performance and reward Flashcards

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1
Q

what is meant by appraisal? (Heery and Noon, 2001)

A

“the process of evaluating the performance and assessing the development/training needs of an employee”

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2
Q

what is meant by appraisal? (Redman and Wilkinson, 2002)

A

“the review of an employee’s performance, typically conducted by the immediate line manager”

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3
Q

what are the aims of performance management (Armstrong, 2020)

A

Armstrong compiled a number of performance management aims, including:
- empowering, motivating and rewarding employees to do their best
- aligning the goals of employees with the ones of the organisation
- supporting the employees to develop the right skills following suitable training methods
- managing and resourcing performance according to agreed standards and objectives
- maximising the potential of employees through their development

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4
Q

what is the development of performance appraisal?

A
  • informal systems have been around for as long as people have worked together
  • Grint (1993) - formal appraisal in China in the 3rd Century
  • most commonly adopted HR practices
  • changes in payment related to rewards and performance related pay
  • US -> UK -> South East Asia
  • Prominent in UK financial services
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5
Q

what is performance appraisal used for? (Bowles and Coates, 1993; IDS, 2007; IRS, 1994, 1999)

A
  • team and corporate performance
  • clarifying and defining performance expectations
  • assessing competencies
  • get rid of poor performers
  • allocating financial rewards
  • setting pay
  • succession planning
  • determining promotion
  • maintain loyalty
  • identifying training and development needs
  • coaching and mentoring
  • improving the individual
  • facilitating communications and involvement
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6
Q

what are the benefits of appraisal?

A

“Increase motivation, foster productivity, improve communications, encourage employee growth and development and help solve work‐related problems…[and] a systematic basis for compensation, promotion, transfer, termination and training and development” (Longenecker and Gioia, 1988, 41).

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7
Q

how is appraisal conducted?

A
  • small scale low budget vs large scale and complex
  • usually centrally designed by HR
  • each line manager appraises their staff
  • usually each year
  • usually in the context of a meeting - before, during, after
  • a legal and formal basis for promotion, pay and redundancy decisions
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8
Q

what is being appraised?

A
  • performance against taregts
  • quality of work
  • attendance and timekeeping
  • safety awareness
  • percpetion
  • originality of thought
  • judgement
  • job knowledge and abilities
  • attitude to work
  • interaction with others
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9
Q

what is the goals setting theory?

A

conceptual foundation of performance management
- goals are seen as motivators
- clarity of goals is key to understanding expectations
- goals must be set participatively and feedback given
Vroom (1964) expectancy theory:
- individuals motivated to act provided they expect to achieve goals set
- belief that achieving goals will lead to rewards
- belief that rewards on offer are valued

effort->performance->reward

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10
Q

what is the performance appraisal process?

A
  • objectives of performance appraisal
  • establish job expectations
  • design on appraisal program
  • appraise performance
  • performance interview
  • archive appraisal data
  • use appraisal data for appropriate purposes
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11
Q

what is the performance management process?

A
  1. planning - set goals and define SMART metrics
  2. monitoring - track progress regularly and mitigate obstacles
  3. reviewing - evaluate process and the final results
  4. rewarding - give recognition and reward good performance
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12
Q

types of appraisal

A

upward
360 degree
customers
team

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13
Q

how does it work appraising volunteers?

A
  • community sports organisations - volunteer appraisal not common (Cuskelly et al., 2006)
  • these orgs usually run by volunteers
  • may weaken the social needs of the volunteers
  • bureaucracy and control

however, volunteers want feedback on their performance and guidance of what is expected of them (Taylor, Darcey, Hoye and Cuskelly, 2006)

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14
Q

what are critisms of the performance appraisal of the process/system?

A
  • expensive
  • process dominates
  • bureaucratic
  • appraisal forms not living
  • poor performance neglected until next appraisal
  • encourages short-termism
  • used for development and pay which conflict
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15
Q

what are critisms of the performance appraisal subject to ‘political’ manipulation?

A
  • building evidence for termination
  • punish challenging employees
  • ‘scare’ better performance out of people
  • giving good rating to poor performers to get them promoted out of the department
  • impact on the relationship between line manager and employee
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16
Q

what are the current issues in reward management?

A
  • Reward traditionally linked to pay
  • Financial and non-financial
  • Can account for over half an organisations costs
  • One of biggest employee issues
  • Impact of getting it wrong
  • Reward systems becoming more explicitly articulated
  • Decline in trade unions - move from national collective bargaining to being determined much more by the employer
  • Internationalisation of the workforce
17
Q

how should package payment be made up?

A
  • what are we seeking to achieve with our payment systems
  • what constraints affect our reward systems
  • what are our competitors doing? ‘mimetic’ (Paauwe, 2004)
  • how can we avoid demotivating employees?
  • how do we wish to position ourselves?
18
Q

what are employer objectives in regard to the case for reward?

A
  • attracting staff
  • retaining staff
  • motivating staff
  • driving change
  • corporate reputation
  • affordability
19
Q

what are the employee objectives in regard to the case for reward?

A
  • purchasing power
  • fairness and rights
  • recognition
20
Q

what are the elements of payment?

A
  • basic
  • plumage
  • benefits
  • premia
  • overtime
  • incentive
  • bonus
21
Q

what is incentive based pay?

A
  • expectancy theory
  • positive outcome for both employee and employer
22
Q

what are the ways incentive payment schemes can operate?

A

rewards a group of employees for collective performance vs reward for individual performance

23
Q

what are the 2 types of PRP scheme?

A

100% performance-related
fixed and variable

24
Q

what is 100% performance-related PRP scheme?

A
  • sales - achievement of targets
  • not hours worked or level of experience
25
Q

what is fixed and variable type of PRP scheme?

A
  • call centre or factory work
  • fixed basic salary plus performance bonus
  • pay determined by grade, experience and output
26
Q

what is the effectiveness of incentives?

A

Evidence is mixed:
Some studies show links between superior performance
(Lazear, 2000)

Other studies show no link
(Pearce et.al. 1985; Thompson 1992; Makinson 2000; Marsden 2004; Marsden and French, 1998)

Not universally, but can enhance performance where the conditions are right

27
Q

what are the favourable conditions for using PRP?

A

when:
1. individual performance can be objectively and meaningfully measured
2. individual has control of their outcomes
3. team working or cooperation is not central
4. where there is an individualistic organisational culture (Gomez-Mejia and Balkin 1992: Marsden, 2007)

employees motivated only if…
- they agree with principles of the system
- perceived to be fair
- clear and achievable targets
- bonus is significant

28
Q

what are the critiques of PRP?

A
  • identifying quantifiable measures can be difficult
  • feedback can be demotivating
  • factors outside employees’ control
  • difficult to be objective
29
Q

why did Pink (2011) say PRP don’t work?

A
  1. can extinguish intrinsic motivation
  2. can diminish performance
  3. can crush creativity
  4. crowd out good behaviour
  5. encourage cheating, shortcuts and unethical behaviour
  6. become additive
  7. foster short term thinking
30
Q

what are advantages and disadvantages of profit sharing?

A

promoted by government for many years
- increases employee commitment
- encourages employee to work harder
- cost flexibility and changed attitudes

disadvantages
- pay levels may decline if company fails to meet expected profit levels
- share values can go down as well as up
- incentive effort may be slight

31
Q

what are the principles of total reward?

A
  • combine different forms of employee reward together
  • people motivated by more than money
  • use of both extrinsic and intrinsic motivations
  • driven by increased competition while retaining quality and tight labour markets
  • most common in large, private sector companies
32
Q

what are some key behaviour considerations for pay and reward professionals

A
  1. they have an emotional and subjective component
  2. preferences and satisfaction level in relation to reward are dynamic, not fixed.
  3. pay and reward also has a social context, valuing not only our individual need but make comparison to others
  4. implications of pay and reward are highly complex, need to assess future needs as well as present
  5. financial or similarly tangible incentives may crowd out people’s motivations
  6. money may have powerful effects on behaviours, more so than those engendered by other rewards of equivalent value.
  7. complexity around reward decisions means people use shortcuts which influence their decision-making.
  8. choices in benefits may be responded to as cost rather than opportunity, so should be meaningful and limited
  9. deferred reward implies sacrificing immediate consumption for a future reward.
  10. risk and uncertainty in reward may reduce subjective value that employees place on it and can affect their behavioural responses.