Performance of employees within business organization can be measured on the basis of how well he/she works. HR managers or senior executives within the business enterprises uses standard based system for evaluating employees and also for setting their salaries. This performance related pay is adopted by the company because their workers performance cannot be appropriately measured in terms of output generated and also sales achieved by a particular individual (Turner, 2014). In order to study the performance of an employee briefly, organization undertaken for the present study is Cavendish Hall Hotel which is a 4 star hotel which has around 200 rooms. Cited hospitality is famous for wedding and has varied range of conference and banquette facilities. This present report is based on understanding the advantages and disadvantages of individual performance related to pay in mentioned hospitality. Further, this report also focuses on alternate reward approaches which can be used by Cavendish Hall Hotel to improve their efficiency and productivity.
TASK 1 MANAGEMENT REPORT
Advantages and Disadvantages of Individual Performance Related Pay (IPRP)
Individual performance related pay is a method of remuneration that links pay progression with the individual performance within the hospital organization. This PRP differs from one organization to another on the basis of individual performance, team work and also revenue and profits of the business enterprises. PRP given to employees is also linked with their salary structures, their grade pay, etc. As per the case study, Daphne Jones who is been appointed as a personnel manager of Cavendish Hall Hotel is asked to review the effectiveness of the mentioned scheme (Rummler and Brache, 2012). Under this scheme, all the employees within the mentioned company will receive one percent of their salary increase irrespective of performance.
Advantages of Performance Related Pay
- This performance related pay leads to reduction in production cost for the organization which can be re-achieved by Cavendish Hall Hotel through increased potential of individuals and by improving their service quality.
- IPRP improves the morale of the staff and leads to motivation of employees.
- Mentioned Company has to define the goals and objectives specifically as appraisals of employees are based on their achievements as how much a worker has contributed in the organization.
- This PRP system also leads employees towards the job satisfaction as they are rewarded for efficiency they have put in order to achieve goals and objectives of mentioned company (Cummings and Worley, 2014).
- This PRP pays right employee right amount and it usually weeds out the drowsy and lazy workers.
- With the help of PRP, employees within the cited hospitality are attracted and retained back as organization recognizes their achievement with the help of the pay system.
- Healthy PRP system reflects that properly rewarded employees are likely to be more loyal and perform their duty effectively for the hospitality.
Disadvantages of PRP
- Effect of PRP on staff motivation is unsure because the bonus payments are normally a small percentage of an overall salary of employees within the hospital organization.
- PRP might have negative influence on staff morale if management and executive team within Cavendish Hall Hotel is not properly trained or have poor communication skills to communicate with their workers effectively.
- Major disadvantage of PRP is that it leads to serious disputes and creates hindrances between superiors and subordinates as employees do not accept the fact that they have got different reward pay for the same effort for a particular work as compared to other employees.
- In order to maintain this PRP policy, additional pressure is on superiors and managers of the mentioned hospital organization.
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IPRP improving organizational performance
Nowadays, IPRP is considered as an effective tool for measuring performance of employees within the business organization. This helps the cited organization to strengthen relationship between performance and the reward (Zellmer-Bruhn and Gibson, 2006). IPRP further drives Cavendish Hall Hotel to implement their organizational strategy to lower level. This policy genuinely improves corporate performance as it retains employees by accurately rewarding them for their effective and efficient performance. IPRP boosts up individual morale within the mentioned hospitality and they work with best of their potential and talents.
Suitability of IPRP
This method is most appropriate and suitable for the cited hospitality as Cavendish Hall Hotel is located on a tourist spot and also has almost 200 rooms. This constitutes that organization is having large employee base and is operating in different departments namely Events and Banqueting, Rooming and Reception, Housekeeping, Food and Beverages, HR and Administration. Employees working style varies from one department to other (Hult, Ketchen and Arrfelt, 2007). Further, organization has a better financial structure which is considered as a source for motivating their talented employees. This is also necessary to improve organizational performance as well as productivity.
Barriers to the effective design and implementation of IPRP schemes
Cavendish Hall Hotel has to seek all their valuable resources before implementing various IPRP schemes. Moreover, organization has faced many barriers while designing effective IPRP polices for their employees. Some prior barriers are stated below:
Designing PRP schemes- Cited hospitality has faced various problems at time of designing PRP policies for their employees. Some human resources were in favor and some were in against regarding the decision (Neely, Gregory and Platts, 2005). Finally, organization divided employees in four categories namely: Excellent, good, satisfactory and Unsatisfactory.
Rewarding according to performance- In this organization focus on rewarding employees in a fair and effective manner. Moreover, cited hospitality provides reward by considering the spirit and potential of employees as how enthusiastic they are in order to achieve organization aims and objectives.
Changes in pay system- Cavendish Hall Hotel have to change their pay structure according to modifications of employee’s designation For instance, if individual is promoted or for the individual job rotation is carried out then personnel manager of mentioned hospitality have to make relative change in the PRP policy of that individual.
Further, motivation of employees plays a crucial role in the overall performance of an organization. Cited hospitality would like their employees to work harder and to be flexible in their work schedules. However, the link between reward schemes and motivation is a complex issue which is debated in both accounting and human resource department within Cavendish Hall Hotel (Srivastava, Bartol and Locke, 2006).
Now after facing the barriers, organization has effectively implemented the PRP policy for their employees. Under this policy, each member of staff receives one percent of the salary as per their performance which will lead to increase in their cost of living. As stated above, Cavendish Hall Hotel gives rewards to their employees by dividing them into four categories. These are:
Employees who gave their best throughout the year in order to provide the best and effective results are rewarded with the four percent rise in their salary. This elaborates that individuals will get three percent + one percent the cost of living will increase. Those who come under good and satisfied are marked with 3% and 2% respectively. However, those employees who were unsatisfied only receives one percent of cost of living increase. This PRP policy differs from one organization to another (Darroch, 2005). Daphne Jones as a personnel manager in the cited organization must look towards the development of employees as they feel more energetic and cheerful in order to perform their day to day operations. Clients and tourists are the major assets for hospital industry and they should be fully satisfied with the service so offered by mentioned hospitality. In the case study, there are various scenarios like employee's attitude towards serving and talking with clients is not appropriate. They usually lack in their communication skills which is the coming drawback for Cavendish Hall Hotel. Further, infrastructure and accommodation provided by the corporate were not up to the mark and customers were dissatisfied with the services so offered to the clients.
By taking all these things into consideration, now it is the prior duty of personnel manager as well as of cited organization to work in order to satisfy the needs and wants for their customers (Chen and Huang, 2009). Further, they must emphasize on better food and health services in all perspectives within organization.
Alternative reward approaches opted by organization
Currently, performance related pay is used by the mentioned company to reward their potentially talented employees either individually or on team basis. Moreover, it is often treated as a way of giving incentive to those employees who are at the top of their pay structure. Further, increase in pay is generally linked up with the individual or team performance within Cavendish Hall Hotel. Currently, organization is using a PRP structure where employees are divided in the categories like excellent, good, satisfied and unsatisfied (Brown and Harvey, 2011). Cited company ranks employees according to their performance in respect of their potential and capability to achieve the goals and objectives. Those who are in excellent category gets a 4 percent of pay rise and it goes on decreasing and reaches to 1% for those who are unsatisfied. IPRP is normally treated as the best way in order to calculate their employee's performance but at times, individual’s faces dissatisfaction and they not work with the best of their capacity and capability. For improving this, mentioned company has to take some relevant steps in order to boost up their morale and also to motivate them to achieve their individuals as well as organizational goals.
Alternate reward approaches which can be used by Cavendish Hall Hotel to complement IPRP are as follows:
Behavior Checklists- Cited Company can include behavioral checklists and scales to determine their employee's good and bad job performance which they have rendered for the hospitality firm (Hervani, Helms and Sarkis, 2005). Under this method, top executive records the behavior as in which way; they have performed in the cited organization. Personnel manager of mentioned company have to make a record of all the good and bad performance of their employees which in turn help HR manager to develp their performance appraisal at the end of the year.
Self-assessment of employees- Under this method, employees can assess and evaluate their own behavior and performance.
Peer assessment of employees- In this, peer employees and subordinates can evaluate and appraise the performance of their team members or workers. This assessment helps individuals to develop a healthy subordinate relationship within organization as any dispute with them can affect their overall performance (Luthans and et.al., 2005).
360â° feedback- This feedback can be treated as multiple evaluation of employee's performance which will include assessment from superiors, peers and employees.
Consumer feedback- Under this method, personnel manager of Cavendish Hall Hotel need to look over the employees if any customer or client is giving positive response for the service they have received within the cited hospitality. Appreciation for a particular individual will lead towards the increase in pay for employees as they are treating their guests in the best and positive manner.
Non-financial incentives- Apart from giving financial incentives to employees, management of Cavendish Hall Hotel can give non-financial benefits to their employees in the form of seniority, promotions, responsibilities etc. Employee’s performance should also be improved if clients or customers would give valuable compliment for a particular staff member.
These are some points which Daphne Jones can consider in order to improve the performance related pay for individuals within mentioned hospitality. Points which are stated above will boost employee's morale and they will work with the best of their efficiency and capability in order to achieve the goals and objectives of mentioned hospitality (Winter and et.al., 2006).
TASK 2: APPRAISAL MANAGEMENT REPORT
Importance and effectiveness of object setting, strategic alignment and feedback
Importance of object setting
According to Lu and Sexton, 2006, organizations have to set business goals as it constitutes the part of a business plan. Moreover, these girls show what Cavendish Hall Hotel is planning to accomplish in terms of the market share, growth in comparing with competitors and also in the form of profitability. There are several benefits in setting the goals and some of them are as follows:
Provides focus- When mentioned company sets goals for organization, employees need to prioritize their work in order to attain objectives in the most efficient and effective manner.
Working together- Business goals cannot be achieved if employees within organization are not having any unity or togetherness. All the successful ventures are having effective teams which meet their tasks and duties on specific deadlines (Cartwright, 2005).
Effectiveness of object setting
As per the view points of Hoobler and Johnson, 2004, effectiveness of organization can be judged after setting up the goals and objectives of business organization. This shows the extent to which cited company is dedicated to achieve their aim and objectives in order to have competitive advantages over their potential competitors. For effective completion of goals, organization can focus on following points:
Challenging- Determined goals need to be challenging as it will help the organization to see the perception of their individuals in terms of manner in which they deal with different situations.
Attainable- Employees according to their capability and skills should complete a task. Individuals must possess their task and duties on time otherwise they will start feeling their routine work hectic and will quit the organization in coming time period (Leopold, Harris and Watson, 2005).
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Importance of strategic alignment
According to Marrewijk and Timmers, 2003, strategic alignment helps in linking the business strategy with its organizational culture as it helps company to change and align their vision with that of the leadership goals with different departments, etc. Importance of strategic alignment for Cavendish Hall Hotel is stated as below:
Developing an effective support culture- If cited hospitality firm has to experience their organizational strategic alignment then their management and administrating goals need to be in alignment. However, if employees are not having that much of knowledge and if they are not that competent, then cited hospitality must provide effective training program for their betterment.
Promotes individual and team efforts- Raising self-awareness and allowing employees to take part in the effective decision making drives up the organizational strategic alignment. This will help organization to achieve their organizational goals and objectives and also give them a competency position in competitive environment. (Pattanayak, 2005).
Effectiveness of strategic alignment
Strategic alignment is not about setting the goals and objectives for company. From the view point of Prince, 2011, it means that entire organization has to get aligned and employees have to synchronize their daily efforts as per the needs and requirements and it also can be in any form. Further, CEO of Cavendish Hall Hotel cannot carry organization’s strategy on his own shoulders. He will be in need of potentially talented employees who can help him to achieve the goals and objectives in a precise manner.
Importance and Effectiveness of feedback
According to Schweyer, 2010, feedback is considered as an essence of work culture as continuous feedback plays a vital role in motivating employees to give best of their efforts in order to achieve their individual as well as organizational goals. Importance of feedback in Cavendish Hall Hotel is explained like:
Providing feedback can develop employee’s morale and it also reduces the confusion regarding employee's expectations and their performance.
There are two types of feedback which can be used by personnel manager within cited hospitality. One is positive feedback and another is constructive. Positive feedback helps in reinforcing the desired behavior of individuals. On the contrary, constructive feedback addresses the area where employee needs maximum improvement so that he can achieve their individual goals and objectives.
It plays an effective role in developing employee’s morale as it shows the areas where employee is lacking and the initiatives that he can take to improve his/her qualitative performance. Executives make the correctness of individual’s fault so that same mistake would not happen again (Sims, 2007). However, if this incident is taking place constantly, then it will lead to the termination of employee from the cited hospitality.
Links to appropriate development plans and support
Cavendish Hall Hotel has to develop some specific plans in order to improve their performance as well as to touch the heart of their potential customers. In recent times, organization comes up with various drawback and comments which are given on online sites and they were unpredictable. However, to develop organization’s respect and goodwill, cited hospitality has to adopt various changes which will help them in improving their productivity as well as support them in developing the lost goodwill (Thorpe and Beasley, 2004). For appropriate plans and support, mentioned hospitality must focus on:
Training and development- All the individuals who are working within aforesaid corporate shall be given with effective training in order to achieve their individual as well as organizational goals. Each and every department has their own significance and employees who lack in any of the skills must go with an effective training program.
Performance appraisal- Apart from IPRP, organization should evaluate and adopt performance appraisal method in order to reward and motivate their employees. This appraisal consists of all the specifications which employees must have in order to fulfill their duty. Moreover, HR software has this function inbuilt which will automatically observe the employee's performance according to the work done. This appraisal is made on yearly basis which helps in increasing individual’s pay structure (Torrington, Hall and Taylor, 2005).
Links to appropriate methods to manage poor performance
For managing the poor performance, organization has to work on major issues which are affecting the goodwill of cited organization. Some methods to manage the performance of individuals are:
Strategic Alignment of HR- Empowering HR department helps in adding value to business strategies which ensures that personnel manager undertakes the functional activities apart from doing their administrative functions, recruitment and selection, training and development etc.supports growth and success of organization.
Effective training and development- Training and development to employees will help the cited company to quickly adapt new changes and policies which are trending in the business environment (Winstanley, Woodall and Heery, 2006). Moreover, organization is also affected by a large range of internal and external factors.
Improvement in recruitment and selections- Mentioned firm that has positive reputation at the market place and that takes better care of employees faces few barriers in recruitment. Mentioned hotel has to adopt the same procedure so that they will have motivated and satisfied employees with low labor turnover.
Linking appraisal discussion with other management tools and techniques
Appraisal is the process which helps in providing information about the performance which is being carried out by the employees. In this context, it can be said that it is very essential for the firm that it must make measure with regard to assess the performance which is being carried out by its employees. This is because, if not done then information with respect to the specific skills cannot be obtained by the manager of Cavendish Hall. (How to manage poor performance in the workplace, 2015). Thus, ineffective measures with regard to the same by firm will lead to hamper the sales and profitability related condition of cited enterprise.
From the given case, it is identified that Cavendish Hall is going through many types of employee’s related problems. These problems can be resolved by firm by opting other management tools and techniques.
For example, from the result of performance appraisal, it has been identified by the manager of Cavendish Hall that employees lack in interpersonal skill. This skill has its crucial importance for the firms that are associated with the hospitality industry. This is because, it is with the help of given skill only; an effective service will be delivered by firm to its respective workers. For the purpose to improve the given skill, manager of cited firm can take assistance from the management technique like training and development of workers. With the help of this tool, significant improvement in interpersonal skills of hotel workers can be carried out. As a result of it, they will be able to direct their efforts with regard to give their best performance to the buyers.
In addition to this, integration between appraisal discussion and other management tools and techniques can also be established by taking regular feedback and reviews from the buyers. For instance, while carrying out discussion with workers, manager of Cavendish Hall has gathered the information about employee’s preferable mode of taking training (The Importance, Benefits and Fundamentals of Providing Feedback in Sales, 2009). Here, by conducting changes in the existing training module of firm, manager can enhance ineffective skills of his workers. Furthermore, it is by complying with the given type of activity only, manager of Cavendish Hall can enhance the satisfaction level of its workers. Overall, it can be said that by establishing link between appraisal discussion and other management tools and techniques, an effective support to the performance development can be provided.
From the above report, it is clearly inferred that Cavendish Hall Hotel adopts Individual Performance Related Pay (IPRP) to motivate their employees. Further, this report constitutes with advantages and disadvantages of PRP which focuses on improving employee’s performance. This report also shows some barriers which organization faces while developing effective PRP schemes. Furthermore, this report shows alternate methods which organization can implement to motivate their employees in order to boost their morale. At the end, this report shows appropriate development plans like effective training and development to potential and talented employees in order to achieve the goals and objectives of cited company.
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