HRM2604 EXAM PREPARATION 2021.

HRM2604 EXAM PREPARATION 2021. HRM2604 - Performance Management Practices. Explain the concept of performance management (PM) A continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organisation. - Continuous Process - Alignment with Strategic Goals (Employee contributions are congruent to the organization’s goals) Performance Appraisal A method by which the job performance of an employee is documented and evaluated. Objective 2 Distinguish between performance management and performance appraisal. A. Performance Management A continuous process of improving the performance of individuals and teams and aligning performance with the strategic goals of the organisation. o Ongoing Process, throughout the year o Strategic Business Consideration o Ongoing feedback provided to improve performance o Driven by Line Manager o Emphasis on performance planning, analysis, review, development and improvement. B. Performance Appraisal (component of management) A method by which the job performance of an employee is documented and evaluated. o Once a year process o Assesses business Strengths and Weaknesses o Once-Off rating is given o Driven by HR o Emphasis on ratings and evaluation. The Performance Management Contribution Objective 3 Explain the contributions that a performance management system can make in the organisation. Advantages - Motivation to Perform is Increased - Increased Self-Esteem - Managers gain insight about subordinates - Definitions of job and criteria (expectations) are clarified. - Self-Insight and development are enhanced. (Improving upon weaknesses or faults) - Administrative actions are more fair and appropriate (rewards are given if certain criteria is met) - Organisational Goals are made clear. - Employees become more competent - Employee misconduct is minimised - Better Protection from lawsuits. (compliance with regulations) - Faster Identification between good and bad performance. - Supervisors’ views of performance are communicated more clearly. - Motivation, Commitment, and intentions to stay in the organisation are enhanced. - Voice behaviour is encouraged. (suggestions made towards innovation and efficiency) - Employee engagement is enhanced Disadvantages of Poorly Implemented Performance Management Systems Objective 4 Discuss how a poorly implemented performance management system affects both the organisation and the employee. Disadvantages - Increased Turnover - The use of false or misleading information. - Lowered Self-Esteem. - Wasted Time and Money - Damaged relationships (mistrustful) - Decreased motivation to perform. - Employee job burnout and job dissatisfaction - Increased risk of litigation (lawsuits for unfair appraisals) - Unjustified demands on managers’ and employee’s’ resources - Varying and unfair standards and ratings. - Emerging Biases - Unclear Rating System. (poor communication causes a lack of understanding of how rewards are presented) Aims & Role of Performance Management Systems Objective 5 Describe and identify the multiple purposes of a performance management system. Purposes o Strategic Purpose Reinforces behaviour consistent with the attainment of organisational goals.  To help top management achieve strategic objectives o Administrative Purpose Implementation of reward Systems through information.  To furnish valid and useful information for making administrative decisions about employees. o Informational Purpose Provides Information on where to improve and what is expected.  To inform employees about how they are doing and about the organisation’s and supervisor’s expectations. o Developmental Purpose Using feedback to improve long and short term performance.  To allow managers to provide coaching to their employees. o Organisational Maintenance Purpose Provides information used in workforce planning. (Anticipating and responding to changes)  To improve information to be used in workplace planning and allocation of human resources. o Documentational Purpose Collects relevant information  To collect useful information that can be used for various purposes. Characteristics of an ideal Performance Management System Objective 6 Describe and explain the key features of an ideal performance management system. o Strategic Congruence  Individual goals must be aligned with organisational goals. o Context Congruence  The organization’s culture should be congruent with that of their country or region. o Thoroughness  Everyone should be evaluated. o Practicality  Readily available to use. o Meaningfulness  Evaluations take place at regular intervals at appropriate moments. o Specificity  Provide detailed concrete guidance on expectations and meeting them. o Identification of Effective and Ineffective Performance  System should allow for distinguishing between effective and ineffective behaviour. o Reliability  Measures of performance that are consistent and error-free. o Validity  Measures include all relevant performance facets and exclude irrelevant performance facets as well as factor outside f employee’s control. o Acceptability and Fairness  Systems is perceived as fair and acceptable. o Inclusiveness  Includes input from multiple sources. o Openness  Free and constant exchange of information on performance. o Correctability  Establishing an appeals process for challenging unjust decision. o Standardisation  Performance is always evaluated consistently at a set standard. o Ethicality  Complies with ethical standards. Workbook 2 Performance Management Process Terms Prerequisites Performance Planning Performance Execution Performance Assessment Performance review Performance renewal and re-contracting. Objective 1 Apply the stages of the PM process in the organisational context step by step. Stage 1: Prerequisites 1. Knowledge of the Organisation’s Missions and Strategic Goals Prerequisites Performance Planning Performance Execution Performance Assessment Performance Review Performance Renewal and Recontracting a. Links to individual performance 2. Knowledge of the job in question a. Job Analysis Stage 2: Performance Planning 1. Results The outcome that the employee must produce a. Key Accountabilities b. Objectives c. Performance Standards 2. Behaviour How a job is being done a. Competencies 3. Development Plan Identifies areas in need of improvement and setting goals a. Goal Setting Stage 3: Performance Execution The start of the review cycle where the employee strives to produce the results and display the agreed upon behaviour. Employee Responsibilities: 1. Commitment to goal achievement 2. Ongoing performance feedback and coaching 3. Communication with supervisor 4. Collecting and sharing performance data 5. Preparing performance reviews Manager Responsibilities: 1. Observation and Documentation 2. Updates 3. Feedback 4. Resources 5. Reinforcement Stage 4: Performance Assessment Part of the assessment phase where both the manager and employee is responsible for evaluating the extent to which the desired behaviours are being displayed. - Multiple sources of performance information - To what extent has goals been achieved Stage 5: Performance Review The meeting between the employee and the manager to review their assessments. - Appraisal Meeting or Discussion - Employee Receives feedback on their performance Stage 6: Performance Renewal and Retracting The final stage before the process is restarted at Stage 1. The new information is used to plan for the new performance review cycle. Workbook 3 Performance Management and Strategic Planning Terms Strategic Planning Environmental Analysis GAP Analysis Mission Vision Goals Strategies Definition and Purposes of Strategic Planning Objective 1 Define strategic planning and its overall goal Strategic Planning Process that involves describing the organization/s destination, assessing barriers that stand in the way of the destination and selecting approaches on how to overcome them. - The main goal is to allocate resources in a way that provides the organization with a competitive advantage whilst pursuing its goals. Objective 2 Describe the various specific purposes of a strategic plan o Defines the organization’s identity  Clearer sense of who they are and what their purpose is. o Helps organizations prepare for the future.  Clarifies desired direction/ goals. o Enhances ability to adapt to environmental changes.  Adapts/ anticipates changes. o Provides focus and allows better allocation of resources.  Stimulates growth and improves profitability. o Produces an organizational culture of cooperation.  Gives a competitive advantage. o Allows for the consideration of new options and opportunities  Expanding to new markets/ offering new products. o Provides employees with information to direct daily activities.  Provides critical information to be used in the performance management system. Process of Linking Performance Management to the Strategic Plan Objective 3 Explain the process of linking performance to the strategic plan. This is more effective if managers from all hierarchal levels are included in creating the organisation’s mission statement. The higher the level of involvement the more favourable the views of it will be. 1. Organisation’s Strategic Plan a. Mission c. Goals b. Vision d. Strategies 2. Unit’s Strategic Plan a. Mission c. Goals b. Vision d. Strategies 3. Job Description a. Tasks c. Knowledge b. Skills d. Abilities 4. Individual and Team a. Results c. Developmental Plan b. Behaviours Objective 4 Understand how to create an organisation's strategic plan, including an environmental analysis resulting in a mission statement, vision statement, goals and strategies. Performance management systems rely on the strategic plan to be useful. The behaviours, results, and developmental plans of all employees must be aligned with the mission, vision, goals and strategies of the organisation and their unit. Objective 5 Distinguish between the concepts of environmental analysis, mission, vision, goals, and strategies of the organisation. Step 1: Environmental Analysis A. Gathering of Information Identifies internal and external parameters influencing the organisation and its future decisions.  Opportunities: Characteristics of the environment that could help the organisation succeed.  Threats: Characteristics that could cause the organisation to fail.  Strengths: Characteristics used to their advantage.  Weaknesses: Characteristics that hinder success. B. Conducting GAP analysis. Analyses the external environment in relation to the internal environment.  Leverage = Opportunity + Strength  Constraint = Opportunity + Weakness  Vulnerability = Threat + Strength  Problem = Threat + Weakness Step 2: Mission Statement. Summarizes the organisation’s mission statement and defines why it exists, it also includes the scope of its activities, processes, advantages, beliefs, products and services. Step 3: Vision Statement of future aspirations. (What the organisation would like to become, written after the Mission Statement)  Core Ideology  Envisioned Future  Characteristics: - Brief - Verifiable - Bound by timeline - Current - Focused - Understandable - Inspiring -A Stretch Step 4: Goals Establishing goals that will further the organisation’s mission.  Formalize statements  Provides specific information  Basis for future decision making (Does in coincide?)  Used for Performance Measuring Step 5: Creation of Strategies Methods on how to achieve the mission, vision and goals of an organisation.  Create a Game-Plan / Procedure/ Plan-of-Action Objective 6 Understand how to conduct an effective gap analysis during the environmental analysis. 1. The GAP analysis consists of pairing strengths and weaknesses with opportunities and threats. 2. Determining whether the situation is to an advantage (Leverage), disadvantage (Problem) or between the two (Vulnerability, Constraint). GAP Analysis Influences External Environment Internal Environment Opportunities and Threats Strengths and Weaknesses - Economic - Organisational Structure - Political/ Legal - Organisational Culture - Social - Politics - Technological - Processes - Competitors - Size - Customers - Suppliers Objective 7 Justify the need to cascade organisational goals down to the departmental unit, team and individual levels. Involving various levels of the management hierarchy allows for all set goals to remain congruent with that of the organisation’s mission. A second factor is that each level understands how their particular activities influence the department and organisation. Developing Strategic Plans at the Unit Level Consensus: When the various organisational units agree on a common set of strategic priorities.