UNIT: MANAGING PEOPLE & ACTIVITIES Royal Agricultural College Modular Scheme Cirencester College...

UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007

Managing People and Activities – Managing Performance (3)

Week 3


Last week Identified key skills necessary to work effectively with others

Explained how to deliver work to agreed standards and within deadlines

Explored range of appropriate communication mechanisms useful when working with others Accurately defined the principles of flexible working with reference to work covered within HRM module


Learning ObjectivesBy the end of the session, students should be able to:-

Demonstrate understanding of the benefits of using best practice appraisal techniques

Accurately state the statutory steps of the Dismissal, Disciplinary and Grievance Procedure outlined in the Employment Act 2002

Apply the principles of the DDP to a case study


Activity

Working in groups, and with reference to work covered in the

HRM module prepare your definitions of

Performance Management

Appraisal


Difference between Appraisals and Performance Review


Performance Appraisal

• Managers judging subordinates on (often subjectively) – What they achieve– What they do– What they are

• Usually categorised into 3 types –– Performance reviews– Potential reviews– Reward reviews

• Historically, a ‘top down’ process run in isolation by personnel department

Appraisal consists of…..

Often cited by HR and managers as an area in need of improvement – but if conducted properly appraisals are an extremely useful management tool



• Participation, support and coaching at all levels• Consensus rather than control• Shared understanding of what is required for success• Continuous feedback on performance• Performance Management describes WHOLE cycle –

appraisal is just one process of performance management

Performance management consists of….


What is Performance Management

Performance management is a cyclical process…..

Determining performance expectations

Reviewing and appraising performance

Managing Performance

Standards

Supporting Performance

Source – Torrington and Hall 1995



Oxford English Dictionary defines performance as the ‘accomplishment,

execution, carrying out, working out for anything ordered or

undertaken’ i.e. how things are done as well as what is done.


What is Performance ManagementWhat the academics say….

‘Performance management is the integration of employee development with results based

assessment’

Hannagan, 2002 pa 294‘Performance management is about managing

the organisation. It is a natural process of management, not a system or a technique’

Fowler, 1990


What is Performance Management What the academics say…

‘Performance management is a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by

developing the capabilities of teams and individual contributors’

Armstrong & Baron, 1998 pa 7



• Strategic-concerned with broader business issues• Integrated –

– Vertical – linking team and individual objectives– Functional – linking functional strategies within business– HR Integration – linking organisational and HR development– Individual - linking individual needs with those of the

organisation as much as possible



• Appraisal of individual performance• Objective setting for individuals and

teams• Related Training programmes• Performance-related pay

Performance management consists of…..



• Organisational goals translated and clarified• Continuous and evolutionary process where

performance improves over time• Open management style required that allows 2-way

communications• Continuous feedback required• All performance measured against jointly agreed goals

Principals of performance management…..



• I am making a living• I am the best stone cutter in the country• I am building a cathedral

The 3 stone cutters….


How did the concept of Performance Management Develop?

Performance Monitoring System development –

Developed during the early 1900’s based on work by Taylor

• merit rating scale developed

• early appraisal system developed based on key criteria



• WD Scott – introduced worker rating into US industries pre WW1

based on work of Taylor. – WD Scott scale modified and used by US Army for rating officers and then

adopted by UK Army in 1950’s.– Principles of scale developed into merit rating or performance appraisal

during 50’s, but without much further research.

• McGregor 1957 – recommended change of emphasis from appraisal to analysis

• Rowe 1964 – encouragement to move away from ‘grades’

The early pioneers…..introducing merit rating and performance appraisal



Management By Objectives –

Developed during the late 1950’s based on work by Drucker

• claims that system overcame problems of merit rating

• inclusion of qualitative performance standards in system



• Drucker 1955 – introduced concept of management by

objectives (MBO) – Integration of individual and corporate objectives– Managers able to manage their own performance

• McGregor 1960 – ‘theory y’– Management by integration and self-control

• Humble 1972 – defined management by objectives cycle

The early pioneers…..introducing management by objectives



Performance Appraisals – 1970’s version

Developed under the influence of the MBO movement

• results-orientated

• performance-related pay based on performance ratings in late 1980’s




• first considered in mid 1970’s

• really emerged strongly in the mid 1980’s in the US

• by 1990 part of HRM language

• 1992 Institute of Personnel Management research into PMS



• Beer and Ruh 1976 – introduced concept of performance management– Emphasis on development and evaluation

– Use of profile to define individual strengths and development needs

– Integration of achieved results

• Plachy 1987 – first book devoted to subject– Management by integration and self-control

• Fowler 1990 – defined accepted concept of performance management

• IPM 1992– research carried out concludes PMS activity

The early pioneers…..introducing performance management


Why is Performance Management important?

Performance management should consider what makes

organisations, teams and individuals perform well in the

following areas…..



• Organisational culture• Organisational context• Functionality• Job design• Teamwork• Organisational development• Purpose and value statements• Strategic management• Human resource management



Performance management is a holistic process that pervades every aspect of running the

business.

It should be treated as a normal process of management.


Performance AppraisalsSome Facts…

• Essential for effective management and evaluation of staff

• Facilitates individual development• Specific individual training needs established resulting in

a realistic training plan that should deliver organisational objectives

• Influence on individual motivation and company loyalty• Analysis of impact of individual contribution to

organisational performance feeding into development of future business strategy

• Contribution to succession planning, HRP and pay• VITAL TOOL for managing performance of people and

organisations


Performance AppraisalsHow are they carried out?

• Usually annual – but may be more frequent• Formal interview• One-to-one, face-to-face• Carried out by line manager• SHOULD be a two-way conversation – not a disciplinary!• Based on PERFORMANCE not subjective management

opinion• Process should be transparent and clearly explained –

and agreed by all parties• Variety of mechanisms


Appraisals will usually cover

• Objectives• Performance against job description• Potential for development• Identification of training needs• Motivational aspects

Factors affecting frequency of appraisals include:-• Company policy• Individual requirements• Experience• Nature of work• Length of service


Appraisal Mechanisms

• Formal annual review• Informal, frequent performance feedback• Probationary reviews• Informal one-to-one review discussions• Counselling meetings• On-job observation• Skill/job-related tests• Secondment• Assessment centres• 360° or 180°feedback• Psychometric tests• graphology


Activity • Working in pairs, complete the following analysis of your

individual appraisal systems making notes on the flip paper provided– Frequency– Who is involved and what role do they play– How long do they take– Paperwork used– How is the appraisal system perceived by employees?

• No formal appraisal system?– How do you get feedback on performance?– What impact does a lack of appraisal have on the workforce in your

opinion?


Activity

• Watch the role play. Make notes on what you see, particularly –– What was good– What was bad– How would you resolve the problems if you were the line manager?

Scenario

Sheila Monkswood, the general office manager at Jaylow Builders Ltd, a very busy builders merchant, has asked her office supervisor to attend an urgent meeting at 10.00 at her desk. The office is open plan, in clear view of the public service counter, with a small board room used once a month. Last week 2 key members of staff were off sick and the office supervisor had to cover the counter meaning an urgent report was not completed. Sheila has been at Jaylows for 2 months, whilst the office supervisor has been there for 18 months. HR procedures are sporadic and there is no formal performance review system in place. Sheila prefers an autocratic management style that has not proved over popular with the staff. The office supervisor is very popular with the team and is highly regarded by Cameron Tadcaster, the founder of Jaylows.


Managing the Appraisal Interview

• PREPARATION– Allow sufficient time– Notify employee– Consider previous performance and future

organisational needs– Book room, prepare paperwork, ensure

work covered so no interruptions


Managing the Appraisal Interview• INTERVIEW

– Establish the purpose– Open the interview– Ask employee to report and comment on previous performance– Offer a performance assessment with reference to previously

agreed targets– Discuss future business needs and agree individual tasks that

can contribute to the business objectives– Discuss performance shortfall and agree action/ support

required to improve


Managing the Appraisal Interview• INTERVIEW CLOSE

– Identify any training and development needs arising from action plan

– Close on a positive note– Check understanding by summarising discussion and

targets agreed– Record and sign agreements– Inform anyone else involved


Managing Appraisals – getting it right

• Training – flexibility• Make it a positive experience for everyone• Fair procedures• Be aware of ‘negative’ culture• Encourage ‘informally and often’ approach• Thorough preparation• Professional interview management• Set SMART objectives and a feasible action plan• Record accurately• Check progress regularly


ACTIVITY – FIRST CHICAGO BANK

• Take 5 minutes to read through the activity • Answer the questions as directed


Benefits of frequent feedback

• WHAT are the benefits…– Manager better informed– Difficult issues resolved quickly– Help given on demand– Quicker completion of projects– Up-to-date with business direction/objectives– Flexibility to meet objectives– More effective training delivery– Reduction of fear factor– Improved relationships– Better preparation for formal reviews– Reviews are more reliable


Assignment 2 – carrying out an appraisal interview

• Read through the assignment task checklist• Ask questions, take notes• Agree mechanism of communication with appraisee

for completion of pre-appraisal documentation• Notify Sue of any issues with assignment completion


Performance Management and Discipline

• If performance management processes are not effective, may need to leave cycle to enter disciplinary procedure

• Why?• Negative effect on positive effects of performance management• Employees may construe PMS used to collect evidence against them• Performance reviews become threatening instead of mutually

beneficial• Consider other options to disciplinary – e.g. capability


Disciplinary Quiz – what can you remember??• You cannot dismiss someone for being off long-term sick• You do not have to tell someone they are going to have a

disciplinary interview• Your witness can actively participate in the disciplinary interview• What is the name of the process an employee can invoke if they

feel that they have been treated unfairly etc• Name the 3 steps of the mandatory Dismissal and Disciplinary

Procedure that came in under the EA 2002• Name the 5 reasons for potentially FAIR dismissal• List at least 2 reasons for potentially UNFAIR dismissal• Employers must have at least the statutory minimum DDP in place• State 3 offences that would be considered as gross misconduct• Disciplinary rules must be in writing and prominently displayed


Disciplinary Quiz – what can you remember??

• You cannot dismiss someone for being off long-term sick - FALSE

• You do not have to tell someone they are going to have a disciplinary interview - FALSE

• Your witness can actively participate in the disciplinary interview – FALSE unless agreed with management

• What is the name of the process an employee can invoke if they feel that they have been treated unfairly etc – GRIEVANCE PROCEDURE

• Name the 3 steps of the mandatory Dismissal and Disciplinary Procedure that came in under the EA 2002

1. A written note to the employee setting out the allegation and the basis for it

2. A meeting to consider and discuss the allegation3. A right of appeal including an appeal meeting



• Name the 5 reasons for potentially FAIR dismissal• Capability• Conduct• Redundancy• Breach of statute• Some other substantial reason



• List at least 2 reasons for potentially UNFAIR dismissal• TU membership/non-membership• Participation in TU activities at appropriate time• Dismissal for seeking TU recognition/de-recognition• Assertion of a statutory right

• Applying for flexible working• Refusal to work on a Sunday (retail)• Refusal to work in breach of WTD• Attempts to enforce NMW

– Maternity/paternity reasons– Connection with a TUPE transfer– Certain H&S grounds– Making a protected disclosure– Where employer has failed to comply with statutory DDP procedures (since 2003)– Participating in protected industrial action in certain circumstances

• Dismissal during 1st 12 weeks of protected industrial action• Dismissal after 1st 12 weeks but employee had ceased to take part within 12

weeks• Dismissal after 1st 12 weeks, employee still taking part, but employer had not

taken reasonable steps to resolve situation


Disciplinary Quiz – what can you remember??• Employers must have at least the statutory minimum DDP in place

- TRUE• State 3 offences that would be considered as gross misconduct• Theft, fraud, deliberate falsification of records• Fighting, assault on another person• Deliberate damage to organisational property• Serious incapacity through alcohol or being under the influence of

illegal drugs• Serious negligence which causes unacceptable loss, damage or

injury• Serious act of insubordination• Unauthorised entry to computer records• Disciplinary rules must be in writing and prominently displayed -

TRUE


Handling Disciplinary Interviews

• Facts in advance• Notice of disciplinary action in accordance with terms and

conditions• Book room, ensure no disturbances, all parties aware of

time, place, reason for meeting• State the case clearly• Allow employees sufficient time to state their case• Question employees and witnesses• Allow sufficient time for general discussion, allowing

employees to have final say• Sum up emerging points• Adjourn meeting if required• Confirm decision in writing• Right to appeal in writing within 5 working days

See the ACAS website for more on best practice


Handling Grievance Interviews

• Provide written facts of grievance in advance• Notice of grievance action in accordance with terms and

conditions• Book room, ensure no disturbances, all parties aware of

time, place, reason for meeting• Allow employees sufficient time to state their case and ask

how they would like to see it resolved• Allow sufficient time for general discussion, allowing

employees to let off steam and have final say• Sum up emerging points• Adjourn meeting if required• Confirm decision in writing• Right to appeal

See the ACAS website for more on best practice


Role of the Personnel Practitioner in Performance Management

• Control functions –– Analysis of key operational indices used to measure goal

achievement– Monitoring labour performance via performance appraisal system– Recommending appropriate remedial action to line managers– Disciplinary procedures


Role of the Personnel Practitioner in Performance Management

• Advisory Functions –– Which employees ready for promotion (potential review)– Who should attend training– How a grievance procedure should be operated

• Service Functions – – Keeping personnel records– Organising training – Recruitment and selection– Operating wages systems


Any Questions….

• NEXT WEEK• Appraisal assignment

UNIT: MANAGING PEOPLE & ACTIVITIES Royal Agricultural College Modular Scheme Cirencester College...

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