unit: managing people & activities royal agricultural college modular scheme cirencester...
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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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Activity
Working in groups, and with reference to work covered in the
HRM module prepare your definitions of
Performance Management
Appraisal
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Difference between Appraisals and Performance Review
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Performance Management
• 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….
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
What is Performance Management
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.
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
What is Performance Management
• 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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
What is Performance Management
• Appraisal of individual performance• Objective setting for individuals and
teams• Related Training programmes• Performance-related pay
Performance management consists of…..
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
What is Performance Management
• 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…..
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
What is 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….
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
How did the concept of Performance Management Develop?
• 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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
How did the concept of Performance Management Develop?
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
How did the concept of Performance Management Develop?
• 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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
How did the concept of Performance Management Develop?
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
How did the concept of Performance Management Develop?
Performance Management
• 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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
How did the concept of Performance Management Develop?
• 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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Why is Performance Management important?
Performance management should consider what makes
organisations, teams and individuals perform well in the
following areas…..
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Why is Performance Management important?
• Organisational culture• Organisational context• Functionality• Job design• Teamwork• Organisational development• Purpose and value statements• Strategic management• Human resource management
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Why is Performance Management important?
Performance management is a holistic process that pervades every aspect of running the
business.
It should be treated as a normal process of management.
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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?
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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.
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
ACTIVITY – FIRST CHICAGO BANK
• Take 5 minutes to read through the activity • Answer the questions as directed
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Disciplinary Quiz – what can you remember??
• Name the 5 reasons for potentially FAIR dismissal• Capability• Conduct• Redundancy• Breach of statute• Some other substantial reason
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Disciplinary Quiz – what can you remember??
• 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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
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
UNIT: MANAGING PEOPLE & ACTIVITIESRoyal Agricultural College Modular Scheme Cirencester College Foundation Degree in Business 2006/2007
Any Questions….
• NEXT WEEK• Appraisal assignment