Chapter 6 - Controlling Performance (part 2)

Question 1

How can an organisation influencing employees behaviour benefit the organisation?

Answer 1

Encouraging employees to adopt best practice
Motivation employees to improve productivity/quality
Preventing / detecting mistakes
Trying to limit theft or fraud
Encouraging employees to act ethically
Motivating managers to make right decisions

Question 2

What control mechanisms can an organisation put in place?

Answer 2

Organisational structure
Target setting and budgeting
Direct supervision
Culture of the organisation
Self-control
Control systems
Specific control processes
Policies and guidelines

Question 3

What are the four types of organisation control?

Answer 3

Personal centralised control
Bureaucratic control
Output control
Clan or Cultural control

Question 4

What is Personal centralised control?

Answer 4

This approach is likely to be found in small owner-managed organisations where there is centralised decision-making by the owner.

Question 5

What is Bureaucratic control?

Answer 5

Controls will be based on formalised rules, procedures, standardisation and hierarchy.

Question 6

What is Output control?

Answer 6

This approach is a form of control that is based on the measurement of outputs and the results achieved.

Question 7

What is clan or cultural control?

Answer 7

This form of control requires the development of employees’ strong identification with management goals, for example through professional identification and acceptance of the values and beliefs of the organisation.

Question 8

What are the problems with formal control?

Answer 8

Motivation problems. Lack of morale; little worker commitment; no interchangeable skills (people were only trained to do one small part of the job); high staff turnover.
Motivation problems. Lack of morale; little worker commitment; no interchangeable skills (people were only trained to do one small part of the job); high staff turnover.
Little understanding of people. People at work are not necessarily rational, for example they do not always work harder simply to earn more money.

Question 9

In order for control based on trust to work what number of factors must be in place?

Answer 9

The manager must be confident that the employee has the knowledge and the skills to undertake the task
The objective must be clear and agreed by both parties
The employees must be motivated to work hard and use initiative to achieve this objective

Question 10

What is performance appraisal?

Answer 10

The regular and systematic review of performance and assessment of potential, with the aim of producing action programmes to develop both work and individuals.

Question 11

What is the process of performance appraisal?

Answer 11

Target
Actual
Review
Action

Question 12

What are the four approaches to performance appraisal?

Answer 12

The ranking system
The unstructured format
Self-rating
360 approach

Question 13

What is the ranking system approach to performance appraisal?

Answer 13

This is a formal structured approach which consists of the individual being assessed and analysed in terms of objectives, tasks, workflows and results achieved. These are then compared with previously agreed statements of required results and performance levels

Question 14

What is the unstructured format approach to performance appraisal?

Answer 14

The unstructured format is another common approach where evaluators use an essay or short answer to grade employees.

Question 15

What is the self-rating approach to performance appraisal?

Answer 15

This approach is where the individual rates themselves on certain agreed criteria. This is then fed back to the manager who can review the individual’s assessment and make their own assessment.

Question 16

What is the 360 approach to performance appraisal?

Answer 16

The 360 approach allows more participation by the individual. While the manager will appraise the individual, the individual is also given the opportunity to appraise the manager.

Question 17

What are the benefits to individuals of a performance appraisal?

Answer 17

Provides feedback about performance
Identifies work of particular merit
Provides a basis for remuneration
An opportunity to discuss future prospects and ambitions
Identifies training and development needs

Question 18

What are the benefits to an organisation of a performance appraisal?

Answer 18

A system for assessing competence of employees and identifies areas for improvement
Provides a fair process for reward decisions
Helps identify training needs
Improved communication between managers and subordinates
Provides clear targets linked to corporate objectives
Provides a basis for HR planning

Question 19

What is a reward?

Answer 19

A reward is something given, to an individual or group, in recognition of their services, effort or achievements

Question 20

What is an intrinsic reward?

Answer 20

These arise from the performance of the job itself. Intrinsic rewards include the feeling of satisfaction that comes from doing a job well, being allowed to make higher level decisions or being interested in your job.

Question 21

What is an extrinsic reward?

Answer 21

These are separate from (or external to) the job itself and are dependent on the decisions of others (i.e. the workers have no control over these rewards). Pay, working conditions and benefits are all examples of extrinsic rewards.

Question 22

What should rewards be?

Answer 22

Fair and consistent for all employees
Sufficient to attract and retain staff
Maintain and improve levels of employee performance
Reward progression and promotion
Comply with legislation and regulation (i.e. minimum wage laws)
Control salary costs

Question 23

What are the six types of incentive schemes?

Answer 23

Performance related pay (PRP)
Piecework
Points system
Commission
Bonus Scheme
Profit Sharing

Question 24

What is a performance related pay incentive scheme?

Answer 24

part of the payment received by the individuals relates to the performance of the company.

Question 25

What is the piecework incentive scheme?

Answer 25

reward related to the pace of work or amount of effort. The faster the employee works, the higher the output and the greater the reward.

Question 26

What is the points system incentive scheme?

Answer 26

where a range of rewards is available based on a point system derived from the scale of improvement made.

Question 27

What is the commission incentive scheme?

Answer 27

paid on the performance of an individual and typically paid to salaried staff in sales functions

Question 28

What is the bonus incentive scheme?

Answer 28

normally a one off as opposed to PRP schemes which are usually a continual management policy. Bonuses may also be awarded to teams or groups that have met or beaten certain targets

Question 29

What is the profit sharing incentive scheme?

Answer 29

usually available to a wide group of employees (often companywide) where payments are made in the light of the overall profitability of the company.

Question 30

What are five types of targets?

Answer 30

Volume of work produced
Knowledge of work
Quality of work
Management skills
Personal skills

Question 31

What does the Drucker’s model emphasise?

Answer 31

emphasised that if corporate objectives are to be effective, they must be stated in behavioural or measurable terms, so that any deviation can be highlighted at an early enough stage to permit corrections to be made

Question 32

When setting objectives what do managers have a responsibility to?

Answer 32

agree their own departmental targets with their superiors
discuss and agree targets for their staff that are achievable
ensure that all targets set are measurable and possible, and that resources are made available together with some setting of priorities
ensure that there is a balance between the goals and needs of departments and individuals
apply the control system and discuss progress with staff at regular intervals.
ensure continual review and appraisal of results.

Question 33

What are the four things of a balanced scorecard?

Answer 33

Financial Perspective
Internal business perspective
Learning and growth
Customer perspective

Question 34

What is mentoring?

Answer 34

Mentoring is a technique which can be used to enhance performance. Mentoring involves a relationship where one person helps another to improve their knowledge, work or thinking

Question 35

What is the role of a mentor?

Answer 35

Encourage and assist junior members of staff to analyse their performance in order to identify their strengths and weaknesses
Act as a sounding board for ideas.
Share knowledge, advice and experience.

Question 36

What are the benefits of mentoring?

Answer 36

Faster career progress
Excellent value for money
Reduced staff turnover
Improves employee morale, trust and motivation

Question 37

What is coaching?

Answer 37

Coaching is another method which can be used to enhance performance. Unlike mentoring, coaching focuses on achieving specific objectives, usually within a defined time period. It is more about improving the performance of someone that is already competent, rather than establishing competency in the first place