What is Performance Management?

AVCE Business Studies Human Resources Unit 4

Performance Management BOOTS

All members of staff within Boots take a keen interest in the methods used by the organisation to reward them for loyalty and hard work. It is generally recognised that the majority of people go to work for a range of reasons but predominant among these is a need to earn a living wage. To an employee, this means being able to pay bills on time, provide the family with a home and sufficient food to follow a healthy diet, and afford luxuries such as cars, holidays and regular entertainment.

In the quest for efficiency, a comprehensive process of performance measurement will be central to the fair distribution of rewards. A number of stages will be set up and part of the recruitment procedure will be to gain staff with a high level of commitment to the aims and objectives of Boots. These will be determined by the senior management team and will reflect the nature of the business activity carried out by the firm. From this, the mission statement will be identified and all staff will be encouraged to meet and exceed the levels of the service described by it.

From the framework of Boots mission statement, the human resource manager will set up strategies to assist departmental managers to measure their staff performance levels. Each department will identify its own aims and objectives to contribute to the overall effectiveness of the company. The departmental objectives will be directly linked to the activity carried out within it and will then be cascaded down to each member of staff. In some cases, this will at team level where several employees will be expected to make a contribution. Training may be provided to assist individual and team members to achieve their goals.

If employees of Boots are to meet their targets, theses targets must be realistic and achievable and the organisation must provide suitable resources to enable them to complete tasks satisfactorily. Boots’ staff can easily complete tasks they are competent in performing but, to aid motivation, new tasks can be added to the existing skills and an allowance must be made when this occurs.

By discussing these objectives with each employee, Boots departmental manager will be able to make small adjustments to match individual employee capabilities. The aim is to keep motivation levels high so that employees are able to concentrate their energies on achieving their particular targets. If these are unrealistic, this will lead to demoralised staff who knows they will not be able to meet targets and this will lead to unnecessary absences, placing the employee in an even worse situation.

Part of the monitoring process will be to see how close Boots staff has to come to meeting their targets and analysing the reasons for non-achievement. This can be done more frequently for staff that is falling behind the set target figures and it will be up to Boots’ departmental manager to give encouragement and assistance to the slower members of staff. Confrontation helps no one and it will inevitably lead to resignations and poor performance levels for that particular department.

Boots use the appraisal interview on a regular basis as a good source of finding out whether or where employees require help. If a member of staff has not been able to achieve set targets, it could be due to a lack of skills. Boots easily remedy this by giving training and there are many methods available, depending on the nature of the ability to be improved.

When Boots feel that its own courses are inadequate of improving individuals motivation it may bring in outside consultants to help improve the situation. Some staff will be encouraged to join college courses, which will be attended after work or an allowance of one afternoon or one evening will be given.

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Once a training course is finished, the progress of the attendees will be monitored by Boots managers & supervisors to see if they are applying the new skills satisfactorily. Boots realise that at this stage encouragement and extra help are needed for these newly trained employees, otherwise the training received can be lost if the employees do not fully understand what they have just learnt. Being offered training is a method of motivation in itself and Boots claim that staff takes advantage of this additional facility.

How motivational theories influence Boots approach to management

The ability to motivate employees is central to the role of Boots’ supervisors and managers. This is needed both for individual members of staff and, more frequently, for teams in the current working environment where team activities play an important part in departmental operations. The ability to motivate people comes from a greater awareness and understanding of individual behaviour patterns. It is also aided or hindered by the style of management used within Boots as well as the structural parameters designed by the senior management of the organisation.

The notion of motivation has been developed over a century of business practice and this has been studied by many theorists in an attempt to discover the perfect solution keeping staff motivated. Boots know that there is no such thing as a perfect solution, of course, because the managers are dealing with human beings, each of whom has a completely unique personality. This means that one solution would not suit all employees and so Boots encourage managers to use a variety of techniques to motivate all kinds of staff.

The senior management of Boots assists managers in their duties by providing a series of benefits and rewards for consistent levels of motivation for two reasons:

To allow the manager discretion in the treatment of staff at different levels

To encourage high standards from staff who will be rewarded for their efforts.

In addition, if it is recognised that not all employees are willing workers then a series of disciplinary procedures will be agreed for those employees who fail to respond to the encouragement given by the management of Boots.

The ideas of several major theorists have contributed to the change in approach taken towards people as human resources within Boots. Theories develop as a result of the weaknesses pinpointed in existing ideas. These are then incorporated into new theories and used as guidance mechanisms for senior management to establish good practice within their operations.

Many theories have been established within the last 100 years and it is not possible to consider each one of these. What is important in the study of motivation are the key names that have influenced, not only Boots’ approach to management, but also the majority of other organisations. Four major theories have remained at the forefront motivational techniques and each one is linked to a different style of management. They are:

Abraham Maslow
Frederick Winslow Taylor
Douglas McGregor
Frederick Herzberg.

Abraham Maslow’s hierarchy of needs

Maslow’s theories of motivation have been popular since the 1950s and are based on meeting people’s needs in the workplace. The theory suggests that unsatisfied needs can lead to dissatisfaction.

Maslow identified a range of needs that were largely hierarchical in nature:

Basic needs are for reasonable standards of food, shelter and clothing in order to survive. This level of need will typically be met in workplaces by the receipt of money in exchange for work done.

Security needs are also concerned with physical survival. In the workplace these security needs could include physical safety, security of employment, adequate rest periods, pension and sick schemes.

Group needs are concerned with an individual’s need for affection and love. Most people want to belong to a group. As organisations grow, individuals can lose their identity, becoming just another number or face in the crowd. Organisations therefore need to find ways of building individuals into groups and teams.

Self-esteem needs are based on an individual’s desire for self-respect and the respect for others. Employees have a need to be recognised as individuals and to feel important. This is where giving status to individuals and recognising their achievements is important.

Self-actualisation needs are concerned with personal development and individual creativity to achieve one’s full potential. In order to meet these needs at work, individuals need to be provided with the opportunity to use their creative talents and abilities to the full.

Taylor’s Principles

Frederick Taylor in his 1911 work advanced the view that employees are basically motivated by money. The job of management was to provide formal order and control in the working environment. Management did the planning and provided the support to show the workforce how best to do the job. Taylor felt that, with this clear line and staff organisational structure, productivity would increase because the employee would recognise that a higher output rate would lead to higher pay. Obviously, this approach tends to address what are perceived to be lower level needs and, by its very nature is far more relevant to labour intensive industries.

Taylor’s principles would support the use of these three pay systems:

Performance-related pay (PRP) is a scheme, which links output and performance to pay. Employees receive bonuses, which are dependent on their ability to reach specific targets. PRP rewards are good performance, so it should motivate employees to work harder. However, some critics argue that factors beyond an employee’s control, such as the breakdown of machinery, could affect their performance. Critics also argue that PRP categorises employees as good or bad performers and this can have a de-motivating consequence on upon those who fail to achieve their targets.

Piece rates provide employees with a variable income, payment is directly linked to output. Employees are encouraged to produce as much output as possible and maximise productivity. Although productivity is increased in this method, the standards of the product may decrease as employees strive to gain rewards.

Commission based pay, is often used when for sales staff and employees are paid a percentage of the value of the goods they sell. Commission-based pay motivates employees because their own performance and ability to sell the company’s products determine the level of their salary.

McGregor’s Theory X and Theory Y

The motivation of employees is normally the responsibility of the manager. He or she makes assumptions about an employee’s basic needs when deciding on a suitable motivation method. Douglas McGregor’s 1960 study, suggests that two types of employee exist, each possessing different needs. McGregor argues that the type of employee a person becomes is influenced by management style.

Theory X conveys a negative view of human nature, portraying employees as lazy, un-ambitious people who dislike work and need to be controlled through punishment. McGregor argues that if a manager treats employees as if they are naturally inclined to be idle and disinterested and believes that they do not want responsibility, then they will fulfil this role. It is self-fulfilling prophecy.

Theory Y argues that employees are not money motivated but gain reward from the job itself. Theory Y presents employees as self-disciplined, work appreciative people who crave responsibility and creative fulfilment. McGregor’s Theory Y is significant because it suggests that given the right conditions and management style employees can be motivated to work efficiently and productively.

Frederick Herzberg’s two factor theory

Frederick Herzberg carried out some important research into motivation. He identified a range of dissatisfiers associated with the context and satisfiers associated with the content of jobs.

Dissatisfiers include the following:

Autocratic or arbitrary company policy and administration.
Low pay.
Poor working conditions.
Antagonistic relations between different levels of employees.
Unfriendly relationships within the hierarchy.
Unfair management and supervisory practices.
Unfair treatment of employees.
Feelings of inadequacy.
Impossibility of growth and development.

Herzberg suggested that the existence of the above, to any great extent, would cause dissatisfaction which would, in turn, lead to absenteeism, poor levels of output, resistance to change and negativity in the workplace.

In contrast, Herzberg identified a range of the satisfiers associated with the content of the work that would encourage motivation:

These are:

Recognition of effort and performance.
The nature of the job itself – does it provide the employee with the appropriate degree of challenge?
Sense of achievement.
Assumption of responsibility.
Opportunity for promotion and responsibility.

The ways in which the employees of Boots are motivated

The Boots company offers pay and working conditions which are both highly competitive and above average. Boots are committed to an open and honest management system, which enables all employees to be well informed and to understand issues affecting the business. The company has progressive and competitive policies on performance and reward, designed to recruit, motivate, develop and retain high quality people. Such theory like Herzberg’s, outlines the management style within Boots today. Boots realise that the style of management adopted within the organisation affects general behaviour patterns and that is why the Human Resources Department does all it can to introduce new ways of motivating its staff. An example of how Boots do this is by rewarding employees who have reached certain targets with hygiene factors such as incentives as well as motivators such as the delegation of responsibility or praise.

The Potential for Conflict in Boots Human Resource Management

Unfortunately, it was forbidden by Boots to give me particular information about the potential for conflict in its human resource management. This is because; other competitors may be able to use such details to withstand a greater chance of attracting more customers in the same market. However, in any large organisation conflict is inevitable. Basically, the resources that can be devoted to this area are limited and everyone wants a large share of them.

The following shows the main areas for conflict:

Recruitment & Selection – This area of Boots is in a great position to reward employees with better jobs and more attractive salaries. In making decisions, the department is unlikely to please everybody. This can cause many problems within the business. For example – if Boots were recruiting internally for a sales representative and came up with five strong candidates it would mean satisfying one of them and dissatisfying four. This sort of method could quite easily cause conflict within the business, which is why external recruitment is sometimes the best but also, a more expensive procedure.

Theory X and Theory Y – The managers of Boots are at the forefront of potential conflict within the business. Many managers of any organisation may wish to believe that Douglas McGregor’s Theory X is the correct one to go by but others may argue that Theory Y is. This can cause managers to argue whether the employees of the business should be given more responsibility or whether they should be told what to do, how to do it and to do it in a certain amount of time.

Appraisal – This is the most common cause of conflict in any large or medium sized business including that of Boots. Employees sometimes wish to be left alone to get on with their job instead of being told how good they are at doing it. Therefore such employees will be against the idea of an appraisal system in the organisation.

There is always the potential for conflict in Boots whether an appraisal system is in use at the company. Employees may feel that they are working much harder than what the manger recognises and may feel like they deserve more appraisal causing disputes and disagreements. Also other kinds of disputes may tend towards that of favouritism or victimisation. Staff workers of Boots could be jealous of those who may look to be favoured by the employer and could feel victimised due to a lack of attention.

Departmental rivalry – The managers of Boots human resource department have the extremely difficult job of deciding which areas of the business gets the benefits of staff training and development. But these benefits for the different departments of Boots are limited therefore some departments miss out thus causing major conflict between all the departmental managers.