PERFORMANCE MANAGEMENT & PAY

Sandeep Shankar 92071 Ravi Sarup 92079 Varsha Dua - 92077

Performance Management
Performance management is an organizational alignment tool to help employees improve their performance in their current position.
Individuals

managers.
Every

develop clear measurable expectations with their

individual has an opportunity to see exactly how their work ties into the mission and goals of the organization.
It

provides an opportunity for every employee to receive feedback and improve his/her performance.

The most powerful tools for increasing the productivity of an organizations human capital are performance management and pay-for-performance compensation models.
These are two distinct tools. - Performance management is designed to improve employee performance through clarity of purpose, responsibilities and success measures, with the related feedback and coaching required to achieve these goals - Pay-for-performance is a unique supplemental compensation model designed to ensure that discretionary compensation is awarded to those who have performed or contributed the most to the organization for a defined period of time. Both tools have the word performance as their most significant descriptor, employees often come to believe that they are linked: one will drive the other.

PERFORMANCE Management and Pay for PERFORMANCE

Ever since companies decided that they should measure how their workers are doing and give the better performers a raise, employers have married employee performance appraisals with annual salary reviews. The questions raised are: 1) Is pay a motivator? And 2) Should performance appraisals and salary increases be forever linked, or should they be totally remote from each other?

PERFORMANCE Management and Pay for PERFORMANCE

Is pay a motivator? No its not the ONLY motivator

Motivation HOW??
Motivation factors are present in the job itself. They include such things as opportunity for recognition , achievement , and growth . Hence, a leader that recognizes employee efforts and helps employees achieve and grow can help improve satisfaction, as long as pay is perceived as fair. Thus, regularly spending time with employees focusing on development and achievement adds value. Performance discussions and salary reviews should be done in separate meetings at different times of the year. In addition, performance discussions should be a combination of specific examples of past performance and include a forward-focus, with the ultimate goal to increase future productivity

Should performance appraisals and salary increases be forever linked, or should they be totally remote from each other?

Separation WHY??
Current human resources thinking holds that it's probably best for companies to separate performance appraisals from salary reviews at least hold them at different times of the year and to use the appraisal discussion as a way of helping employees grow both as persons and as corporate contributors. Hence, it should be much more than a report card of past performance. Though it should be acknowledged that the compensation element will always be present, to some extent, in performance appraisals, they are two separate and distinct issues, and if you do both together, all a lot of people will hear is the money. If the employee has expectations and if the merit increase is not commensurate with those expectations , then we have a disgruntled employee

Expectation-based HOW??
Performance is based on expectations, while compensation is typically based on the state of the economy, the economic health of the business, and the employee's level of contribution to the company. Lets start with the performance development part of the process. Organizations should have a performance discussion system in place to use on a consistent basis throughout the year to assess employees' progress toward achieving specific corporate goals and performance expectations. Performance Development has two purposes to appraise past performance and assess future potential. What are the employee's promotional opportunities, what skills need to be developed, and what is necessary to help the employee?

Report Card WHY??

A report card (of past performance) is always good to have from a legal perspective for a termination, but we want to measure employees' progress. With a strong system, we can help people progress. For example, helping an assistant manager who has aspirations to become a manager develop the skills and competencies he/she needs to achieve his/her goal. A performance discussion is intended to set expectations and/or reiterate them. It's a time to review a job's duties and responsibilities, and review the goals of the corporation and the individual. As a company, the only way we can reach our goals is to help employees reach their goals. To do that, we need to understand their goals. What do we as a company need to do to meet your goals? And, that's not just professional goals, but their personal goals. We need to talk about personal goals

Communication Tool HOW??

Performance discussions open the lines of communication between employees and supervisors and help them set mutually agreed upon goals. Having face to face discussions has become particularly important in an age when much corporate communication is done by cryptic voice or e-mail messages. Heavy use of technology seems to significantly limit the amount of time spent actually talking with employees. How leaders and employees communicate is important as well. Communication should be a two-way practice, handled with supervisors who are trained in performance discussion techniques and understand its an ongoing process. Appraiser training The important part is the training you give your appraisers, because if it's not done properly, the whole thing will fall on its face The performance discussion system should provide a method for the supervisor and employee to have a meaningful discussion about how the employee has handled actual events against a set of clear expectations.

Compensation Review WHY??

In a compensation review, the goal is to establish the employee's value to the corporation , based on their duties and responsibilities, potential, and their own financial goals. If employees have a great performance review, they're going to expect a great compensation package, and that might be difficult. They may view themselves and their worth higher than the company does, hence dissatisfaction Factors that come into play in compensation review, include the company's economic health and how much it can prudently afford to pay, as well as the employee's skill level, responsibilities, and longevity not only with the company, but in their current position.

Performance Management:
Employees need to know they are cared about. Employees need to be praised and recognized for quality work. Have a regular forum for discussions with their supervisors, along with coaching on how to develop skills and competencies.

Pay:
Compensation obviously needs to be at least fair for the work being done.