A recently published research paper (Smith, Jones and Brown, 2015) concluded that, globally, most large organisations, in both the private and public sectors, operated some form of performance-related pay for their employees. This was usually embedded within a formal performance management system but such systems were often regarded as stand-alone processes and were very rarely aligned with, or linked to, the culture or corporate strategy of the organisation.
The findings were based on a large-scale, international survey of over 2000 senior managers in more than 100 large organisations, located in some 40 countries.
The researchers concluded that in almost all of the organisations surveyed many employees were unaware of how they could contribute to their company's strategic goals.
Some respondents' quotations are shown below. Many HR managers reported frustration with their organisations' policies.
· 'In the 21st century we need to find ways of helping our people to work smarter, not longer, or harder, or more cheaply.'
· 'Employers need to help employees to see that it is in their own long-term interest to continually develop their skills and talents.'
· 'If you want to build a high-performance culture, learning technology is vital, but the most important thing is commitment from the top down."
· "The problem is many employers can't see a personal incentive to achieve stretch goals. Line managers need to re-engage with their staff to regain their trust and commitment."
· 'If performance management, including development, is taken seriously by the organisation's strategic apex, then this should cascade down the organisation from top to bottom. If the top guys lead by example then the middle level and junior managers do the same.'
· 'Performance and Development is too important to be left to HR. If senior management is not committed to performance management, it just becomes a box-ticking exercise.'
· 'The key elements of Performance Management are: setting SMART targets; monitoring and evaluating 'what' colleagues achieve and 'how' they achieve it; ensuring colleagues are supported to achieve; determining an overall rating annually on performance; and agreeing and supporting training and development needs.'
· 'We have a culture of trust and strong leadership and we are sharpening up what we expect from people.'
· 'Cracking the whip can be counterproductive. It is preferable to identify what people have done well and focus on that.'
· 'A team leader should have a vision of what they want the team to do. If the team buys into it, they will give a lot more discretionary effort, especially if they are able to plug the team purpose into the bigger corporate or strategic vision.'
· 'Most people think they are giving good, or indeed excellent, performance. The truth is, in most cases it's OK, but not wonderful. But 'good enough is no longer good enough'. With employees having more employment rights - and therefore costing more - it is vital to coach and guide them - and ultimately discipline them if necessary, to ensure they meet performance standards.'
· 'Talent management is about proactively managing the attraction, development, deployment and retention of the organisation's highest quality employees. This differs from performance management, which encompasses all employees within the organisation.'
· 'The key is to identify the right high-calibre staff to participate in talent management initiatives, using objective rather than subjective data.'
Analyse the above case study.
1. Identify the key OB theories that are addressed.
2. Discuss their application within the case study.
3-Reinforce your analysis with examples from your own experience
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