HRD, Performance and Reward Management

  • Category:
    Management
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    3
  • Words:
    1557

HRD, performance and reward management

Introduction

This essay chose the ‘underperformer’ manager appointed to the position of sales manager at HJ Heinz Company in Australia. The aim is to highlight and examine some of the best practices in human resource management that will assist underperformers in reward, performance, and human resource development. As an underperformer, the employee in the managerial position is likely to be devoid of suitable attributes, skills and competencies in management. While a manager should implement performance management functions, they should be able to integrate it with human resource development. Feedback to develop skills and ongoing goal setting will be essential in human resource development and performance management systems. Ultimately, the need for greater returns on investment and organizational profitability lies not only in motivated, highly skilled employees but also remunerated and innovative employees.

HRD, performance and reward management

Performance management is the range of activities that an organization engages to improve organizational effectiveness and enhance group or individual target performance (Fletcher, 2001). Performance outcomes should be measurable so as to manage employee efforts. One of the best practices in performance management is the process of appraising performance. Although performance appraisal concept has changed over the years, it is important to understand how an appraisal is done and who is responsible for the appraisals in the organization (Den Hartog, et al. 2004). Through performance appraisal, the sales manager at HJ Heinz can develop and assess employee levels of competence to distribute rewards and enhance performance. Another best practice of performance management is policy deployment which involves setting and implementing objectives for individuals, teams, and the department. The manager plays a critical role of cascading strategic objectives in from of set targets. Performance management not only supports and develops people but also helps in day-to-day management (Weatherly, 2004). The sales manager should be able to undertake individual career planning, coaching, communication, training and appropriate reward strategies. Moreover, there is a need to understand organizational level variables because changing individual performance is inadequate to improve the performance of the organization.

Guest (1997) argued that there is a relationship between performance and human resource management practices that are expected to improve motivation and commitment of employees within the organization. This implies that human resource development practices such as selection, skills, and competence development, appraisals, status and security can lead to high or low-performance outcomes. For example, the performance outcomes of the new sales manager at HJ Heinz should be quality innovation and productivity. However, it requires organizational citizenship, involvement, cooperation, and motivation or effort to achieve the desired organizational performance (Den Hartog, et al. 2004). Deb (2010) observes that human resource development seeks to increase behavioral elements, application of competencies and increase of business skills that are necessary for effective organizational performance. Therefore, the emphasis on the performance of HJ Heinz sales manager should be pay-for-performance aligned to reward strategies such as share options, profit sharing, bonuses or even base pay. HJ Heinz should also undertake human resource mobility, job assignments, and career paths to reinforce the deficiencies of the new manager.

The specific issues in human resource development and performers concerning underperformers in an organization are; organizational culture, succession planning, revising and adapting and use of quantifiable measures. While it can be possible to assess organizational performance, quantifying the contribution of individuals and teams to organizational outcomes is important (Den Hartog & Verburg, 2004). This is because changes in processes, systems, practices and policies may affect the contributions made by employees. HJ Heinz sales manager needs to identify milestones and implement clear, quantifiable measures using concepts such as a balanced scorecard. For example, knowing that the company needs to meet 50 percent of the sales figures in 6 months, the sales force should be empowered with the necessary workplace skills and values with regular revisions and adaptations. Moreover, these numerical targets will not be achieved standalone without succession and workforce planning. Largely, the focus should be on how to manage people and behavioral change and not systems or paperwork. Low performance negatively affects commitment (Den Hartog, 2004). Front-line managers mediate the roles of managing employee attitudes and perceptions and guiding their behavior and performance towards higher levels of trust, motivation, satisfaction, and commitment. While high performance is emphasized, it will be essential for the new HJ Heinz sales manager to demonstrate fairness and skill in giving feedback, appraising performance and setting objectives. Moreover, there is need to build relationships with different subordinates who will also be involved in performance management.

Performance management has been regarded as individual practices of adapting and measuring employee performance. Improvement in organizational performance has to be connected to reward performance, measurement and review of results and setting expectations for employees. Armstrong (2007) defines reward management as policies and practices of an organization that helps employees to receive rewards based on competence, market worth, contribution, and skills. HJ Heinz has linked rewards with the performance of its employees. This means that the company can offer a base rate to all employees then attach commissions and bonuses to the extra achievement of sales targets within the year. Reward systems encourage employees to give the best results by working hard to earn more (Guthrie, 2001). With higher earnings through commissions and bonuses, the sales employees get motivated and drive the level of organizational output even higher. When comparing the actual sales targets to the desired targets, it will be crucial for the sales manager to conduct regular performance appraisals to know the underperforming, satisfactory and over performing workers. The sales manager has a role of reminding employees that their package and pay are tied to achievement of retail sales targets. This means that after the performance appraisal, high performing employees will receive a pay rise while underperforming ones will get notices or warnings of termination.

Wiese and & Buckley (1998) argue that reward management, human resource development and performance and appraisal management are key functions of human resource management. While development involves improvement in employee skills and competencies, reward management motives them to achieve higher performance levels (Fletcher, 2001). Furthermore, performance management ensures that there are relentless commitment and continuing maintenance of organizational goals and objectives through a meeting of set targets. Employee performance is affected by their attitudes and perceptions towards work and the organization (Den Hartog & Verburg, 2004). Rewards such as bonuses and pay rise help to reinforce positive attitudes and perceptions towards work. However, high performance is positively related suitability in skills and competencies to the particular job description (Wilson & Western, 2000). This implies that managers have a role in selecting and recruiting the best talent and skill but will have to train and develop the skills in the employees to ensure they match the organization’s culture, mission, vision, values, and objectives. Organizational outcomes such as productivity are affected by employee reward systems which are in turn affected by employee levels of skills and competencies (Datta, et al. 2005). Employees with higher levels of competencies and skills are more likely to achieve organizational objectives and will be rewarded accordingly.

Conclusion

The essay has established that there is a positive relationship between performance appraisals, human resource development, and reward management. After developing skills and competencies in employees, there is a need to reward and appraise their performance. Being an underperformer, the new manager at HJ Heinz should undergo training and development to obtain the required skills and competencies. The manager will be involved in setting targets, and appraising and monitoring employee behaviors. It will be important that the manager cascades the mission and vision of HJ Heinz to employees by understanding performance management. Employees will have to work on a base rate but any extra performance will be tied to bonuses and commissions. Higher achieving employees will get favorable ratings during performance appraisals while underperforming ones will receive warnings and notices for termination of employment.

References

Armstrong, M 2007, A handbook of employee reward management and practice, Kogan Page Publishers.

Datta, DK, Guthrie, JP & Wright, PM 2005, ‘Human resource management and labor productivity: Does industry matter?’, Academy of Management Journal, vol. 48, no.1, pp. 135-145.

Deb, T 2006, Strategic approach to human resource management, Atlantic Publishers and Distributors.

Den Hartog, DN, Boselie, P & Paauwe, J 2004, ‘Performance Management: A model and Research Agenda’, Applied Psychology: An International Review, vol. 53, no. 4, pp. 556- 569.

Den Hartog, DN & Verburg, RM 2004, ‘High performance work systems, organizational culture and perceived organizational effectiveness’, Human Resource Management Journal, vol. 14, no.1, pp. 55-78.

Fletcher, C 2001, ‘Performance appraisal and management: The developing research agenda’, Journal of Occupational and Organizational Psychology, vol. 73, no. 2, pp. 473-487.

Guest, DE 1997, ‘Human resource management and performance: A review and research agenda’, The International Journal of Human Resource Management, vol. 8, no. 3, pp. 263-276.

Guthrie, JP 2001, ‘High-involvement work practices, turnover, and productivity: Evidence from New Zealand’, Academy of Management Journal, vol. 44, no.3, pp. 180-190.

Weatherly, LA 2004, ‘Performance management: Getting it right from the start’, SHRM Research Quarterly, vol. 2, no.3, pp. 1-10.

Wiese, D & Buckley, M 1998, ‘The Evolution of the Performance Appraisal Process’, Journal of Performance Management, vol. 4, no. 3, pp. 233-249.

Wilson, JP & Western, S 2000, ‘Performance appraisal: an obstacle to training and development?’, Journal of European Industrial Training, vol. 24, no. 7, pp. 384-391.