HRD&OB
Unit 3Performance management systemQ1: Define Performance Management System.Ans: Performance management system is the systematic approach to measure the performance of employees. It is a process through which the organization aligns their mission, goals and objectives with available resources (e.g. Manpower, material etc), systems and set the priorities. The execution administration framework is a constant procedure of characterizing and conveying the activity parts and duties, execution desires, goals and set their needs between boss (administrator) and subordinates (workers). It incorporates association, office and representative shared objective and targets which are lined up with frameworks and assets. It is the channel of providing clarity about goals and also to improve the business processes through various methods and mechanism.The competency, skills and knowledge gaps are also identified through this process which can be improved by providing guidance, trainings, coaching and mentoring to employees or teams at different levels and designations. It optimizes the results through a roper channel and process which reduces the conflicts and grievances among teams or employees. Because each individual is clear about the expectations from his/ her role and put their efforts to meet performance standards.This process can be applied to single department / function or to whole organization. It aims to continuously monitor and measure the performance standards against the desired goals and objectives.Q2: What are the Principles of Ethics in Performance Management?Ans: Principles of Ethics in Performance ManagementThe key principles of ethical performance management are as follows:An ethical performance management system directs its employees to respect the core values of the organization. Because the ethics practiced by the organization is in conjunction with its environment. On the other side, the organization respects its employees and provide good working environment so that they will generate the result as per the potential. This system is designed to make transparency in its operation and all the parties involved in performance management system respect each other’s needs, values, and preoccupations. It emphasizes individual responsibility for personal decision making, behaviour, and action rather than collective responsibility. This system put emphasis on employees respecting and actively considering the ethical concerns and issues of all stakeholders, rather than focusing merely on shareholders alone. This seeks to build or change culture to a state in which the vision of the organization includes its employees, its customers, and the society at large. The values and norms of organization support employee’s decision making, behavior, and actions consistent with an ‘ethical’ vision. This system provide fair and free environment to its employees so that employees can get the opportunity to scrutinize the basis upon which the important decisions were made. Q3: How to develop Code of Ethics?Ans: Developing Code of EthicsThe key guidelines to maintain an ethical performance management system in the organization are given below:HR Responsibility: In organizations, the HR professionals are responsible for adding value to by developing HR functions. They are also responsible for maintaining the balance between performance improvement and ethical behaviour in the organization. The HR professionals shall act as ethics custodians and train and develop human resources for dealing effectively with relationship issues of morality, integrity, and honesty with other stakeholders particularly customer, suppliers, and society at large.2. Developing Standards: Human resource professionals must strive to meet the highest standards of competence and ethics. The purpose is to keep abreast of organizational strategy, mission, and objectives on a continuous and consistent basis. They must drive ethics training of top managers and employees on a wide scale. They have to educate them on the significance of ethics in attaining high-performance standards. The HR professionals shall transmit ethics to employees, managers, and external stakeholders through performance management system.3. Ethical Leadership: In making performance management a truly business-aligned, transparent, and credible management endeavor, human resource professionals must exhibit individual leadership. They should act as ethics communicator to improve the situation for their organizations.4. Fairness and Justice: For employee’s work achievements and their contribution in improving organizational competence and performance, there should be fairness and justice in respect of rewards and recognitions. Human resource professionals are ethically responsible for promoting fairness and justice in the organization and they must enable a culture where ethical behaviour and action is a key performance criterion.5. Conflict Management: They must safeguard the interest of all stakeholders to eliminate the conflict arising between manager-employees, employer-employee and employees-organization on certain issues related to rewards and recognition etc.6. Transferring Information: The human resource professionals should ensure truthfulness of communication. It should be in respect of performance feedback and counselling and help top leadership in taking informed personnel decision.Q4: What are the methods of Performance Appraisal?Ans: 1. The 360-Degree AppraisalThis method involves giving out a questionnaire with questions regarding the performance of a colleague and they need to fill it up. This feedback can be considered by the manager while evaluating the performance at the end of the quarter/year.2. General Performance AppraisalThis method involves continuous interaction between the employee and his manager continuous setting of goals and achieving them. Whether the employee has been able to do justice the entire process or not is evaluated at the end of the year.3. Technological/Administrative Performance AppraisalThis appraisal technique concentrates on technical more than any other aspect of performance on the job as the employees involved have specialized skills. They’re judged on the skills they possess and the activity they complete.4. Manager Performance AppraisalThe performance of a manager should also be appraised and this includes not just his/her performance on the job but also relationship management with clients at his/her disposal. Generally, anonymous feedback forms are received which are then considered for appraisal.5. Employee Self-AssessmentThis method is very unpopular among employees as nobody can deal with rating himself or herself. The self-assessment sheet is compared with the one filled up by the manager and the differences are discussed.6. Project Evaluation ReviewThis method involves performance appraisal of the team members involved at the end of every project and not at the end of every year. This helps the team and its members develop with each passing project.7. Sales Performance AppraisalA salesperson is evaluated on the basis of his/her sales skills and accomplishment of financial goals set previously. Goals set in case of sales should be realistic and ways of achieving them should be decided by the employee and the manager concerned.Q5: Write a note on rating errors.Ans: In conducting performance appraisals, managers must be careful to avoid making rating errors. Four of the more common rating errors are strictness or leniency, central tendency, halo effect, and recency of events.Strictness or LeniencySome supervisors tend to rate all their subordinates consistently low or high. These are referred to as strictness and leniency errors. The strict rater gives ratings lower than the subordinate deserves. This strictness error penalizes superior subordinates. The lenient rater tends to giver higher ratings than the subordinate deserves. Just as the strictness error punishes exceptional subordinates, so does the leniency error. Strictness- leniency bias presents less of a problem when absolute standards and results-oriented approaches to performance appraisal are used. Central TendencySome raters are reluctant to rate subordinates as very high or very low. They dislike being too strict with anyone by giving them an extremely low rating, and they may believe that no one ever deserves to get the highest possible rating. The result of this type of attitude is that everyone is rated around average. Halo EffectWhen a single positive or negative dimension of a subordinate’s performance is allowed to influence the supervisor’s rating of that subordinate on other dimensions, a halo effect is operating. For example, the supervisor likes Tom because he is so cooperative. The halo effect leads Tom’s supervisor to automatically rate him high on all appraisal dimensions, including leadership, management, personnel administration, administrative teaming, and even budgeting. The result is that subordinates are rated consistently high, medium, or low on all performance appraisal dimensions.Recency of EventsIdeally, performance appraisals should be based on data collected about a subordinate’s performance over an entire evaluation period (usually six months to a year). However, as is often the case, the supervisor is likely to consider recent performance more strongly than performance behaviors that occurred earlier. This is called the recency of events error. Failure to include all performance behaviors in the performance appraisal of a subordinate can bias the ratings.Strictness or leniency, central tendency, halo effect, and recency of events all result in inaccurate performance appraisals of employees. The absolute standards and results-oriented approaches to performance appraisal, particularly BARS and goal setting, attempt to minimize such rating errors.Q6: What are the factors that influence industrial relations?Ans: The industrial relations system of an organisation is influenced by a variety of factors.A few important are:1. Institutional factors2. Economic factors3. Social factors4. Technological factors5. Psychological factors6. Political factors7. Enterprise-related factors8. Global factorsThese interrelated and interdependent factors determine the texture of industrial relations in any setting. In fact, they act, interact, and reinforce one another in the course of developing the industrial relations.1. Institutional Factors:Under institutional factors are included items like state policy, labour laws, voluntary codes, collective bargaining agreements, labour unions, employers’ organisations / federations etc.2. Economic Factors:Under economic factors are included economic organisations, (socialist, communist, capitalist) type of ownership, individual, company — whether domestic or MNC, Government, cooperative ownership) nature and composition of the workforce, the source of labour supply, labour market relative status, disparity of wages between groups, level of unemployment, economic cycle. These variables influence industrial relations in myriad ways.3. Social Factors:Under social factors items like social group (like caste or joint family) creed, social values, norms, social status (high or low) — influenced industrial relations in the early stages of industrialisation. They gave rise to relationship as master and servant, haves and have-nots, high caste and low caste, etc. But with the acceleration of industrialisation, these factors gradually lost their force but one cannot overlook their importance.4. Technological Factors:Under technological factors fall items like work methods, type of technology used, rate of technological change, R&D activities, ability to cope with emerging trends, etc. These factors considerably influence the patterns of industrial relations, as they are known to have direct influence on employment status, wage level, collective bargaining process in an organisation.5. Psychological Factors:Under psychological factors fall items pertaining to industrial relations like owners’ attitude, perception of workforce, workers’ attitude towards work, their motivation, morale, interest, alienation; dissatisfaction and boredom resulting from man-machine interface. The various psychological problems resulting from work have a far-reaching impact on workers’ job and personal life, that directly or indirectly influences industrial relation system of an enterprise.6. Political Factors:The political factors are political institutions, system of government, political philosophy, attitude of government, ruling elite and opposition towards labour problems. For instance, the various communist countries prior to the adoption of new political philosophy, the industrial relations environment was very much controlled by the Government ever since change has altered considerably like other capitalist economics.There too, unions are now at the helm of labour activities, the industrial relations and is marked by labour unrest. Most of the trade unions are controlled by political parties, so here the industrial relations are largely shaped by the gravity of involvement of political parties in trade union activities.7. Enterprise-Related Factors:Under enterprise-related factors, fall issues like style of management prevailing in the enterprise, its philosophy and value system, organisational climate, organisational health, extent of competition, adaptability to change and the various human resources management policies.8. Global Factors:Under global factors, the various issues included are international relations, global conflicts, dominant economic-political ideologies, global cultural milieu, economic and trading policies of power blocks, international trade agreements and relations, international labour agreements (role of ILO) etc.Q7: What is collective bargaining?Ans: Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.The union may negotiate with a single employer (who is typically representing a company's shareholders) or may negotiate with a group of businesses, depending on the country, to reach an industry-wide agreement. A collective agreement functions as a labour contract between an employer and one or more unions. Collective bargaining consists of the process of negotiation between representatives of a union and employers (generally represented by management, or, in some countries such as Austria, Sweden and the Netherlands, by an employers' organization) in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions, grievance procedures, and about the rights and responsibilities of trade unions. The parties often refer to the result of the negotiation as a collective bargaining agreement (CBA) or as a collective employment agreement (CEA).Q8: What is WPM?Ans: Like other behavioural terms, WPM means different things to different people depending upon their objectives and expectations. Thus, WPM is an elastic concept. For example, for management it is a joint consultation prior to decision making, for workers it means co-determination, for trade unions It is the harbinger of a new order of social relationship and a new set of power equation within organisations, while for government it is an association of labour with management without the final authority or responsibility in decision making.Let us also go through some important definitions of WPM.According to Keith Davis, “Workers’ participation refers to the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share in responsibility of achieving them”.In the words of Mehtras “Applied to industry, the concept of participation means sharing the decision-making power by the rank and file of an industrial organisation through their representatives, at all the appropriate levels of management in the entire range of managerial action”.Q9: What are the characteristics of WPM?Ans: The following are the main characteristics of WPM:1. Participation implies practices which increase the scope for employees’ share of influence in decision-making process with the assumption of responsibility.2. Participation presupposes willing acceptance of responsibility by workers.3. Workers participate in management not as individuals but as a group through their representatives.4. Worker’s participation in management differs from collective bargaining in the sense that while the former is based on mutual trust, information sharing and mutual problem solving; the latter is essentially based on power play, pressure tactics, and negotiations.5. The basic rationale tor worker’s participation in management is that workers invest their Iabour and their fates to their place of work. Thus, they contribute to the outcomes of organization. Hence, they have a legitimate right to share in decision-making activities of organisation.Q10: What are the objectives of WPM?Ans: The objectives of WPM are to:1. Promote mutual understanding between management and workers, i.e., industrial harmony.2. Establish and encourage good communication system at all levels.3. Create and promote a sense of belongingness among workers.4. Help handle resistance to change.5. Induce a sense among workers to contribute their best for the cause of organisation.6. Create a sense of commitment to decisions to which they were a party.
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