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Daisy Kee Mui Hung, 2006 fairness is a primary concept in the workplace where it is referred to as organizational fairness and involves matters of assessment and evenhandedness. Without justice, organizations would face huge challenges in motivating and guiding employees. Thus, it is vital that organizations take into account the issue of fairness in performance management system. Also, organizations should be thoughtful of individual differences in perceptions of fairness and the relationship of fairness to performance management system practices, expressly how fairly plunder are perceived to be distributed.
Cropanzano & Greenberg, 1997 in exploratory analyses, fairness has been conceptualized into two wide dimensions distributive and procedural, defined distributive fairness by comparing an employee's pay-off relation of outcomes with other co-workers' ratios. In other words, distributive fairness focuses on the fairness of the decision outcomes received.
Performance management system has core importance in overall organization performance and has an impact in its long term performance. Over the year's organization with their past experiences have realized the importance of performance management system and its impact on employee performance. Now a day's performance management system is considered as an investment in the organizations rather than expense. Huge no of researches has been conducted by various multinational organizations all over the world on the topic of Performance management system.
The organization should take care that the performance management system should be inline with the overall business strategy because employees are the one who are actually the achievers of organization goals. Fairness of performance management system is purely dependent on the long term Human Resource actions.
The performance management system of organization should focus in providing equal rights and opportunities and there will no discrimination on any grounds. People should be evaluated on the basis of their performance rather than for the background they belong to. For instance manger in the organization is promoted for his/her work rather than from the caste, religion or ethnic group he/ she belong too.
There are certain guidelines on the basis of which the fairness of performance management system is evaluated all of these guidelines are not necessary to fulfill but practice of all help organization in achieving their organization goals.
Creating Performance standards
Support from the top management
Employee Active Participation
360 degree evaluation and Feedback.
Evaluation is inherent in the goal setting and coaching processes. Therefore, a formal performance review should be a routine, no surprise culmination and review of past discussions. However, it often is not. Many people approach formal evaluation with trepidation and consider it a waste of time because of the common problems in the process: subjectivity, rating inflation, arbitrary judgments, etc. Lack of agreement and lack of understanding goals and expectations, combined with failure to provide coaching along the way, are a large part of these problems.
If people know what is expected of them, know how their performance will be measured, and receive periodic feed back, the formal evaluation session itself is less threatening. It can be a productive event because it is another opportunity to coach. A formal evaluation session will be seen as productive by the participants if:
It is a two-way, future-oriented discussion about behavior and what can be done to improve, and
The criteria are seen as appropriate by both the person being evaluated and the evaluator.
Evaluation of performance management system lays in its consequences the reason for which the system is developed and the objectives organization wants to achieve. The reason for which performance management systems are developed is to communicate with the employees about their responsibilities and the task required for performing their jobs.
A well organized and fair performance management system can help organization in achieving their objectives as well as develop the motivation level of employees. If the overall employees are satisfied with the task as well as the appraisals they are getting, it seems that organization performance management is fair and effective.
Q2. Argue for and against the implementation of a performance management system in contemporary business organisations in Australia.
Training and Development
Kouzes and Posner (1997) stress the importance of "finding people who fit the company rather than a specific job" this can be extrapolated to include keeping the right people.
Training and development is one of the vital functions of Human Resource activities. Performance management system provides the guidelines to the managers about the type of training particular job required. It provides the basic information about the training that is required by the employees to perform their respective jobs. Performance management system helps managers in development of training programs essential for the attainment of organization objective.
In terms of performance appraisals of individuals, it is necessary to consider exactly what should be measured or judged in terms of performance. This firstly requires examination of what the requirements of a certain position are, this examination is based upon those at or near an executive position.
Dickensen, (1993) to address the challenges facing public sector organizations and to place these organizations in positions of future success will require people with distinctive and particular knowledge, skills and attributes or competencies
Appraisals are something that employees always interested inn and HR managers one of the difficult tasks is to make the correct appraisal decision. In Australia as intensity of competition increases the retention of Human Resource is one of the core issues. Performance management system helps managers at the time of appraisals and make appraisals decision easy for the managers. It also helps managers in understanding the expectations level of employees.
Performance management helps managers in benchmarking the performance required from any particular job. For instance it gives the clear picture to the employee about his/her tasks and duties required to perform his/her job. Performance standards are developed and benchmarked for the sustainability, timely review of standards is performed and new standards are developed or adjust according to the changes in external environment.
Implementation of performance management system is not an easy task it required a lot of investment as well as a lot of time to develop. Organizations spend million of dollars in the development of Performance management system. People soft and other software are examples of the performance management system that posses high cost. Performance is a long term investment whose advantage can only be determined in the long run.
Due to the intense in the Australian market some organization in order to be competitive developed unrealistic standards in order to be competitive in the market. Development of such standards has a negative impact on organization rather than positive employees become de-motivated and considered the performance management system unfair. Development of urealisti performance standards also reduces the motivation level of employees as well as their job satisfaction.
Investment in Training
Change is something that is very difficult to bring in the organization. Contemporary organizations in Australia are focusing in development their employees skills in a manner that they welcome change rather become hindrance for it. In order to inclined the behavior of employee huge training is required resulting cost to the organization. Training of managers required numerous hours and investment as it take time to develop people.