Rayner and Adam-Smith (eds): Managing and Leading People – Tutor notes
When considering respect for the individual, mutual respect, procedural fairness and
transparency of decision-making, it is not just about what is done but how things are
done. Typically, the standards of behaviour (norms) are reliant upon the organisational
culture and subcultures.
Respect for the individual may centre around the amount of input that the individual
has with regard to the PM process, and how the appraiser chooses his/her words to
elaborate on points made during the appraisal discussion. Mutual respect may be
demonstrated by an appraiser’s asking an appraisee to partake in a 360-degree feedback
process whereby the appraisee’s voice is heard and reacted upon accordingly.
Procedural fairness relates to the equity of the PM process. Ultimately, PM has to
include a certain degree of subjectivity but aims to provide clear and consistent criteria
and measurement. How employees are treated within the PM process is essential to the
sustainability of the process.
Transparency of decision-making refers to how judgements are arrived at and whether
decisions are made within the PM process. If a decision is changed after an appraisal
and signing off has occurred, problems may arise because of a misunderstanding of the
agreement. Subsequent trust may be completely eroded.
These four ethical principles help to provide useful advice about how to conduct the
PM process and maintain awareness of the human element in matching people with
performance.
When considering the nature of performance management, it is useful to start by
analysing the stated objectives of the performance management system itself. If a
company has recently introduced PM, why was it brought in? Are the stated objectives
for introducing PM consistent with its process and outcomes?
In terms of the controlling perspective, PM can be a useful process that enables
managers to control and manipulate employees’ performance. It can be manifested in a
number of ways – typically a top-down approach is adopted and tasks delegated and
measured accordingly. Everyday activities or tasks can be monitored and assessed in
line with long-term objectives. Managers can request (or demand) feedback on a
continuous basis. A manager–subordinate relationship is likely whereby the manager
determines the task agenda and provides feedback for the subordinate on how the
subordinate’s performance is being fulfilled against the objectives set. Authority and
responsibility relationships provide legitimacy for controlling work.
The controlling perspective may operate and fit reasonably well within a bureaucratic
organisation which prefers a scientific management mentality and culture. However,
the ‘eternal triangle’ posited by Herzberg (1968) suggests that human beings are not
completely rational in their approach to work. A balanced approach must consider the
mechanistic and economically-driven employees, together with the behavioural aspects
(group sentiments, feelings, an individual’s psychological contract, etc) and also
consider the person–job interface. There may be a combination of top-down and
bottom-up approaches here, and feedback obtained from both employees and managers.
Consideration may be placed not only on tasks but on teams, teamworking and culture.
The third perspective attempts to align individual and organisational needs, and can
therefore place much greater value on the contribution that the employee may make to
the organisation. In some organisations an employee may be recruited on the basis that
the recruiters believe that this person has something to offer, and the management’s
role is to provide the environment in which the person can flourish. In which case the
psychological contract is essential – there is an interchange of the manager–subordinate
so that the manager takes on a supportive and perhaps less judgemental role. The
philosophy of fitting the job to the person is much more important than fitting the
person to the job and controlling (limiting) his/her performance.
From a stakeholder’s perspective there must be consideration of the political and
business context of performance management. The shifting-sands nature of strategic
priorities may have a potential affect on longer-term performance planning and
performance management. Pay freezes, recruitment bans and other such measures may
change work requirements.
Typically, as the context changes and organisations change, one or more of these
perspectives may operate simultaneously, making the PM process more complex and
requiring greater flexibility.
7.3 CASE STUDY
Royal Bank of Scotland
To think about ...
What are the benefits and drawbacks of providing HR staff but not line
managers with performance management data?
The objectives of introducing an online toolkit would have to be considered. Are the
objectives focused on improving the HR manager’s job? Will the outcomes of this
toolkit then enable HR managers to interact with line managers so as to improve
organisational effectiveness and efficiency?
Some of the benefits of providing HR managers with the online toolkit are that it would
allow for a more detailed management information system on human performance,
possibly being able to audit both short-term and long-term outputs. Perhaps a more
objective approach could be taken to assigning people to jobs, staff development,
management development, competence development, identification of skills gaps,
consideration given to reward systems, succession planning, promotion and career
structuring. Also, it might allow for an evaluation of recruitment and selection
practices, and help to quantify (cost) all of the aspects mentioned previously (the tenet
of human capital management).
Most of the aspects above are process issues, and like any process can be abused,
misused, etc. To what extent are line managers important in assisting all the processes
mentioned? Often, line managers are the implementers, sometimes the assessors
(measurers), of performance – and not seeking their input may have a detrimental effect
upon achieving an objective assessment.
If there is no management buy-in, line managers may deliberately or unconsciously
hamper progress for individuals or teams. There is a danger that HR could be equipped
with valuable information but do nothing with it. Perhaps a collaborative effort is
needed to ensure a maximum utilisation of resources.
Performance management is a process to increase performance in organisations through
a rational controlling and measurement of work outputs. Performance management is
just one part of managerial activities.
Whether performance management is ‘good’ management depends upon whether the
process is carried out in an efficient and effective way. In this way, performance
management could be viewed as a managerial tool through which work can be divided,
subdivided, measured, recorded, and possibly further rewarded.
The process that managers go through in PM is important and may provide
opportunities for managers to demonstrate strong leadership skills. Perhaps the question
links to how managers carry out the PM process and how much commitment and
enthusiasm they can instigate in their employees. Associated with this type of practice
may be the utility of exercising coaching and mentoring skills.
Although some PM processes focus well on business and individual objectives, the
inclusion of training and development planning is vital too. The identification of
training and development needs and the subsequent meeting of these needs may assist
in developing the relationship between line manager and subordinate. Some jobs may
require daily monitoring and feedback, where PM is an intrinsic part of everyday
working life and could therefore be seen as essential management, not just ‘good’
management.
The links between PM and other related management and HR activities are important
(see Figure 7.1). Maintaining the appropriate balance between work and all other
organisational aspects remains part of the managerial prerogative.
The
main components of PM include:
 the setting of performance objectives (objective-setting, employee goals, etc)
 continuous discussion and debate around performance, feedback, etc
 the gathering of performance data, recording and documentation
 appraisal meetings
 possible further discussion, diagnosis, counselling, coaching, etc.
The five areas listed above may vary considerably in terms of format and style.
Because PM is a process, there is normally a logical sequence of events (objectives
have to be set before they can be measured). However, these time settings may be
organisation-/context-specific. It could be argued that all five aspects are important to
performance, and any weak link in the chain may affect the strength of the whole chain.
Looking beyond the context of the process itself, there may be considerable interaction
with other HR mechanisms (Figure 7.1), and this may impact upon the relative
importance of part or the whole of the PM process.
PM typically operates on three levels – the performance of individuals, of groups/teams
and of the organisation. Organisations rely upon the way in which these three levels
interact. If performance is increased, a logical question that follows is whether the extra
performance or output is suitably rewarded. If the consequence of producing greater
outputs is not rewarded, why should employees continue to perform at this higher
level?
If an organisation is going to reward performance, the levels of individual, team and
organisation performance have to be taken into account, as does the ability to objectify
performance measurement (and equitable associated reward). Other key factors concern
the time-frame for measuring outputs and rewarding employees.
During business consolidation and economic recession, where scope to perform has
been limited, how does an organisation deal with not having a reward?
There are alternatives to payment systems for recognising increased performance, such
as intrinsic rewards. Corporate culture may support recognition schemes, allowance of
special privileges for employees, etc.
As with all questions about payment schemes, the clarity, transparency and equity
remain essential, and if this can be tied into a PM system, then it may work
successfully. An integrated performance and reward strategy may prove to be effective.