process.
Lack of proper understanding about reward system: Employees at Cavendish Hall hotel do not have proper idea about the reward system; hence this state of confusion could lead to other problems in strategy execution process.
IPRP System has been implemented at Cavendish Hall hotel for the purpose of enhancing individual performance level. The issue of poor performance has been increasing in the hotel; therefore changes in the existing systems are required. In order to improve the performance management system, Cavendish hotel is required to bring reward system in the management so that employee efficacy can be increased through varied benefits. Total Reward System should be used by the management where in several criteria should be defined for the employees so that they can reach towards the standard performance level. Monetary and non-monetary (rewards, recognition, appreciation and incentives) benefits can be provided at the same time under Total Reward Policy. The IPRP system should be completely changed to reward system. Performance of the employees needs to be measured on the basis of these mentioned parameters:
- Employee contribution in goal accomplishment process
- Ability of employee in growth and achievement aspects
- Performance aspects
- On the basis of team and other management aspects
Thus, at this stage, it could be assumed that replacement of IPRP system with that to Total Reward Policy might generate positive outcomes for the Cavendish Hotel. Such replacement would help the management to frame clear dimension for performance management system.
Reward systems have been greatly contributing in enhancing efficiency of the employees as rewards are the best source for encouraging morale of the employees. Thus, it can be said that there should be adequate reward policy at Cavendish Hall hotel so that organizational productivity can be encouraged (Reward Schemes for Employees and Management, 2015). Reward strategies can be used as a compliment system by the hotel where in employees who perform in adequate manner should be rewarded with suitable monetary and non-monetary (rewards, recognition, appreciation and incentives). This is also beneficial in terms of improving their motivational level and as a result, employers are able to retain the employees for longer period. Individual performance related pay is the scheme where in employer provides monetary benefits to the employees as per their performance level and to conduct the same, clear and comprehensive parameters are defined. Reward approaches could replace IPRP because rewards can be provided for every work processes which encourage employees to produce better results (Impact of Performance Appraisal Systems on Employee Productivity, 2012).
It has been observed that hotels of UK have been providing numerous advantages to the employees as per their contribution in success and prosperity aspects. Cavendish Hall hotel has determined several criteria for rewarding the employees and on that basis; individuals are getting monetary benefits (De Simone and Werner, 2009). While rewarding the employees, transparency should be maintained so that employee interest can be protected and this is also essential for promoting organizational processes. Reward is termed as the driver of performance management and it is a major component fro employee motivation. There should be optimum criteria under reward management so that employees can put their efforts in producing the best results for the hotel. Moreover, this will not only improve employee skills but also it will accelerate Cavendish's productivity and success facets (Collins and Clark, 2003).
Therefore, here Human Capital Theory can be interlinked with this approach which states that human capital is the stock of knowledge, habits, social and personality attributes. Thus, all such efforts develops the opportunities to produce economic value (Human- Capital theory, 1998). Cavendish Hall hotel must give greater concern towards human resources because human capital is a collection of resources which results in increasing organizational wealth and prosperity. Human capital arises out of any activity able to raise individual worker productivity. For workers, it is vital for the hotel to invest resources in human capital so that direct and indirect cost of all the operations can be declined. However, on the other hand Human- capital theory has attracted much criticism from sociologists of education and training (Chuang, Church and Zikic, 2004). Thus, from the discussion, it can be said that rewards are much effective because it includes extrinsic and intrinsic aspects. On the contrary, performance related pay scheme rewards employee with a financial payment, either consolidated or non- consolidated. Cavendish Hall hotel can foster right behavior at hotel because money is a potentially powerful incentive to influence the amount of effort that employees will exert on behalf of the organization (Christensen, 2002).
Furthermore, motivation of employees is clearly an important factor for the overall performance of the organization. The link between reward schemes and motivation is a complex issue; thus to comprehend the same, Maslow's need hierarchy theory can be integrated with it (Budhwar, 2000). Applying subsequent theory to reward schemes suggests that junior staff who earn low wages will be motivated by receiving higher monetary rewards, as this will enable them to meet their psychological needs. When employees of Cavendish Hall hotel will get progressively high paid, then monetary rewards will become relatively less vital compared to other needs in the hierarchy pyramid. However, to contradict the fact, Herzberg argued that increasing rewards only motivates employees temporarily and once they become demotivated again, it is significant for the employers to provide them other benefits (Brockbank and Ulrich, 2005). Thus, the author supported that, a far better way to motivate employees is to find out what actually encourages human beings.
Appraisal management report
While executing performance appraisal system, Cavendish Hall hotel must have to develop several objectives so that accordingly performance of the employees can be measured and evaluated (Christensen, 2002). With the help of appropriate goal setting, employees can get assistance to perform in better manner. Objectives should be determined prior executing any process in the hotel because that gives adequate direction for managing diverse activities. On the other hand, it is vital for the employers to include feedback as well in the subsequent process so that employee advice can be taken into account. This is another criteria through which employees can be motivated and encouraged to produce better results and outcomes. Performance appraisal can be taken into monetary and non monetary methods as the basic aim of the concept is to boost the morale of employees for better productivity (Latham, 2007).
On the other side, each and every employee of Cavendish Hall hotel should be informed about organizational processes so that they can give their preferences as well in the existing performance management process (Rao, 2004). Strategic goals are essential for the processes because that helps the hotel to determine adequate standards according to which goals and objectives can be acquired. Cavendish hotel is also required to consider feedback of employees and according to that, certain changes should be implemented in the performance appraisal method. This is also vital in terms of managing employee interest in organizational practices. Performance appraisal is a part of performance management where in employer analyzes efficacy in employee performance and on that basis rewards and monetary benefits can be provided (Schubert, 2015).
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While accessing the performance of employees, it is essential for the manager to communicate the aspects through which performance will be evaluated and that also aids in motivating the employees towards better productivity (Waal and Coevert, 2007). Employee performance is such aspect through which the ability to retain potential customers can be identified and this is highly essential for Cavendish Hall hotel. All the employees should be provided the right to ask for the criteria on the basis of which there performance has been evaluated. Performance evaluation should be made on adequate criteria and there should be similar parameters defined for all the employees so as to maintain equality management for employees. Therefore, as per the system, employers can also identify those employees who are performing below the average line. Thus, accordingly several methods can be adopted to improve the performance level of the employees (Holmes, 1997).
Development plans and support
Every individual require transparency in performance management system; thus individual performance related pay technique would be highly appreciable for Cavendish Hall Hotel and according to such method, capabilities of the employees can also be enhanced. The efficacy and performance of the hotel can be improved through paying adequate amount of support to the employees (Paying for Performance New trends in performance-related pay, n.d). Employees of the hotel will be able to derive optimum benefits from the management as per their contribution in organizational success and prosperity. Implementing IPRP process can assist the hotel to rate the performance of employees and through this, adequate ranking can also be given to employee performance. IPRP has direct relationship with organization performance because the technique measures employee performance and rates as per the capabilities (Schubert, 2015).
Implementation of the system can enhance the efficacy of the employees as they will be more motivated to produce better results for hotel's success and growth. Execution of the policy will also improve employee motivation and as a result, better culture can be facilitated in the hotel entity (Impact of performance management system on the employees, 2003). There are a few areas in the hotel business that are concerned with employee performance; thus for such aspect clear structure should be developed for performance management. Appraisals and recognition both are considered the best source through which employee capabilities can be accelerated. Hence, this has a direct and affirmative impact on organizational performance (Sahu, 2009).
Methods to manage poor performance at Cavendish Hall hotel
It is an apparent fact that there are several employees who are unable to reach towards organizational standards; thus for those employees, different modes could be taken into account. It has been seen that several quality issues are arising in the hotel which is increasing customer complaints and alongside this reduces room occupancy (The Impact of Performance Management System on Employee performance, 2004). These issues are arising because of those employees who are under performing. Hence, to manage the same aspect, several modes can be adopted where in employees should be guided properly so that according to the defined standards, they can perform their job roles. There should be direct communication among the management and the employees so that proper rating can be given to employee performance. Employers must have to give feedback to the employees regarding the areas where they are under performing (Collins and Clark, 2003). In order to enhance capability of the employees, it is imperative for the management to change the way of measuring and evaluating the performance of employees; hence for that evaluation techniques can be changed.
Cavendish Hall hotel can adopt Balance Score Card so that performance of the employees can be measured and rated on the basis of defined parameters. With the help of Balance Score Card, performance of the employees can be compared with others so that they can also put their best efforts in goal accomplishment process (Schubert, 2015). Furthermore, to manage poor performance, it is essential for the employers to observe the performance of employees so as to find out the areas of improvements and modifications. Employees can also made clear discussion with each other regarding the ways which can be adopted to increase performance level. Apart from this, management of Cavendish Hall hotel can also adopt Rating Scale where in employers as well as peers needs to give rating to employee performance on the basis of standard criteria. At the same time, rating scale will also assist the hotel entity to access the need for training and other development (The Impact of Performance Management System on Employee performance, 2004). This is essential in terms of increasing organizational capability and productivity.
Furthermore, poor performance can be managed by providing motivation and encouragement to the employees regarding the job roles so that they can put their best efforts in eradicating hotel's issues. From the case approach, it has been observed that Cavendish Hall hotel has been facing issues related to customer services; thus those employees who are managing these services should focus on improving the service provision. This is suitable for the purpose of retaining customers for longer span (IMPACT OF PERFORMANCE MANAGEMENT SYSTEM ON THE EMPLOYEES, 2003). Moreover, Cavendish Hall hotel can also maximize the interest of other customers by promoting adequate services and this can even work in maximizing success aspects of the hotel. Employees should be given the authority to raise their opinion in decision making process so that this can help them to ascertain the methods which could be adopted for better performance. Hence, from the discussion, poor performance can be managed; however the management of the hotel will also be able to undertake actions for efficacy development.
All the employees at Cavendish Hall hotel have been managing different roles and responsibilities; however there are a few employees who are unable to cope with organizational standards. Thus, with the help of Individual Performance Related Pay, Cavendish Hall hotel can identify those employees who are unable to perform in efficient manner. Bad performance of the hotel can be improved through analyzing individual performance along with their contribution in organizational practices. Implementing such system could also assist the Cavendish Hall hotel to access the need of training and development for each employee.
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Summing up the above report, it can be stated that performance management is an important Aspect For Hotel Sector because the services are directly integrated with customer satisfaction. Along with this, to meet constantly changing needs and demands of customers, hotel needs to adopt performance management tools so that employee skills can be achieved. This will also assist the hotel to enhance success and prosperity aspects. Moreover, these aspects are vital for enhancing long term sustainability and competitive advantage of the hotel.
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