Professional Documents
Culture Documents
Effective performance management systems enable an organization to objectively and systematically rate employee performance, while providing the tools necessary to take that performance level and equate it to compensation actions.
The core of any organization is its staff. How effectively an organization maintains a quality team of employees is linked to its ability to manage its staff and recognize the contributions of each player.
compensation programs
Attract quality employees with an effective performance management system
3.
A Formal Audit/Success Rating overview on an annual or periodic basis with disclosure of results to management.
Elements: Job Evaluations Performance Appraisals Pay-for-Performance Salary Programs Group Incentive Plans Individual Incentive Programs Reward Programs Compensation Communications
Job Evaluations
Performance Appraisals Pay-for-Performance Salary Programs Group Incentive Plans Individual Incentive Programs
Reward Programs
Compensation Communications
2. The prime consideration in the performance appraisal system is enhancement in overall performance. The process is expected to enhance the development of meaningful communication between the employee and his/her supervisor, which in turn should lead to such improvement in the employee's overall performance.
Job Evaluations
Performance Appraisals Pay-for-Performance Salary Programs
Performance standards are established for activities that employees can impact or control. Traditional Cost of Living and Seniority increases are eliminated. Increases are withheld from poor performers until their evaluated performance improves. Increases may take the form of additional salary and/or cash bonuses.
Job Evaluations
Performance Appraisals Pay-for-Performance Salary Programs
Advantages: Focuses the group on specific performance targets. Since rewards are controllable by individuals, the programs can be very motivational. The program can be integrated with other corporate initiatives (i.e., quality, product/service introduction, cost savings, etc.). Leads to improved communication and employee relations.
Group Incentive Plans can be costly to install and administer. De-emphasizes individual performance which can result in excessive peer pressure. Requires open communication with employees on costs, profitability, etc. (although this can be a sensitive issue, there are alternatives available). If the performance targets are not carefully selected, adverse results may occur
Job Evaluations
Performance Appraisals Pay-for-Performance Salary Programs
Job Evaluations
Performance Appraisals Pay-for-Performance Salary Programs
Individual Employee Oriented Programs: Pay-For-Performance Broad Banding Skill-Based Pay Special Awards
Team Based Programs: Group Incentives Group Sharing Gain sharing Long-Term Capital Accumulation
Pay-for-Performance Salary/Hourly Programs provide small increases to most employees based on changes in the labor market, with large, meaningful increases granted to a limited number of exceptional employees. Increases are based on realistic performance evaluations with some employees not receiving any increase.
Design Features:
May not be compatible with the organization's culture and is less successful in highly structured organizations. Loss of control points for salary planning and may result in overpaid employees, requiring greater emphasis on monitoring.
Design Features: Establishes an environment in which attainment of skill and knowledge is considered to be highly desirable.
Encourages skill acquisition and commitment by individual employees. Permits flexibility in worker assignments which may result in reduced staffing requirements.
Typically results in increased job satisfaction and lower turnover of skilled employees
Capacity to administer
Commitment to success Patience and perseverance Management commitment Clear-cut objectives and strategy Good management and employee relations Recognition of resources: time, expense, manpower
Job Evaluations
Performance Appraisals Pay-for-Performance Salary Programs
Second Level: Freedom from physical danger or freedom from a situation that endangers food, water, shelter
Third Level: Friendships and family relationships that provide the security of mutual emotional and physical support
Fourth Level: To be well-regarded by others or given status within the family and social group (employees will seek this in the workplace)
Fifth Level: The ability to satisfy the natural and learned inclination to explore to increase knowledge and understanding of your surroundings
Sixth Level: The desire to be surrounded by or to have access to things that you perceive to be of quality. symmetry, order, and beauty
Seventh Level: The ability to be unafraid of the unknown, willing to set aside fear in search of new experiences and rewards, with the knowledge that all that has been achieved in the past can be regained if it is lost.
Eighth Level: Certain that basic physiological and safety needs will be met, and not considering of great value the benefits of the interim levels, this person devotes their energies solely to providing for those whose needs are not being met and who appear to be unable to fend for themselves, typically supported by others who also value the higher cause