Performance Management and Compensation Structure - 2200 Words

Performance Management and Compensation Structure: A Research Report (Dissertation - Results Sample) Content: Performance Management and Compensation Structure: A Research ReportA. Executive SummaryThis research report discusses various aspects that has been found out through the research process. The report discusses various steps of performance management process that helps an organization to enhance its organizational efficiency. It also describes various kinds of approaches and strategies that are used for giving warning to the underperforming employees or terminating them. The report also includes a clear discussion and description of a suitable, effective, and influencing remuneration structure and, the appropriate base pay structure so that the Little Heart Agency can properly understand and assess the areas that need to be improved.B. Table of Contents TOC \o "1-3" \h \z \u A. Executive Summary2 B. Table of Contents.......................................................................................................31.0. Introduction4 2.0. Findings4 2.1. Performance Management4 2.1.1. Performance Planning4 2.1.2. Performance Monitoring5 2.1.3. Performance Development5 2.1.4. Performance Evaluation6 2.1.5. Succession Planning6 3.0. Performance Warning System6 3.1. Procedural Fairness6 3.2. Substantive Justification7 4.0. Remuneration Structure7 4.1. Job Evaluation Techniques7 4.2. Base Pay8 4.3. Variable Components8 4.4. Extra Benefits9 4.5. Other Allowances95.0. Base Pay Structure106.0. Conclusion11References....................................................................................................................131.0. IntroductionThere are multiple factors that are necessary for setting goals of an organization, analyze the employee performance, and develop a strong work culture. As the Little Heart Agency has not implemented any effective performance management system and clear remuneration structure, the structural sc enario of the organization demanded a proper research about all these facts so that LHA becomes able to implement and integrate all these systems into its structure. This report mentions and critically evaluates all those factors that have been found necessary for the organizational strengthening of the Little Heart Agency.2.0. Findings2.1. Performance ManagementThe performance management helps an organization to establish a proper understanding of the workforce and the desired achievement with the help of that workforce. This process has various parts.2.1.1 Performance PlanningPerformance planning is the primary and fundamental step of performance management. This formal process helps an organization to identify, discuss, and then develop proper plans to set both organizational and individual goals within the company structure (Bhattacharya, 2011). It clearly demonstrates the desired level of achievement by the employees in the upcoming period of performance appraisal. This step is necessary because, at the end, the fixed goals and objectives serve as the standards for assessing and evaluating the performance of the employees as well as the improvement of the organization. It is highly recommended that the objectives and the indicators developed in this stage are specific, measurable, attainable, realistic, and time-bound.2.1.2 Performance MonitoringThis monitoring process is usually supervised by the managers. The focus should be invested on the achieved results, and how the individual and group behavior of the employees contribute to the work environment (Bascal, 2012). The monitoring process should also concentrate on continuous tracking of the objectives through regular meetings with the employees, identifying barriers to the achievement of the objectives, sharing feedback on the achievements of the employees, keeping the employees aware about any required changes in the objectives in accordance with the shifting environment, and determining any extra sup port that may be required for enhancing the performance of the workforce.2.1.3 Performance DevelopmentAn organization should heavily focus on the development of the employee performance thorough continuous and thorough communication with the managers. This stage focuses on the development of the skills of the employees and the managers so that their professional excellence are enhanced. It includes discussion with the managers, exchanging opinions and ideas among the individuals, promote individual growth, and allow the employees to adopt new skills and thoughts in accordance with the organizational objectives (Delpo and Guerin, 2014).2.1.4 Performance EvaluationThe performance evaluation process is the review and critical evaluation of the delivered performance and achieved objectives of the employees over a specific period of time. The evaluation process helps to summarize the accomplishments of the employees both on the individual level and on a wholesome organizational level so that the organization becomes able to find out the key results and the shortcomings in accordance with the organizational objectives set at the first level (Sandler and Keefe, 2004). This process also kelps to find out the challenges for the workforce and identifies the areas that need development.2.1.5 Succession PlanningSuccession planning is an important step in the performance management system. Through this particular step, the organizations recruit suitable and fit employees, managers, and other superior employees according to the defined job roles. It helps an organization to recruit the employees according to their excellence, develop their skills, and encourage the employees for promotion to the more challenging job roles inside the organizational structure.3.0. Performance Warning System3.1 Procedural FairnessProcedural fairness is a fair, impartial, and unbiased process for resolving any kind of disputes between the employee and the employer. This process gives the emplo yees an opportunity to resolve any dispute with the organization if he is provided any warning for underperforming. Moreover, this process needs to allocate equal resources to both parties for fair justice. If there is any biased step during the process that unfairly goes against the employee, he can file a lawsuit against the organization. The law has the provision that clearly states that in such case, the employee should be given beck his job or compensated accordingly.3.2. Substantive JustificationIf an organization dismisses an employee without any prior notice or warning, the decision should be substantively justified. According to the law, the organization should clearly describe if the employee was previously aware about the company rules and policies, if the employee was given sufficient opportunity and proper training to enhance his knowledge and skills, and to what level the ill health of an employee is affecting the overall performance of the organization.4.0. Remunerati on Structure4.1. Job Evaluation TechniquesLHA can use two types of effective techniques for job evaluation.A) Job Ranking: In this method, each job role and the employee performance related to each job role are compared with the other job roles of the organization. It allows the organization to rank all the jobs according to their importance in the organization in the form of highest to lowest, and hardest to easiest (Armstrong, 2005). This ranking should be done according to the responsibility, expectation, and duty of each specific job role.B) Points Rating: This method allows the evaluator to allocate points to each job role according to specific factors like responsibility, required skill, employee's knowledge, produced effort, and difficulty level of the job (Armstrong and Murlis, 2007). These points are then summed up to arrive at a conclusion. The remuneration package is provided according to the points allocated to each job role.4.2. Base PayThe following types of base pay can be implemented in the LHA:1) Salary: This system allows the employees to receive compensation according to the their performance on weekly, bi-weekly, or monthly basis. The employees are fairly compensated for their performance, but they do not receive any extra credit for better performance (Ryckman, 1986).2) Hourly Wage: The payment rate can be decided according to the job roles and according to the number of hours the employees have worked. In this type of pay, the employees can be provided with some extra benefits for better performance or overtime work.4.3. Variable ComponentsLHA is a non-profit organization that hugely depends on the performance of the employees. Therefore, the employees should be encouraged to work better by providing them with some variable components in the remuneration package.I) Performance Bonus: The employees should be compensated with some bonus after the evaluation of the employee performance over a specific period of time (Keenan, 1994). The perf ormance bonus should be awarded on a discretionary basis. The bonus should be provided according to individual performance, the importance and the level of the job role.II) Long Term Award: This system can be helpful in the organization's goal to retain the employees. This extra compensation offers the employees with an added benefit after the ending of their career. the compensation is generally huge and handsome.4.4. Extra BenefitsLHA can also implement some extra benefits in the remuneration package to encourage the existing employees and attract new professional in the work field.i) Provident Fund: This is a compensation provided to the employees after their retirement. Precisely, it is a kind of pension fund. The employees of the LHA will be encouraged to work better if they are provided with sustainable and attractive provident fund benefits.ii) Business Trave...