Gemma Hagan S11724728 HR Essay

Following the appraisal process individuals may be identified as being eligible for a performance related reward. Discuss the appropriate structure and format of organisational appraisal and outline the various reward schemes that organisations may adopt in order to manage the performance of their employees. Before any appraisal schemes and corresponding rewards are introduced to a companys employee(s), the establishment must first carefully design the appraisal scheme considering which format they are going to operate. The two most commonly used formats are SMART goals and 360 appraisals. SMART Goals SMART is a mnemonic, which is used to guide management of a company when they set objectives, often referred to as Key Performance Indicators (KPIs) for their employees to achieve. Each letter stands for a major term the objective being set must adhere to. S-Specific. This stresses the need for the goal to be specific rather than a general goal. It must be clear and unambiguous and inform the employee(s) exactly what is expected of them, who is involved, why it is relevant, where it will happen and what attributes are the most important. M- Measurable. This term enhances the need for there to be solid criteria for measuring progress towards the accomplishment of the goal in question. If the goal set was not measurable, it is not possible to know whether the employee(s) are making progress towards successful completion or if they need to do more to make for this is achieved. Goals are normally measured by quantity and quality of the work undertaken as well as time and money spent. A-Attainable. This term focuses on making the goals achievable for the employee(s) involved. The goals must be carefully set in order to not be too easy or too difficult for the staff to complete and be appropriate for the organizations and job holders capabilities. R-Realistic/Relevant- The goal set must be realistic i.e. within the capabilities of the individual employee(s) and the department and manageable within the set time frame (see next term). The goal must also be relevant in order to, when met, drive the individual, team, department and organization forward. This would need to be a goal that supports or is in alignment with other goals to be considered relevant (wikipedia). T- Time Framed. This specifies the time frame in which a goal would need to be achieved by, giving the employee(s) a target date. A deadline helps to focus employee(s) attentions to tasks that need to be carried out in order of priority to ensure all work is completed to meet the goal within the required time.

Gemma Hagan S11724728 HR Essay

360 Appraisals A 360 degree appraisal system is used to gather feedback on an individual employee from a number of sources, usually including senior managers, direct reports such as the employees line manager, fellow colleagues and customers. Its supporters state that this type of appraisal gives management a better understanding of the individual employee being assessed in areas such as working relationships as well as their skill set and performance levels. With a 360 appraisal, typically eight to ten other employees of the establishment are given questionnaires to complete regarding the employee concerned in the appraisal. In some organisations the employee will often fill out one of the questionnaires themselves to conduct a self-appraisal simultaneously. Questions used often refer to a scale, for example, from poor to excellent and usually have the option for free comments concerning the appraisee. Generally a 360 appraisal is carried out in order to gain feedback on an individual employee with anticipation to improve their performance. In order to make this type of appraisal successful the questions asked must be short, clear and relevant to the persons job role. The respondents must be credible to the employee and informed on what information they provide and how to back any up with evidential proof. All of the feedback is ideally carried out anonymously and then presented the appraisee by a trained senior employee. Why are appraisals used in an establishment? Appraisals both in 360 and SMART goal formats are used primarily to analyse individual employee performances. 360 appraisals are used by management, particularly in larger establishments who do not always work directly with all employees, to gain knowledge of their performance, skill set and working relationships from a wide source. Depending upon the outcome of this appraisal, the management will be able to see where the employee is excelling and which areas of performance may need work. SMART goals then make the areas that need improvement, achievable by the employee during a specified time period. Advantages and disadvantages of appraisals There are many advantages to appraisals for both the company and individual employees. By following the two appraisal systems, the management of an establishment are able to review employee performance and set goals to improve the individual, team and therefore the organization. Rewards can then be put in place as incentives for the employees to follow the set goals.

Gemma Hagan S11724728 HR Essay

The employees who have an appraisal are able to see where their weaknesses and strengths of their performance lie. By discussing their weaknesses and strengths with management the employee can devise goals to enable them to improve on their weaknesses and maintain their strengths within their job role. A disadvantage to appraisals is that employees may become disheartened and demotivated if they do not agree with what has been mentioned in the 360 appraisal feedback and they feel the goals set to improve on their weaknesses are unattainable. When the format of appraisal has been defined, management must determine the structure and consider the following points when designing the appraisal for individual employees. 1. Who should be in them? Different schemes may be designed for individual employees or groups of employees. The scheme designed may be specific to only a certain group of employees relating to their job role and what they can achieve to meet set goals in the appraisal. 2. What criteria will be used to evaluate contribution, should it review potential as well as current performance? If the company decides to evaluate potential performance, they will be able to set future goals for their employees to meet, progressing the company and the individual employee careers. 3. What sort of documentation should be used? This is how the company will choose to keep the performance of the employees documented on record. 4. How often should this reviewing take place? This could be weekly, monthly or annually depending on the type of appraisal scheme being designed. If the establishment wants improved performance in a specific area within a short time frame, weekly reviewing will be needed for example. 5. Who should be the appraisers? The establishment would need to consider who would be reviewing the employee(s) performances; this is often an employee in a management or senior role to the employee(s) being reviewed. 6. How open should the appraisal be? Should there be self appraisal? If an establishment decides to include self-appraisals, they are able to gain the employees opinions regarding their own personal improvement and performances and how they can achieve new goals set to gain rewards.

Gemma Hagan S11724728 HR Essay

7. Should there be regular reviews of the establishment? The establishment in question must consider how often they will review their appraisal schemes. By conducting regular reviews, it will allow the company to see how efficient the schemes are in motivating its employees to in turn improve the company in the desired areas.

Companies not only create reward systems to uphold employee satisfaction but they also have strategic intentions behind them. Reward systems help with the organisational structure of a company. They help to clarify the company hierarchy and link the contribution of individuals to job positions. The systems also help to with ascertaining the company policy, their mission statement and company values. Most obviously, the reward systems aid individual motivation by gaining employees with certain attributes to work well together and create successful teams within the work place. This is done by promising not only monetary rewards but also career development opportunities, increased job satisfaction levels and recognition within the company. There are various systems an establishment can put in place to reward its employees for meeting set performance goals within the company. The most common types of reward systems involve intrinsic, extrinsic, membership based and performance based reward systems. Intrinsic Reward Schemes Intrinsic motivation is inherent in the employees job itself. It is not created by external incentives. It can take the form of motivation by the work itself when individuals feel that their work is important, interesting and challenging and provides them with a reasonable degree of autonomy, opportunities to achieve and advance, and scope to use and develop their skills and abilities. (Armstrong, M) People looking for employment will seek work that gives them high levels of job satisfaction, therefore it is important that a company demonstrates how new potential employees will receive this and maintains these levels for its original employees. In order for a company to increase intrinsic job characteristics for an employee they must look at putting the following methods into operation within the establishment. Job Rotation By introducing job rotation within an organization, employees are moved from one task to another in order to reduce monotony within the work place and increase variety in day-to-day activities.

Gemma Hagan S11724728 HR Essay

Job Enlargement Job enlargement helps to expand the number of tasks that are associated with a particular job role. This involves combining fragmented tasks into one larger job again helping to add diversity and meaning into repetitive work. Job Enrichment Job enrichment offers a greater range of responsibilities applied to an employees job role. It gives the employee as much variety and decision-making responsibilities as possible in carrying out specific tasks within the work place. The above methods of increasing intrinsic value to an employees job role are often classed as non-financial methods. Non-financial methods also include; increased communication, empowerment of employees to enable them to make decisions and implement their own ideas and quality circles, regular meetings where employees representing all levels on the career ladder from different divisions of a company discuss problems and offer potential solutions to improve the work place and establishment. By rewarding employees with promised job rotation, job enlargement and job enrichment a company is able to maintain positive working attitudes and high productivity levels within the business. However the success of these changes within the work environment will depend highly on the implementation, relationship with other reward schemes and the impacts upon other colleagues within the company. Extrinsic Reward Schemes Extrinsic rewards are artificially applied to the job role, meaning that the rewards come from a source outside of the job mainly from management. These include incentives, increased pay, praise, promotion or punishments such as disciplinary action, withholding pay or criticism. Extrinsic motivators can have an immediate and powerful effect, but will not necessarily last long as soon as the employee receives the payment/reward. (Armstrong, M) Extrinsic rewards are often classed as a financial method. Financial methods directly involve monetary rewards, which often include wages, bonuses, profit sharing, pension plans, paid leaves and purchase discounts. Membership-based Schemes Membership-based rewards include common benefits given to all employees across the whole company. These benefits are at the same level across the board of employees and are usually given as a benefit for working for that particular company.

Gemma Hagan S11724728 HR Essay

Membership-based rewards often include benefits and services, such as health club/gym memberships, Insurance plans, the most common being health services such as private health care, and profit sharing. In a unionized environment, membership rewards are usually spelled out in a labour agreement, so all employees have an understanding of the reward scheme and are aware of what to expect. A membership-based structure means that all employees will receive the same pay raises and new benefits introduced regardless of their performance. This means that on occasions these type of reward schemes can be de-motivating to high performers due to lower performing colleagues receiving the same benefits. Performance-based Schemes Performance based rewards are linked to an individu als, groups or organisations ability to meet previously agreed-upon standards of performance within an establishment. These types of rewards are variable; this means the level of reward available is always at risk if performance targets are not met successfully. Performance based rewards often include- commissions, piecework pay plans, incentives, group bonuses and merit pay plans. There is a clear difference to be seen between performance-based and membershipbased schemes. Membership-based schemes are applied to all employees of an establishment and only ever vary employee to employee if the establishment operates a structure, which includes additional benefits for the length of commitment given from an employee to a company. For example, every 5 years worked at a company, a new additional benefit can be gained by the employee. Otherwise all employees maintain the same levels of basic benefits, regardless of length of service, hours worked or performance levels. Performance-based schemes on the other hand reward deserving employees regarding their levels of performance for a company. If a company operates this type of reward system, expectations and goals will be set, performance(s) measured and if targets are met due to high performance levels, prompt rewards (usually pay) will be delivered to the staff as expected. If goals are not reached, the rewards will not be given to the companys staff. This type of incentive creates highly productive employees and enables companies to concentrate employee efforts into areas where the company needs them most. Finally the reward strategies introduced into a company must be balanced between intrinsic and extrinsic, financial and non-financial and performance-based and membership-based rewards. This is to ensure the company can afford to operate their rewards system, make it fair to all employees and maintain it throughout the year. They must also keep the strategies balanced in order to maintain employee well-being, high productivity levels and positive attitudes to drive the organisation forward.

Gemma Hagan S11724728 HR Essay

References (cited): Armstrong, Michael. Armstrongs Handbook of Human Resource Management Practice. London: Kogan Page, 2009. Print Smart Criteria. 2012. [online] Available at: http://en.wikipedia.org/wiki/SMART_criteria [Accessed 4.01.2013] Resources: Seven Steps To Successful Performance Based Rewards [online] Available at: http://www.dgm.com/information-center/articles/seven-steps-to-successfulperformance-based-rewards/ [Accessed 21.12.2012] Human Resource Management [online[ Available at: http://www.scribd.com/doc/57811292/19/Classification-of-Rewards [Accessed 2.01.2013] The Four Intrinsic Rewards That Drive Employee Engagement [online] Available at: http://www.iveybusinessjournal.com/topics/the-workplace/the-four-intrinsicrewards-that-drive-employee-engagement#.UOwuU0KFUy4 [Accessed 7.01.2013] Recreation Managers Can Use Rewards To Improve Employee Motivation [online] Available at: http://www.humankinetics.com/excerpts/excerpts/recreation-managers-can-userewards-to-improve-employee-motivation-retention [Accessed 8.01.2013] Financial And Non Financial Incentives [online] Available at: http://www.ngfl-cymru.org.uk/eng/financial_and_non_f_motivation.pdf [Accessed 8.01.2013]