Professional Documents
Culture Documents
Columbia College
Columbia College
https://www.slideshare.net/TufailAhmed/performance-23451855
Prentice Hall, Inc. 2006
Elements :
Information : how the system works
Motivation : what’s in it for me
Identifying, observing, recording, and evaluating performance
How to interact with employees when they receive information
2. Recent research revealed one important finding that most managers rely on balance of
subjective (66%) and objective (71%) data in performance review
Management experts have debated for decades the most useful way to assess employee
performance. In today's businesses, employers tend to rely on a mix of subjective and objective
measures as part of a larger performance measurement process. Each measurement method
has its strengths and weaknesses. An objective measurement typically defies interpretation:
Either an employee was late five times or she wasn't, or he met his widgets-per-hour target or
he didn't. For that reason, some employers use purely objective measures for employees who
have repetitive or entry-level jobs--performance is a function of doing (or not doing) some
specific action, or in meeting per-product or per-service productivity totals. Some jobs cannot be
easily measured. Data analysts, attorneys and dolphin trainers each perform a job that is
difficult to distill into a few discrete metrics. Therefore, employers will determine categories of
measurement--for example, customer service or teamwork or professionalism. Supervisors
typically offer a numeric score that represents the employee's perceived performance in that
category, but the question of whether a specific rating is "correct" is primarily a matter of
interpretation. Objective measures work best in situations where each employee can be
assessed directly and each employee's performance can be meaningfully compared to another
employee. For example, it is inappropriate to give part-time and full-time employees the same
total-parts-per-month score. However, objective measures fail when supervisors distill complex
processes into a single score that may not have much meaning in the real world. For example,
attorneys should not be measured on the quantity of legal briefs they file each month.
Subjective measures are very good at allowing a supervisor to exercise judgment about an
employee's performance in complicated systems. However, if the employer/employee
relationship is sour, employees may see a negative rating as either punitive or unfair. Some
employers employ a hybrid evaluation system. Some measures are objective, and some are
subjective. A supervisor might give a score for her perception of an employee's overall
professionalism but provide objective scores for the number of unplanned absences or
customer complaints. Or, a boss might assess 50 percent of an employee's performance based
on objective measures and 50 percent on "commitments" or "standards" or some other
subjective measure of quality. Because there is no right way to measure employee performance,
small-business owners should develop an assessment system that matches their industry
standard and typical employee work. For example, a cell-phone sales company might measure
the total dollars of product sold by sales rep and score them based on whether they met certain
goals--or a small marketing agency might solicit feedback from an account manager's clients to
determine an appropriate performance score.
4. Realisasi system pay systems need to be tied to the strategic mission of an organization, and
they should take their direction from that strategic mission
In order to integrate its compensation system with its general business strategy, firms must (a)
make the pay system an integral part of the strategy formulation, they must (b) integrate pay
considerations into strategic decision-making process, and (c) view the firm’s performance as
the ultimate criterion of the success of the merger
Page 394-395 :
1. Recognize compensation as a pivotal control and incentive mechanism that can be used
flexibly by management to attain business objectives
2. Make the pay system an integral part of strategy formulation
3. Integrate pay considerations into strategic decision-making process
4. View the firms performance as the ultimate criterion of the success of strategic pay
decisions and operational compensation programs
1. Your expectations for the sale. Do you wish to turn over your business to your
employees, even if it means potentially leaving money on the table? Selling your business to an
ESOP will almost always net fewer proceeds than if you were to sell to a third party. It’s likely
there will also be more costs associated with becoming an ESOP than with a third-party sale.
2. The size of your company. To make the cash flow and annual retirement contribution
limitations work, you must have enough employees, annual revenue, and net income. An
accepted rule of thumb for establishing an ESOP is to have at least 20 employees who are
qualified to participate in the ESOP and annual revenues of at least $10 million. For this reason,
it’s important to perform an ESOP feasibility analysis before you get too far into the process.
3. The strength of your management team. After you exit the business, who will take the
reins? Having a strong management team in place—before you establishing your ESOP—will
make the whole process go much more smoothly and likely increase your sale price.
4. Your employee turnover rate.If your business has a high employee turnover rate, an
ESOP may not be the right choice. Employee continuity is important for a successful ESOP.
Without consistent employee numbers and leadership, an ESOP may not be a good fit.
Is employee ownership an option for your business?The benefits associated with ESOPs apply
only in the right situation. Before you decide to implement an ESOP, do your homework. Make
sure it’s the right call for you, your family, and your employees.
This may be one of, if not the main reason workplace loyalty has experienced a dramatic fall.
Millennials are a generation widely considered to be “entitled” or “self-absorbed,” and if a
certain employer is not meeting their professional or financial goals, they have no problem
moving on to another company who will meet them. Whereas previous generations may
have stuck it out until a raise was granted, younger workers may not have the patience to
do so.
The solution is greater transparency between employer and employee. The goals and
expectations of both parties should be clearly expressed at the time of hire and readdressed
after a predetermined amount of time. Employers who are open to discussing these issues
with their staff will likely see a rise in employee loyalty, and a fall in job-hopping.
We’ve discussed this in the past, but it bears repeating: quality managers are a big part of
keeping employees happy. A poor manager may disrupt workplace morale or camaraderie
and be directly correlated with your employee’s decision to leave. In fact, 17% of
workers quit due to management problems, a figure that is much too high.
The solution here is an emphasis on hitting managerial hires out of the park. Managers who
keep lines of dialogue open with their team will foster a more accommodating atmosphere
in which better work can be delivered. Performance reviews that include the opinions of the
employees that they manage will also help develop a better picture of the type of leader a
certain manager is.
Wharton management professor Adam Cobb sees the declining loyalty as a symptom of an
evolving relationship between organization and employee. Cobb sees employee behavior
being influenced from the major organizational restructuring that began thirty years ago.
“Firms have always laid off workers, but in the 1980s, you started to see healthy firms laying
off workers, mainly for shareholder value. Firms would say ‘We are doing this in the long-
term interest of our shareholders,’” Cobb noted. “You would also see cuts in employee
benefits — 401(k)s instead of defined benefit pensions, and health care costs being pushed
on to employees. The trend was toward having the risks be borne by workers instead of
firms. If I’m an employee, that’s a signal to me that I’m not going to let firms control my
career.” Basically, if a company does not take care of its employees, it can’t expect those
workers to stick around for long.
The solution here is as simple as remembering The Golden Rule. Employees who are working
full-time but receiving poor benefits will feel disrespected, and they will begin searching
elsewhere. It’s no surprise that the companies that provide the most perks to their
workforce also have the best employer brand.