A well written, detailed assignment which meets the criteria for P5 - Unit 16, Human Resource Management in Business. BTEC Level 3 Extended Diploma in Business.
P5 - Explain how employee performance is measured and managed
Task 4 P5
Article for the CIPD “People Management” magazine
How employee performance is measured and managed in relation to Tesco
It’s extremely important for Tesco to measure employee performance as this is a way of the
business to track their employees. Furthermore, it helps to increase motivation throughout
the entire workforce as people are set targets and goals which they will work hard to
achieve. Measuring employee performance helps increase productivity of the business as
employees work harder to meet performance goals and this helps Tesco remain competitive
in the business environment.
, Conor Cunningham P5
Section 1
Measuring performance
To measure performance within Tesco, the company will use the following measuring techniques;
Performance indicators; In Tesco, there are many performance indicators. For example,
sales figures. If sales figures are high, this is an indication that performance is being carried
out to a high standard and is being managed well. Previous years figures may also be looked
at and comparisons may be made. Tesco can then look at what areas of employee
performance have improved and what areas have declined so that these areas can be
improved on. Customer feedback and employee feedback can also be gathered and this
would give Tesco a good picture as to whether or not their human resource team is working
effectively and efficiently. Depending on the different type of job in Tesco, there will be
different performance indicators. For example, an employee on tills performance may be
indicated by how many people are in their queue or their customer feedback store.
Whereas, a managers performance may be indicated by the revenue their store generates.
Goal theory; Tesco may set goals for their employees which will help them to measure
performance. Locke stated that employees were motivated by clear goals and appropriate
feedback. Locke went on to say that working toward a goal provided a major source of
motivation to actually reach the goal - which, in turn, improved performance. If an employee
of Tesco is working towards a goal and really wants to impress their manager and fellow
colleagues by achieving that goal, they will improve their output and this is linked with
performance improving. Tesco can then measure how this employee’s performance
improved.
SMART targets; In order to improve their employees output and
performance, Tesco should set SMART targets. This is a target which is
Specific (targeting a specific area for improvement, for example sales),
Measurable (suggesting an indicator of progress, such as increasing
cleanliness rating by 5%), Achievable (looking at how the target will be
achieved), Realistic (stating what results can realistically be achieved) and
Time-constrained (how long it will take to achieve the target). For example,
as a way of measuring performance Tesco may set their employees a
target of improving customer satisfaction by 5% in a time zone of six weeks
or increasing profits of 2% at the end of the year. These targets push Tesco
employees to work harder and in turn, performance is measured and improved.
Benchmarking; Tesco can benchmark themselves internally or externally.
If Tesco want to improve a particular aspect of their organisation, service or individual, they
may find someone else who is good at the activity and use them as a benchmark to raise
standards and improve performance. It can also be used industry wide – where Tesco
measure its performance against its competitors such as Sainsbury’s. For example,
comparing sales figures and staff retention figures. Benchmarking is an effective way for
Tesco to measure their current performance and make plans to improve their performance
in the future. An example of benchmarking against ASDA would be price checking.
Customers are given the price of the Tesco item and the price of the ASDA item and if the
ASDA item is cheaper, Tesco will take away the different from their customers subtotal.
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