8- Managing People

Question 1

Appraisals- Definition

Answer 1

A source of personalised feedback to an employee as to whether they are performing well
or need to improve at aspects of their job

Question 2

Categories of appraisal

Answer 2

Performance review
Analysis of employee performance and productivity, measured
against their training and whether they have achieved their
goals/objectives. This helps to determine future training and
development requirements.

Potential review
Career motives and ambitions are discussed and how these
may be achieved. This is useful for new employees and is a
longer-term tool than a performance review.

Reward review
Employee performance is analysed to determine financial
rewards, e.g. pay rises and bonuses

Question 3

Steps for formal appraisals

Answer 3

Setting objectives
Objectives can cover any aspect of their job. Expectations
should be clear, fair and able to be met by the employee, to
avoid demotivation.

Monitoring progress
With the objectives in mind, a manager should monitor and
support the employee’s progress and communicate any
concerns or praise.

Appraisal
The manager and employee will meet up to have a formal
review of how the employee has performed based on the
objectives set.

Revised objectives
Following the appraisal, new targets are set to help the
employee progress further, bearing any difficulties or successes
in mind.

Question 4

Benefits and barriers to effective appraisals

Answer 4

Benefits:
* Identifies where the employee needs improvement and ways to achieve this
* Supports career planning which helps to focus training and development towards
long-term ambitions
* Allows for targets to be set to improve employee motivation and reward excellent
performance
* Enables the manager and employee to exchange feedback and ideally improve the
working relationship

Barriers:
* Can lead to confrontation if both parties do not agree on the appraisal
* The process could be biased or one-sided
* Targets may become irrelevant before the next appraisal
* Employees may feel the process is unnecessary and dislike the time it takes, e.g.
filling out extensive forms for 180 and 360-degree appraisals

Question 5

Four key types of appraisals exist:

Answer 5

Self-appraisal
* Employees appraise themselves and then discuss the results with their manager
* Employees are more likely to follow ideas for improvement they have generated
* Self-appraisal saves management time
* May include self-rating - When an employees appraises themselves on a scale which is
based on pre-defined criteria
* May need to be combined with a management appraisal

Management appraisal:
* Employees are appraised by their manager
* They find out what they are doing right and wrong in the opinion of the management
* Potential for bias, as the objectivity of managers could be compromised, e.g. biased
towards favourite employees
* May be based on a ranking scale to align employees on a consistent scale, or may be
unstructured and based on a broader view of an employee’s performance

180 degree:
* Employees appraise their own performance, (e.g. with a pre-appraisal form), which is then
reviewed by their manager
* May include progress, strengths and weaknesses
* The employee meets with their manager to discuss this self-evaluation and the manager’s
insights on their performance
* Simple to organise and carry out and allows a two-way discussion

360 degree:
* Contains elements of all the above appraisal types
* Includes feedback from peers, subordinates and sometimes external parties, e.g. customers
* Results in detailed feedback, but is a time-consuming process

Question 6

Diversity and equal opportunities- Equal opportunities

Answer 6

Everyone acts and thinks differently depending on a complex and unique set of socio
cultural, ethnic, gender and generational, as well as other, differences and preferences

• Anti-discriminatory employment acts aim to ensure equal opportunities for everyone
  regardless of e.g. race, gender, religion etc.

Question 7

Diversity and equal opportunities- Diversity

Answer 7

The process of encouraging the employment of people from a wide range of backgrounds,
e.g. ages, beliefs and religions.

Question 8

Diversity and equal opportunities- Fairness can be thought of in two ways:

Answer 8

The moral case
The right thing to do

The business case
The best interests of the business and fair to its shareholders

Directors must strike a balance between all the stakeholder needs and fair treatment of
employees to maintain employee motivation.

Question 9

Diversity and equal opportunities- Adam’s equity theory

Answer 9

To be fair, when an employer considers how to reward an employee, including salary and
benefits, they must consider how this compares to other employees, to maintain employee
motivation

Question 10

Diversity and equal opportunities- Salomon’s research on fair pay

Answer 10

Achieving fair pay can be difficult, and each organisation and employee will have different
circumstances and needs. Salomon identified these issues to be considered:
* Employee needs and their income, e.g. some staff may feel their salary is unfair in
comparison with their outgoings
* Comparison of pay between the same roles in two different companies
* Employee’s pay compared with the profitability of the company
* Employees working in the same area on different pay
* The company’s ability to pay and its need for labour, e.g. an unprofitable company may
need to reduce its workforce to afford to pay them

Question 11

Disciplinary procedures:

Answer 11

• Most large organisations will have a formal disciplinary process
• Steps are outlined in a handbook and are typically endorsed by the trade union
• Once established, the disciplinary procedure is legally binding

Question 12

Steps of a disciplinary procedure often include:

Answer 12

An initial informal warning
* A first written warning
* A second written warning
* Disciplinary action, e.g. a demotion or enforced leave
* Dismissal

Question 12

Disciplinary sanctions should be:

Answer 12

Expected
Disciplinary actions should follow if the rules broken, and the
punishment for doing so should be well-known by the individual.

Immediate
It stops the behaviour quickly and is more likely to result in
behavioural change.

Consistent
The process must be fair, and people must be treated the same.

Impersonal
The focus should be on the ‘act’ that has resulted in a disciplinary
sanction and not the person who has carried out the act.

Constructive
The discipline should help the individual to improve on their past
performance.

Fully informed
All relevant information should be considered carefully by the
manager before proceeding with disciplinary action. If proceeding,
all relevant factors should be taken into account in the disciplinary
case.

Specific
Disciplinary action should deal specifically with the case in
question.

Follow an established
procedure
The organisation should have a clear disciplinary procedure for the
employee and manager to follow, including how much authority
the manager has.

Reinforced by self
discipline
Managers should try to implement new or adapted rules so that
employees enforce the rules upon themselves and each other,
rather than formal punishment being required.

Question 13

Break-down of disciplinary process

Answer 13

• Suspension with pay – If there is a serious concern the employee may cause further issues
  pending a serious disciplinary investigation, until the case can be resolved.
• Suspension without pay – When the employee is being punished, or if the employee
  needs to be removed from the workplace for a time following a valid disciplinary issue..
• Dismissal – If the organisation finds valid reasons for the removal of an employee.

Question 14

Grievance procedure

Answer 14

When an employee wants to address their managers’ or colleagues’ actions because they
feel they have been mistreated.

Question 15

Common methods for resolving grievances include:

Answer 15

Mediation
The two sides of the dispute informally come together to discuss the
issue, with an impartial third party to mediate, until a mutually
accepted understanding is reached.

Arbitration
The two sides of the dispute come together to discuss the issue with
an arbiter who will render a final judgement which is legally binding.

Conciliation
An independent person meets the parties separately in an attempt to
resolve their differences. This is preferable to an employment
tribunal, which is the alternative.

Question 16

Employment tribunal

Answer 16

Holds a similar legal authority to a full court with respect to making decisive rulings
regarding disputes relating to employment, but is not as formal.

Question 17

Common matters brought before employment tribunals are:

Answer 17

• Claims of unfair dismissal
• Discrimination, e.g. against gender or race
• Outstanding redundancy pay
• Unfair working hours

Question 18

Benefits of grievance procedures over employment tribunals

Answer 18

• Better for the company’s reputation and public image as tribunals are public
• Cheaper to implement grievance procedures than undertake legal action
• Often less stressful than a tribunal for all involved
• Employees are likely to see their company as a better workplace if grievances are taken
  seriously
• Less time consuming

Question 19

Instances where dismissal is deemed valid include:

Answer 19

• Misconduct: - Where an employee behaves in such a manner that it is in the best
  interests of the company to let the employee go.
• Competency and capability - When an employee is not capable of completing the
  job asked. The employee must be informed of the situation and given time and
  support to improve before this can occur.
• Breach of statutory duty - Where the company may be held in breach of legal
  obligations should they continue employment, e.g. if the employee does not have
  the right to work in the country
• Other substantial reasons – e.g. gross dishonesty or refusal to relocate
• Redundancy - Can be valid when a business scale down the size of its workforce or
  the role or business itself ceases to exist

Question 20

Constructive dismissal

Answer 20

The working environment, created for an individual by their employer, forces them to resign

Question 21

Redundancy

Answer 21

Terminating an individual’s employment because the business can no longer sustain the
workforce

Question 22

Examples of unfair redundancy situations:

Answer 22

• No consultation is given with employees
• Employees in similar roles or positions are not considered equally
• Employee is chosen for a reason not relating to the job role within the organisation

Question 23

UK’s Health and Safety at Work Act (1974)

Answer 23

This requires every organisation in the UK with five or more employees to produce a written
statement for their health and safety.
The Act requires:
* Safe operation and maintenance of the working environment, plant and systems
* Maintenance of safe access to the workplace
* Safe use, handling and storage of dangerous substances
* Adequate training of staff to ensure health and safety
* Adequate welfare provisions for staff at work
Employees have a duty under UK law to act sensibly and take reasonable care of themselves
or others and avoid creating hazards.
The Act also includes guidance for health and safety training under three categories:
Induction for new staff
All new staff must receive training to ensure their safety in both normal working conditions
and an emergency.
Monitoring safety
There is a legal requirement to notify the authorities of any incident at work resulting in
death, major injury or more than three days off work.
Prevention
To avoid accidents from occurring

Question 24

The psychological contract

Answer 24

An informal and mutually understood set of rules by which an employer and employee treat
each other.

There are three types of psychological contract:

usiness
* A co-operative contract is the most desirable of the three contracts, as it allows for
employee involvement and the employer and employee work together to achieve shared
goals.
* A calculative contract requires no input from the employee, but they will calculate the
benefits of doing extra work for the benefits gained, e.g. through overtime.
*In a coercive contract, the employee’s only incentive to work hard is to avoid punishment.
These are commonly found within custodial institutions and dictatorial organisations, e.g. in
a factory production line in factories.

Question 25

Intrinsic rewards/ Extrinsic rewards:

Answer 25

Intrinsic rewards
Rewards gained from doing the job itself, rather than rewards that come separately from
work, e.g. the moral satisfaction of doing charity work

Extrinsic rewards:
Rewards that come separately from the job itself and are determined by others, e.g. salary
or bonuses.

Question 26

There are a variety of methods for rewarding staff:

Answer 26

Basic pay
Needs to be fair and reasonable for the job to keep the employee
satisfied. Some staff may also be paid overtime for extra hours they have
worked.

Benefits
Non-financial rewards, e.g. a company car, pension scheme or gym
membership. These should appeal to all the needs of employees.

Performance-related
pay
Additional compensation to an employee based on their contribution to
the company. e.g. through commissions where sales people receive a
bonus as a percentage of sales, or profit-related pay where pay is based
on a percentage of the profit of the organisation or division.

Share schemes
Employees can be given shares as part of their package or share options
so they can buy shares in the future at a specific price.

Price rates
Payment is dependent on the worker’s output and is paid at a
predetermined fixed rate.