PERFORMANCE OF APPRAISAL, RELATED PAY & HR AS STRATEGIC ASSET Presented by : Mohnish Madkaikar Deepshikha Parashar
PERFORMANCE-RELATED PAY Performance-related pay is money paid to someone relating to how well one works. Car salesmen, production line workers, for example, may be paid in this way, or through commission. Performance related pay is generally used where employee performance cannot be appropriately measured in terms of output produced or sales achieved. Performance-related pay has grown widely in recent years – particularly in the public sector.
o Performance-related pay is a financial reward to employees whose work is: o Considered to have reached a required standard, and/or o Is above averageo Impact of PRP Motivational incentive Low impact PPR Performance Derived effects Organisational and management Positive effects in changes, new working the right methods and tools managerial conditions
Well-designed performance-related pay scheme would have the following elements: Objective setting Communication and understanding of objectives Consideration of performance against objectives Translation of evaluation into performance rating A link between ratings and the determination of pay A separate appeals procedure
DISADVANTAGES OF PERFORMANCE RELATED PAY There may be disputes about how performance is measured and whether an employee has done enough to be rewarded Rewarding employees individually does very little to encourage teamwork It may encourage unhealthy rivalry between managers There is much doubt about whether performance-related pay actually does anything to motivate employees.
PERFORMANCE - APPRAISALPerformance appraisals tend to rely more on dialogue with line management than on strictly quantifiable indicators.Generally, the aims of an appraisal are to: Give employees feedback on performance Identify employee training needs Document criteria used to allocate organizational rewards
Form a basis for personnel decisions Provide the opportunity for organizational diagnosis and development Facilitate communication between employee and employer Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. To improve performance through counseling, coaching and development.
HR AS A STRATEGIC ASSETHR is a strategic asset because it can play a critical role in both strategy implementation and management systems.As strategic asset people must be : Valuable Differentiating Hard to imitate.
HOW HR CAN BE A STRATEGIC PARTNER Leadership Knowledge of Business Strategic Thinking Process Skill Technology
SEVEN STEPS TO MAKING HR A STRATEGIC ASSETStep 1: Clearly Define Business Strategy.Step 2: Build a Business Case for Why and How HR Matters for Strategy Implementation.Step 3: Build a Strategy Map Describing the Causal Flow of Strategy Implementation.Step 4. Link HR Architecture to Strategy Map.Step 5: Design HR System in Alignment with HR DeliverablesStep 6: Design HR Strategic Measurement SystemStep 7: Implement Management by Measurement.