Developing and Managing Performance
Introduction
Managing performance is an essential element in spurring an organisation’s level of performance. Adopting effective performance management practices can significantly strengthen an organisation’s workforces’ productivity. One of the approaches through which an organisation can integrate in developing and managing performance entails reward management (Hutchinson 2013). Effective management of an organisation’s performance contributes to development of shared understanding amongst an organisation’s workforce on the goals that an organisation intends to achieve (Armstrong & Baron 2005). The rationale of developing and managing performance is to transform an organisation into a high performing entity. To achieve this goal, there are different approaches that organisations can entrench. One of the approaches entails ensuring that employees are equitably and fairly rewarded.
In an effort to promote performance, Wellton NHS Trust integrated a new performance relate performance criteria. This report entails a critical evaluation of individual performance related pay to illustrate its relevance to its relevance in enhancing the performance of the Trust. The report further examines the possible barriers that might impact the implementation and effectiveness of the IPRP and the reforms that the Trust should consider entrenching in its reward system in order to promote performance.
Relevance of the individual performance related pay
The IPRP entails a pay progression system that an organisation uses in determining the pay applicable to a particular employee. Under this system, individual employees receive financial reward that is aligned with their performance (Lussier 2012). In their search for employment opportunities, employees are attracted to firms that will ensure that they are equitably and fairly rewarded. The IPRP is founded on the premise that ensuring that employees are fairly and equitably rewarded fosters development of the right employee behaviour and that money is one of the incentives that has the potential of achieving such an outcome. Sheilds (2007) asserts that the degree of equity and fairness associated with an organisation’s reward system influences the employees’ level of satisfaction and hence their degree of motivation. Monetary remuneration constitutes one of the modes of compensation that a firm can integrate. In the course of its operation, the Trust has experienced an increase in workload, which is evidenced by overbooking of appointment by clients. In spite of effort by the Trust employees to meet the client’s needs, there has been a significant increment in the level of dissatisfaction amongst patients because of long waits. Thus, some patients have cancelled or failed to attend appointments. The Trust is yet to improve the employees’ commitment in serving clients. To overcome this problem the Trust should consider aligning the employees pay with the workload by undertaking an extensive redesigning of work structure (Fisher 2005).
Integrating IPRP in organisations operations plays a fundamental role in enhancing an organisation’s long term sustainability. This arises from the fact that the IPRP enhances the level of satisfaction amongst an organisation’s workforce. By incorporating the IPRP, an organisation creates perception of fairness in its reward system, which fosters motivation. On the basis of the IPRP, an organisation attains different types of dimensions of fairness that include distributional, interactional and procedural fairness (Lussier 2012). IPRP creates distributional fairness by ensuring that the employees’ monetary payment is aligned with their labour inputs. Procedural fairness entails how effective how an organisation has adopted the right procedure and score in determining pay increase. Conversely, interactional fairness involves ensuring that employees are fairly treated in interacting with employees.
By developing fairness in its IPRP, the Trust will significantly improve the level of employee motivation. In implementing the IPRP, the Trust has taken into account the different types of fairness, which is evidenced by the fact that the firm has entrenched automated the IPRP system. Thus, the employees pay was progressively adjusted on an annual basis depending on their performance.
The IPRP is critical in stimulating the extent to which the employees identify with the organisation in which they work (Lockwood 2004). A positive identification with an organisation means that the employees will not develop intentions to leave the firm. Therefore, integrating IPRP in the Trust will play an essential role in diminishing possible loss of talent through voluntary job turnover. According to Honkapohja and Westermann (2009), loss of talent is one of the major issues that threaten an organisation’s long term sustainability. The outcome of this aspect is that the organisation will be able to achieve long term competitiveness with reference to the strength of its human capital.
Apart from minimising potential loss of talent, integration of the IPRP will contribute to remarkable improvement in the organisation’s attractiveness to potential job candidates. According to Hutchinson (2013), growth in an organisation’s attractiveness in the labour market increases the likelihood of a firm developing future competitiveness by developing a strong human capital base.
Improvement in the employees’ level of satisfaction and motivation will contribute to improvement in their level of productivity. Lussier (2012) argues that a motivated workforce is more efficient and effective in executing the assigned job roles and responsibilities. The IPRP is operationalised by ensuring that the employees’ pay is determined by assessing the effectiveness and efficiency with which the employees accomplish their job roles and responsibilities. Hutchinson (2013) asserts that growth in the level of individual employee productivity will contributes to reduction in the cost of production. Armstrong and Baron (2005) associates the low cost of production with the fact that minimal effort is required in supervising employees. Through implementation of the IPRP, the Trust will succeed in nurturing a culture of performance, which increases the probability of the Trust attaining long-term sustainability. Moreover, an organisation’s competitiveness is improved through provision of high quality products and services.
Barriers to the effective design and implementation of IPRP schemes
In spite of the benefits associated with implementation of the IPRP, it is imperative for the Trust to ensure that integration of the IPRP is effectively undertaken. In doing so, the firm’s management team should be conscious of the possible barriers in designing and implementing the IPRP scheme. One of the major barriers entails ineffective definition of the job goals and responsibilities. Rose (2014) identifies setting job targets that are beyond the employees’ capacity to meet as one of the major barriers of the IPRP schemes. The employees’ inability to achieve the high targets set means that their promotion to the next pay grade is significantly limited. This might create employee dissatisfaction and de-motivation hence negatively impacting the firm’s overall performance.
In addition to the above barriers, establishing an IPRP entails a complex process. This assertion is supported by Honkapohja and Westermann (2009) who affirms that designing an individualised IPRP model presents a daunting task as opposed to assessing group performance. Moreover, Honkapohja and Westermann (2009) affirm that it is relatively difficult to measure an individual performance. Consequently, some employees might perceive the scheme to be ineffective if they perceive that the monetary reward received do not commensurate with their labour input. Perception of unfairness might culminate in serious disputes between an organisation’s top management team and their subordinates (Wright 2004).
Alternative approaches to IPRP
In order to gain the benefits associated with integration of IPRP, it is imperative for the Trust’s management team to ensure that effective approaches in managing IPRP are entrenched. In addition to the IPRP, the Trust’s management team should focus on entrenching other aspects in its reward management system. In improving its reward system, the firm’s management team should ensure that both monetary and non-monetary dimensions of performance are entrenched. Integration of monetary and non-monetary benefits will enable the Trust to address the gaps inherent under the current IPRP. An internal analysis of the Trust’s reward policy shows existence of significant gaps with reference to its effectiveness in maximising employee satisfaction. For example, a significant proportion of employees affirmed that they are not dully satisfied with the degree of recognition received on good work done. Moreover, the review showed that most employees are of the perception that the organisation does not value their work. The prevalence of these perceptions might negatively affect the employees’ motivation and productivity.
To overcome these limitations in the company’s reward policy, the Trust’s management team should consider adjusting its reward policy by entrenching non-monetary dimensions in the reward system. In the process of entrenching the non-monetary dimension, the Trusts management team should take into consideration different dimensions that include employee job promotion, recognising employees for their exemplary performance, provision of paid-work leaves and medical allowances. Similar to the firm’s IPRP which is undertaken annually, the Trust’s management team should design an annual event aimed at recognising employees who have performed exemplary annually. Entrenching such an event is may play an essential role in nurturing an internal organisational culture that is inclined towards achieving high performance. Thus, the organisation will be transformed into a high-performing entity.
Conclusion
In implementing the IPRP, the Trust should ensure that the elements of equity and fairness are entrenched. This will play a fundamental role in nurturing development of satisfaction amongst employees hence improving their motivation. Integration of the IPRP will also enable the Trust to be attractive to potential employees hence strengthening competitiveness in the labour market. To be effective, the IPRP should be effectively designed in order to enhance its value to the organisation. Moreover, the firm should consider developing and managing performance by entrenching non-monetary dimensions of improving employee performance.
Reference List
Armstrong, M & Baron A 2005, Managing performance: performance management in action, CIPD, London.
Honkapohja, S & Westermann, F2009, Designing the European model, Palgrave Macmillan, Basingstoke, New York.
Hutchinson, S 2013, Performance Management: Theory and Practice, CIPD, London.
Fisher, JG 2005, How to run successful incentives schemes, Kogan Page, London, UK.
Lockwood, N 2004, ‘Maximizing human capital: Demonstrating HR value with performance indicators’, Society for Human Resource Management Quarterly, vol. 3, no. 4.
Lussier, R 2012, Management fundamentals; concepts, applications, skill development, South Western, Mason, Ohio.
Rose, M 2014, Reward Management, Kogan Page, London.
Sheilds, J 2007, Managing employee performance and reward, Cambridge University Press, Cambridge.
Wright A 2004, Reward Management in Context, CIPD, London,
