Strategic Performance and Commitment Management

Strategic Performance and Commitment Management. Handout # 5 This handout covers CLO # 4 Differentiate between individual and systems level performance and explain the strategic compensation and benefits approaches..

Objectives After reading this chapter, you should be able to.

Definition. 3. PM deals with the challenge organizations face in defining, measuring, and stimulating employee performance with the ultimate goal of improving organizational performance. - The strategic and integrated nature of PM focuses on increasing the effectiveness of organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors..

4. From SHRM perspective, PM is one of the five key HPWPs. - Performance Management is a multi-level concept that aims at answering the question: how high performance is achieved at both: - Individual level, & - Organizational systems level..

Organizational Level Performance–HRM Systems (OLPMS) and Individual Level Performance Management (ILPM) both contribute significantly to the performance of organizations, but they do so at different levels and for different reasons. Below is a summary of their main distinctions: Focus: ILPM: Focuses on each employee's performance and personal growth. Its goal is to evaluate their abilities, contributions, and potential growth areas. OLPMS: Focuses on the organization's general health and performance. It evaluates elements including operational effectiveness, employee engagement, and financial performance. Objectives: ILPM: Attempts to improve people's abilities, motivate and grow them, and align their output with departmental and corporate objectives. OLPMS: Attempts to accomplish strategic goals, foster a high-performing work environment, and increase overall organizational performance. Activities: ILPM: Includes opportunities for growth, coaching, training, feedback, and performance evaluations. OLPMS: Includes developing an organization's culture, people management, performance evaluation, compensation and benefits, and strategic planning..

6. An extensive evaluation to improve job matching; Communication of corporate values and objectives; Providing information for self improvement, training and development and career development; Linking pay to individual and/or team performance; Collecting information for hiring strategies; Validating HR practices; Input for legal defenses (e.g. when an organization try to fire an employee for his poor job performance).

7. PM Process. PM is a cyclical process which involves: Determining the performance expectations of a role; Setting and planning individual`s goals; Providing the individual with learning and development support where necessary; Monitoring their progress and providing ongoing feedback regarding their actual performance against the expected performance..

8. Individual level PM. Key questions to mange individual performance: Who or what is to be evaluated? Who performs the evaluation? What is the time frame? Should we be using objective or subjective evaluation? Do we apply relative or absolute performance indicators? Should we use a forced distribution? How many performance indicators should be used?.

9. AMO. PM and AMO model. P = f (AMO) Hiring people who have the relevant KSAs is a fundamental for expecting them to perform well. HR managers should also focus on a combination of intrinsic and extrinsic motivational approaches to offer satisfying and motivating jobs for employees which helps improve their performance. -Line managers and supervisors play an important part in providing the environment or opportunity for their subordinates to remain motivated and apply their abilities to the fullest..

10. Goal-setting theory and AMO model (1). From strategic perspective, the principles of goal-setting theory are highly relevant to achieve the AMO equation. This theory suggests that directing employees` attention to goals; regulating the efforts; increasing their persistence and encouraging the development of goal-attainment strategies or action plans; have a positive impact on the performance of the employee. The goals should be set at the right level to motivate employees to aspire to achieve higher (stretch), the goals should be quantifiable and clear..

11. Goal-setting theory and AMO model (2). The most important finding of goal-setting theory: The more difficult the goal, the greater the achievement; The more specific or explicit the goal, the more precisely performance is regulated; Goals that are both specific and difficult lead to the highest performance; Commitment to goals is more critical when goals are specific and difficult; High commitment to goals is attained when the individual is convinced that the goal is important and attainable; Goal-setting is most effective when there is feedback showing progress in relation to the goal; Goals stimulate planning..

12. Organizational level PM. Key questions for HR manager to address: To what extent are there complementarities between HR and other management functions? Are HRM practices mutually fitting and reinforcing, in other words, achieving internal or horizontal fit? Are they applied consistently across the organization?.