Originally appraisal was carried out almost entirely by managers; however, the flattening of organisations, as middle management has been ‘shed’, has meant that remaining managers often have too wide a span of control to appraise effectively. Since the 1995 study quoted above, therefore, self-appraisal, peer appraisal, upward appraisal, and 360 degree appraisal have grown in importance.
Asda wants everyone to be pulling in the same direction. It therefore sets out a mission statement and values statement identifying the overarching aims of the company. This will be a brief statement like:
“ We are successful because we provide the very best value food, clothes, and general merchandise and above all ensuring that our customers receive exceptional standards of service. Our success and continued growth is based on the effort, commitment, and personalities of all our colleagues”.
Given the mission and values, Asda can create objectives at every level within the organisation- right down to personal objectives for individual members of Asda. It is through these objectives that the success of Asda can be monitored and evaluated, as well as measuring the performance of individual members of Asda.
A well-developed performance management system will include the following:
- A statement outlining Asda’s values
- A statement of it’s objectives
- Individual objectives which are linked to Asda’s objectives
- Regular performance reviews throughout the year
- Performance-related pay
- Training and counselling
2) Self appraisal
This involves employees assessing themselves against a series of criteria. These results can then be compared with the views of others. People are often surprised at how others se them. Asda encourages its employees to establish meaningful goals and then to evaluate performance in meeting these goals. Employees who are given work assignments to do are also often encouraged to evaluate their own performance in carrying out these assignments to the required standard. The benefits of using this approach are as follows:
- The employees take more responsibility for their own work area and for monitoring their own performance in the area. This is clearly motivational.
- The employees may have a greater understanding of their own work area and their job than an external appraiser may have. This is increasingly the case where employees are working in highly creative, individual situations, developing interpersonal relations that are not always easy to scrutinise and measure
- Self-evaluation is cost effective. It avoids the wasteful expense (including time) of external evaluators.
- Self-evaluation enables individuals to develop a much clearer picture of exactly what it is they are doing- which makes work definition much better.
3) Peer appraisal
This involves employees on the same level within the organisation assessing each other. Workers within a particular department may observe each other’s tasks and duties. Without peer evaluation there would be a danger some employees at Asda do all the work and others sit back and take all the rewards. It is therefore possible to devise forms for employees to evaluate each other’s inputs. This approach is usually effective because employees, as a rule, do not like working with other employees who do not like to pull their weight
Peer evaluation can be very effective in that it creates a collaborative approach at work. People don’t feel they are being judged from above. It can lead to a process of critical friendship whereby individuals will help each other to improve performance. There are a number of ingredients that help peer evaluation at Asda to be a success:
- Respect for each other
- Trust in each other
- Non-competitive atmosphere
- Willingness to take risks
- Confidentiality
- Listen and give full attention
- Say what you feel
- Value each other’s contribution
- All members participate
- Be honest
- Don’t interrupt
- Feel free to challenge
Unfortunately, peer evaluation can often result in low levels of criticism so that performance is judged in too favourable a light. Also, peer evaluation can create an approach whereby those who work in the peer evaluation system build up a defensive position against the organisation- to justify their own decisions and performance rather than viewing things from the organisation’s side.
4) Target-setting for individuals and groups
Performance management is a term that is used to describe the process in which employees participate with their superiors in setting their own performance targets. These targets are directly aligned with the stated goals of the teams, units or departments they work for and, hence, with organisational targets. There are three broad approaches to staff appraisal, based on personal attributes, skills or performance. They are not necessarily mutually exclusive. Schemes may contain elements of each. Asda uses different schemes for different groups of employees:
- Personal attributes- the designers of the scheme identify the personal attributes that affect job performance. These are used as the basis for appraisal. Some examples are:
- Reliability
- Judgement
- Application
- Initiative
- Adaptability
- Disposition
There are several criticisms of this approach. For example, the attributes are open to wide interpretation by the many managers undertaking appraisal in different parts of the organisation. The system is also not consistent and, therefore, potentially unjust.
- Skills- appraisal focuses on the employee’s proficiency in the skills relevant to the particular job. The person doing the appraisal, usually the manager, observes the employee over a period of time and records his or her judgement of the employee’s competence
- Performance- the basis of appraisal is the achievement of agreed performance standards or targets. Advocates of this approach point to its objectivity. However, it is difficult in some jobs to find a satisfactory measure of individual performance
5) Measuring individual and group output/productivity
Often within organisations there is a considerable amount of dissatisfaction about the way different individuals or groups are rewarded in the system, which may seem to defy logic. Many appraisal schemes include behaviour scales because it is felt that behaviour rather than personality should be appraised and rewarded.
Behaviour scales describes a range of behaviours that contribute, to a greater or lesser degree, to the successful achievement of the cluster of tasks that make up a job. Supervisors carrying out an appraisal are asked to indicate which statements on the specially designed form most accurately describe a subordinate’s behaviour. Asda uses a competency-based approach to measuring performance.
Job evaluation is the process of assessing in Asda the value of one job in relation to another, without regard to the ability or personality of the individuals currently holding the position. It results in a pay range for each job. An individual’s personal worth is recognised by awarding increments within the fixed range for the job.
Merit rating is a system whereby the individual employee is awarded increments or bonuses based on a systematic appraisal of his or her developed skill level and performance. Merit rating usually operates within a job-evaluated pay structure. Job evaluation sets the pay bands while merit rating determines the position of the individual within the band.
Forms of staff development
There are ways in which large businesses like Asda use to develop staff skills, and experience, which offer them wider opportunities for career progress and promotion. For example:
- Job rotation: changing jobs at regular intervals. This makes the job less boring and provides staff with new experience in different areas of the business. For example, employees in the finance department are usually rotated between different departments such as saving or current accounts
- Job enrichment: gives greater responsibilities to the person who is doing the job to provide him or her with a sense of achievement
- Job enlargement: makes the job as big as possible by adding more tasks and responsibilities, but without sense of achievement.
At Asda, performance management and development applies to everyone. The aim is to make sure that all employees:
- Are aware of what the company is trying to achieve in its strategic plan
- Make plans to focus on their own part in making the company successful
- Have an on-going review of their progress
There is an emphasis on continual improvement and staff are encouraged to develop themselves to do their jobs better.
The steering wheel is a central idea in Asda’s planning. It is simple the company’s way of illustrating the four main areas of concern that the business has: customers, operations, finance and people (its employees).
Steering Wheel:
Company objectives are communicated through the organisation from the top downwards:
- Directors set out the strategic plan for the company- called the 'Corporate Wheel.’ This shows what the company aims to achieve for the next year in each of the four main areas. The plan is then cascaded down to:
- Heads of departments who plan to meet their departmental targets
- To section managers who set out plans for their teams
- And finally to the teams on the shop floor, in the warehouse and in the offices.
The performance management process requires each employee to:
- Set out their individual objectives for the coming period- ‘short simple descriptions of what needs to be achieved and how you will know when you have achieved it’
- To write a personal development plan or PDP- ‘ a plan which describes how you will develop your skills to improve business performance and achieve your objectives.’
These plans will vary depending upon the employee’s position in the organisation.
It may seem obvious that staff should be motivated, from the point of human resources management this is only true if motivation leads to improvements in the work- such as better quality products or more efficient production. In general it has become accepted that, although a workforce that is not motivated will work, the quality and efficiency of work improves with motivation. It is therefore the role of the human resources management to understand what motivates.
Over the years a number of management theories have been put forward in an attempt to explain the nature of motivation and suggest ways in which it may be improved.
Frederick Taylor’s ‘Principles of scientific management’ Theory
Taylor was an American engineer who studied production methods in the steel industry. He was interested in job design and his theory suggested a production-line approach (conveyor belt).
Taylor believed that complex jobs would be most efficiently performed if they were broken down into separate operations so that very little could go wrong. Each operation would be performed by a separate employee. The whole job could then be completed in a series of stages by a number of employees working together.
There would be a number of benefits:
- Each task would be so simple that it would require little training
- Since workers required little skill they could be easily replaced if necessary
- If jobs are standardised output could be easily measured, predicted and controlled.
However, production-line jobs tend to be low-skilled, repetitive, and monotonous and people do not always perform at their best in these situations. Disadvantages may be:
- Low motivation as a result of low job satisfaction- much of the job is outside of the workers’ control, for example the speed of the production-line may be set from outside
- Errors could also be made on the production-line costing a lot of money
- Too much stress for employees as it is a boring job which also might lead to errors
Therefore, this leads to a lack of motivation.
Taylor believed monetary reward was an important motivating factor that would drive the system. Higher rates of pay could be offered as an inducement for increased rates of output. He used workers who were prepared to work hard to set a standard for others: ‘rate busters’ who would destroy any informal agreements about ‘systematic soldiering’ established by informal groups of workers.
Today, you still find relics of scientific management- for example at the checkout of Asda where the till operator simply follows the instructions given by an electronic screen that tells him or her what steps to carry out in processing cheques, receipts, etc. this makes the process quick and customers are satisfied with the service they have received.
Abraham Maslow’s ‘Hierarchy of Needs’ Theory
Maslow developed his ‘Theory of Human Motivation’ since 1943 and has been popular since the 1950’s. it is 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/physiological needs- are for reasonable standards of food, shelter and clothing in order to survive. This level of need will typically be met in Asda and other workplaces by the receipt of money in exchange for work done.
Employees at Asda are paid an acceptable wage that will not only provide for them in the short-term but also in the long-term.
- 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.
Asda ensures the safety of everyone at the workplace including customers and so it has security guards working there and uses cameras to not only prevent crime but to also ensure that everyone is safe from harm.
- Social/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.
Asda makes sure that all employees are a helpful hand and so puts them into groups by working in departments alongside each other. Not then will employees see each other as colleagues, but also as friends.
- Self-esteem- needs are based on an individuals desire for self-respect and the respect of 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 are important.
At Asda employees make sure they work to their best potential and in this way they are given promotions, bonuses and fringe benefits as well as certificates. Certificates of achievement can be used for future reference when applying for another job and the likewise.
- Self-actualisation- needs are concerned with personal development and individual creativity to achieve one’s 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.
If an employee at Asda wants to fulfil something, not only for the company but also for themselves, and has completed a project their talent would be recognised throughout the company, which will provide positive results for them in the future.
‘Maslow’s Hierarchy of Needs’
This theory was not designed with the work situation in mind, but has since been used in an attempt to motivate workers.
Frederick Herzberg’s ‘Two factor Theory’
Herzberg carried out some important research into motivation. He identified a range of dissatisfies associated with the context and satisfiers associated with the content of jobs. His two theories concern ‘job design’ and ‘satisfaction’.
Dissatisfiers or hygiene factors include the following:
- Autocratic or arbitrary company policy and administration
- Low pay
- Poor working conditions
- Antagonistic relations between different levels of employees
- Unfriendly relationships with 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 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
Herzberg’s Theories give rise to the following notions:
- Job rotation: changing jobs at regular intervals. This makes the job less boring and provides staff with new experience in different areas of the business. For example, employees in the finance department are usually rotated between different departments such as saving or current accounts
- Job enrichment: gives greater responsibilities to the person who is doing the job to provide him or her with a sense of achievement
- Job enlargement: makes the job as big as possible by adding more tasks and responsibilities, but without sense of achievement.
Under time-pay an employee at Asda is paid a fixed amount per hour, week or month. Overtime rates may be paid for work outside the normal hours. The advantages of time-rates are that they are easy to calculate and the worker is guaranteed a certain wage provided the hours are worked. The main disadvantage of time-rate is that the worker gets paid the same amount no matter how much is done. There is no monetary incentive to work hard
Piece-rate systems reward the employee according to the work done. Examples include commission on sales and payments to a stacking goods worker for the number of goods stacked. The advantage of piece-rate systems is that they encourage effort by providing higher wages to successful workers.
The disadvantages of piece-rates are that the worker’s wage is uncertain, and essential tasks such as paperwork or cleaning may be ignored if there is no extra payment. Work may be rushed, resulting in poor-quality goods and services. Many jobs are difficult to measure and because of these advantages many few workers are paid completely by piece-rates
Employers at Asda try to obtain the advantage of time-and-piece-rates by paying a basic wage, but giving workers the opportunity to earn extra money by working harder. Typically the incentive will account for up to 25 per cent of the total wage:
- Bonuses are extra payments for workers who reach a set target for production or sales
- Profit-related pay scheme give workers a share in the company’s profits. This makes them more aware of the business’s need to make profits which is an advantage for Asda
- Merit payments are given to workers and managers who are believed to have performed exceptionally well. They are sometimes given in the form of fringe benefits
Fringe benefits are given in addition to salary such as company cars, cheap mortgages, discounts on company products, subsidised canteen and sporting facilities and free or cheap health insurance. Asda gives employees discounts on its products.
At Asda most motivation is financially linked but sometimes individuals want to be recognised as an individual and want to be responsible for themselves in one way or another.
Douglas McGregor’s ‘Theory X and Theory Y’
Based on detailed research into managers in action, Douglas McGregor divided managers into two main types. Theory X managers tend to have the view that:
- The average person has an inherent dislike of work and so will avoid it if at all possible. Hence management needs to emphasise productivity, incentive schemes and fair day’s work, and to denounce restrictions on output
- Because people naturally dislike work, most people must be coerced, controlled, directed and/or threatened with punishment to get them to work towards business objectives
- The average person likes to be directed, wishes to avoid responsibility, has little ambition and, above all, seeks security
Against this pessimistic view of human motivation and its implication for the management of Asda and other organisations, McGregor proposed an alternative Theory Y. The underlying emphasis here is on ‘integration’ to replace direction and control. The assumptions about human motivation in Theory Y are as follows:
- Physical and mental efforts in work are as natural as play or rest. The ordinary person does not dislike work; it all depends on the conditions under which work takes place- these may be enjoyable or not
- External control is not the only way to get people to work. If they are committed to objectives, they will be motivated to work towards achieving them
- The most significant reward that will motivate people to work is the satisfaction of an individual’s self-actualisation needs. This can be the result of working towards an organisation’s objectives
- The average human being learns, when given the opportunity, to accept and- more importantly- to seek responsibility
- Many people can contribute to a business’s objectives when given the chance
- The average person’s potentialities are currently not being fully used
This is what individuals (Theory X and Theory Y Managers) at Asda say about the theory:
- ‘Only money motivates people’
- ‘I try to find out about people’s aspirations’
- ‘I appeal to the human side of the individual’
- ‘Every employee has different drives’
- ‘Threatening to take away privileges really works’
- ‘Bonuses get people to put the effort in’
The potential of McGregor’s theory makes Asda far more effective by unleashing the people who works for it. Asda needs to see itself as interacting groups of people enjoying ‘supportive relationships’ with each other. Ideally, Asda’s members will see its objectives as being personally significant to them.
The work of these people in the field of motivation suggests it is important to link rewards closely with performance. Successful management involves providing meaningful and valued rewards to employees at Asda. Employees need to have the opportunity to engage in ‘good performance’, and expectations must be clearly communicated to employees. Rewards must be clearly and visibly linked to performance.
Employees high-involvement in Asda leads to the belief that:
- People can be trusted to make important decisions about their work activities
- People can develop their own knowledge to make important decisions about managing their work activities
- When people make decisions about the management of their work, the result is greater organisational effectiveness
This approach is associated with the term ‘empowerment’.
