Performance management is a communication process in which managers and the staff work jointly to plan, monitor, and review the employees’ work objectives and overall contribution to the company. The process is continuous because it involves setting goals, assessing progress, and training the workers and providing feedback to make sure they remain focused on their destinations and career objectives. Also, performance management in an organization is a continuous process as it involves several steps. It is a continuous cycle of planning, coaching, and reviewing the employees’ performance. Managers need to provide honest and constructive feedback to employees who are not meeting performance expectations.
The planning phase is essential in developing the working criteria between managers and employees. The employer reviews the job description of the worker to determine if it aligns with their current work. Moreover, the manager recognizes and audits the employee’s work arrangement and work depiction to ensure it adjusts with the organizational objectives. Next, the manager formulates a work layout that outlines the tasks and deliverables needed, the favored results, and the standards used to consider overall performance The phase identifies the training objectives to ensure that employees grow their skills, knowledge, and competencies in their work.
Managers need to coach their employees regularly to address concerns and issues related to performance. Moreover, coaching ensures that the workers contribute positively to the company. Therefore, the managers meet the employees to assess the progress made towards achieving the set performance goals. As such, the manager can identify the barriers preventing employees from attaining the set targets and come up with effective solutions. A manager might decide to make several changes in the employees’ work plan to ensure their responsibilities match with the organization’s priorities.
This phase provides an opportunity for managers to review, summarize, and highlight the employees’ performance over a specific period. An effective manager reviews performance management notes before assessing an employee’s accomplishment. The phase involves summarizing the work accomplished by a specific worker relative to the set goals (Aguinis, 2009). Documenting the encountered challenges can help the manager to identify key areas that require training and development among employees. The platform provides an opportunity for employees and the manager to discuss unforeseen barriers that can hinder the achievement of set goals.
The steps taken by the franchise owners to improve the performance of sales representatives led to several positive impacts. The first step of conducting a job analysis helped in identifying the roles of the sales representatives. Also, adopting a franchise-wide mission statement that promotes high-quality customer service was excellent. Engaging the employees at different franchise offices and elaborating their roles in achieving their mission was a great step in ensuring they understand their roles and contribution. Moreover, setting the performance goals for each employee and providing extensive training was great. Training refines the skills, knowledge, and abilities of employees hence improve their overall performance. Setting goals for the employees challenge them to work harder to achieve the expected results.
The performance management process adopted by Omega Inc. was faulty in several areas. First, the company failed to incorporate the coaching phase in the process. The phase is crucial as it gives managers a chance to address concerns and issues related to the performance of employees. The stage would help the managers to identify barriers and formulate effective solutions to overcome them. Also, employees could not track their progress towards attaining their set quota levels. Providing a monitoring system is essential as employees can gauge their performance and efforts towards the expected results. The lack of a clear link between the performance of employees and associated rewards demotivated them. Furthermore, there lacked a performance appraisal to track individual performance in the implemented management process. As a result, employee performance levels declined afterward as there was no quantifiable measure to track their achievements. The worker’s performance levels declined as the manager failed to put in place an approach for recording individual performance.
A reward system refers to all the mechanisms that a company employs to distribute both tangible and intangible returns to motivate employees in the workplace. The returns can vary from base pay to income protection, allowances, and relational returns. Effective application of the pay-per-performance system produces a high return on investment from compensation by rewarding top performers. In the case of Omega Inc. and the franchise owners, a performance-based pay rewarding system will lead to increased performance of the sales representatives. The base pay has a high degree of motivating the employees to improve their performance unlike the cost of living adjustment. Currently, the implemented performance management process failed to incorporate a rewarding system. As such, the performance levels of employees declined thus lead to a decrease in the recorded sales despite the changes.
Employing a variable pay in the workplace whereby employees earn according to their performance levels can significantly impact their productivity. The approach eliminates the entitlement mentality among employees. The rewards can range from gain sharing to bonuses, team-based incentives, or profit sharing. The franchise owners can implement the base pay reward system by linking rewards with performance to lure employees to work harder. The system ensures that only high performers reap the benefits of their work (Madhani, 2010). The leadership and culture of an organization determine the effectiveness of a reward system. It is crucial for the managers to ensure that the rewards are relevant and valued by the employees. As such, employees will be willing to increase their performance as they find rewards beneficial. However, the rewards might not impact the organization positively; thus, there is a need to identify the undesirable consequences of administering a reward to ensure that it leads to the desired results.
An effective performance management system that will increase the effectiveness of the proposed rewarding system should comprise various steps. First, the manager should review the sales representatives’ job description to ascertain it reflects their current roles. Reviewing the connection between the job description and the goals of the organization will help to ensure that they align. Secondly, the manager should assess the progress made by the sales agents towards achieving the organizational objectives. Managers should identify the barriers preventing the sales representatives from accomplishing the set quotas and come up with effective remedies. Moreover, they should provide employees with regular feedback regarding their performance relative to their goals. Lastly, managers should review the sales representatives’ productivity against the set goals at the beginning of the performance period. Next, they should reward the employees that display improvement through increased sales. Managers should employ calibration techniques and multiple metrics to ensure that only performers are rated highly.
Aguinis, H. (2009). Performance management. Upper Saddle River, NJ: Pearson Prentice Hall.
Madhani, P. M. (2010). Rebalancing fixed and variable pay in a sales organization: A business cycle perspective. Compensation & Benefits Review, 42(3), 179-189.
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