IT Firm and the Performance Appraisal System - Case Study Example

Case Studies Analysis Name: University: Date: Case Study One - Analysis Introduction The reviewed company has expanded swiftly in its specialist market segment, but its HR policies have failed to maintain the pace. The company have hired HR consultants to assist in developing an effective performance appraisal (PA) system capable of helping managers to set performance objectives, formalise the making merit-based pay recommendations process as well as improve employee development. The designing of the system involved both the company’s senior management and the consultants. According to Iqbal et al. (2013), performance appraisal creates a reward system, which integrates the effort of the employees and managers to a common organisational goal. To realise high organisational performance goal, performance appraisal is an essential component of HRM. The performance appraisal together with information gathered offer basis for training and development, recruitment and selection as well as motivating human resource by means of proper and correct rewarding of their performance. This paper uses ‘Intended HR practices’ from the Wright and Nishii (2013) HRM-performance model to analyse ‘the IT firm and the performance appraisal system’ case study. Analysis The new PA system at the company was based on setting objectives of individual performance yearly (a management-by-objectives system), and employees were allowed to participate in setting such goals and managers were required to watch closely the progress of the set goals after every three months. After the financial year, the new system required the company’s managers to meet with their team members to deliberate accomplishment in contrast to the planned goals. Appraisal interviews were conducted after a year, and the appraisal results exhibited the workers were progressively losing confidence since they were certain that nothing positive would emerge from the new PA system. In consequence, the best performing employees started resigning to seek better salary and conditions to another place considering that the labour market for talented programmers is exceedingly healthy. A challenging employee turnover was taking place in Division X; managers had rated 60 per cent of their employees as outstanding, whilst expensive training and development was required by the majority of employees there. The Wright and Nishii (2013) model emphasizes that the existing gap between management intention and action is major; therefore, they are destructive to employee behaviour as well as attitudes and eventually to performance outcomes. Recently, practitioners and scholars as cited by Boxall and Purcell (2011) have increasingly documented the significance of effectively managing the human capital for performance in the organisation. According to Kehoe and Wright (2013), organizations can utilise commitment- and performance-oriented HR practices to bring about organisational effectiveness. With view to the case study, employees’ behavioural and attitudinal responses to the new PA system depended on the HR practices, which the staffs perceive to subsist in their work context. The part of Wright and Nishii (2013) HRM-performance model that this case study fits is the intended HRM practices. According to Kehoe and Wright (2013), since the perceptions of employees with regard to HR practices essentially follow implementation of managers’ HR practice, employees’ perceptions are temporally near to, and subsequently inclined to be predictive of, their behavioural as well as attitudinal outcomes as compared to the ratings of HR practice as offered by the managers. As argued by Wright and Nishii (2013), the measures that are actually implemented may be interpreted and perceived in a different way by every staff in the team. The connection between the perceived and the actual HR practices results in ‘communication challenge’. Intended HRM practices are practices that represent outcome of the developed HR strategy, which intends to design an HR management practice or system that the company’s manager believe will successfully stimulate the desired employee responses. In view of this, the company in the case study, failed to proactively examine the situation and to formulate a particular set of HR practices that could result in employee responses crucial for organizational success. According to actual HRM Practices, not every intended HR practices are implemented, and those implemented normally contrast from the actual intention (Bach & Edwards, 2013). In the case study, the company’s managers failed to note the existence of variance, which according to Wright and Nishii (2013) normally arises from the fact that the HR practices have to be implemented by several persons who are likely to be inconsistent in their implementation effort. As a result, the actual HR practices began varying across individual implementers as evidenced in Division X. Theoretically, the objective of designing and implementing HR practices to bring about positive attitudinal responses, improve cognitive skills crucial for the organization and job, as well as improve employees’ contextual behaviours. In the scenario, the new PA system failed to do as intended; this, affecting operational performance measures like productivity. According to Wright and Nishii (2013) HRM-performance model, for outcomes at organisational level to accrue, employee reactions must adequately be complementary or consistent across each other so as to achieve the intended outcome. The company did not focus on job group as suggested by Wright and Nishii (2013); therefore performance outcomes at the job group level were not objective. Training as evidenced by the case study plays a crucial role in the life of the organisation (Ahmad & Bujang, 2013). As mentioned by Seotlela and Miruka (2014), employee performance management is an important part of the work that should be continuously monitored. As established by Longenecker and Fink (1999), successful PA system can be grouped into three crucial components: managerial practice, systems design as well as appraisal system support (Flaniken, 2009). Imperatively, every employee has to understand specific goals of performance appraisal, and these specific goals can enable the managers to choose performance criteria capable of supporting the objectives of the organisation as well as increasing the managers’ motivation to conduct the appraisals appropriately (Cintrón & Flaniken, 2009). Conclusion In conclusion, the paper has used ‘Intended HR practices’ from the Wright and Nishii (2013) HRM-performance model to analyse ‘the IT firm and the performance appraisal system’ case study. As evidenced in the paper, the relationship between the organisation’s strategy and the appraisal system is utilised as a strategic tool for achieving the organisation’s goals. Successfully implementing new PA system is crucial for promoting flexibility, communicating values as well as capitalising on employees’ contributions and potentials. With regard to the case study, implementing new HR systems is made hard by individuals tasked with actual execution of practices. Besides that, new practices affect employees’ attitudes and behaviours because they have to learn new unfamiliar behaviours with unidentified efficiency, and as a result, elicit resistance. References Ahmad, R., & Bujang, S. (2013). Issues and Challenges in the Practice of Performance Appraisal Activities in the 21st Century. International Journal of Education and Research, 1(3), 1-8. Bach, S., & Edwards, M. (2013). Managing Human Resources: Human Resource Management in Transition. New York: John Wiley & Sons. Boxall, P., & Purcell, J. (2011). Strategy and human resource management (3rd ed.). Hampshire, UK: Palgrave Macmillan. Cintrón, R., & Flaniken, F. (2009). Performance Appraisal: A Supervision or Leadership Tool? International Journal of Business and Social Science, 2(17), 29-37. Flaniken, F. W. (2009). Performance Appraisal Systems in Higher Education: An Exploration of Christian Institutions. Dissertation, University of Central Florida, Florida. Iqbal, N., Ahmad, N., Haider, Z., Batool, Y., & Qurat-ul-ain. (2013). Impact of performance appraisal on employee’s performance involvingthe Moderating Role of Motivation. Arabian Journal of Business and Management Review, 3(1), 37-56. Kehoe, R. R., & Wright, P. M. (2013). The Impact of High-Performance Human Resource Practices on Employees’ Attitudes and Behaviors. Journal of Management, 39(2), 366-391. Seotlela, R. P., & Miruka, O. (2014). Implementation Challenges of Performance Management System in the South African Mining Industry. Mediterranean Journal of Social Sciences, 5(7), 177-187. Wright, P., & Nishii, L. H. (2013). HRM and Performance: Achievements and Challenges. In D. E. Guest, J. Paauwe, & P. Wright, Strategic HRM and organizational behavior: integrating multiple levels of analysis (pp. 2075-2087). Chichester: Wiley. Case Study Two - Analysis Introduction The case study analysis focuses on a firm having 9 partners and approximately 150 employees, but the people management activities lack professional support. The new HR manager has told the staff about the importance of career development programmes, and as a result the employees have been meeting the partners to inquire about personal development. According to Armstrong (2011), the best practice approach asserts that there exist particular HR activities that comprehensively support companies in achieving competitive advantage irrespective of the industry or organisational setting. Basically, best practice models hint at the close relationship between organisational performance and HR practices, and normally are related to high commitment management. On the other hand, best fit approach focuses on the development of HRM policies in line with the business strategy. The ‘best-fit’ approach as mentioned by Sajeevanie (2015) questions the universality supposition of the best-practice approach, and it stresses the contingency fit between the organisation's development stage and HR activities, the firm’s external environment and internal structures. In this case study analysis, the focus is on whether the case illustrates the best-practice and best-fit perspectives of HRM and what Sue and the partners should have done differently. Analysis With regard to how this case illustrates the best-practice and best-fit perspectives of HRM; best practices exhibited in the case include employment security, selective hiring, personal development, and employee involvement. As stated by Hameed and Waheed (2011), personal development is a crucial function of HRM that focuses on developing the abilities of the organisation and an individual employee. Therefore, personal development can result in improved performance since when the staffs; skills are more developed it results in increased job satisfaction and commitment (Boxall & Purcell, 2016). Increasing employee performance through personal development as suggested by Sue is crucial in contemporary organisations and always leads to organisation effectiveness. The new HR manager understand Sue the essence of improving the company’s employee selection practices by using tests to measure cognitive ability instead of overlying on university grades or experienced job applicants. The seven HRM practices by Pfeffer’s (1994) are internally aligned to each other. For instance, when a company promises employment security they must focus on selective hiring of new employees (Ahmad & Schroeder, 2003). According to Ahmad and Schroeder (2003), it is very challenging to retain employees for long time unless their behaviour, values, and attitudes fit with those of the firm. For that reason, identification of such qualities must be integral part of the firm’s recruitment and selection process. According to Albrecht, Bakker, Gruman, Macey, and Saks (2015), employee engagement can eventually offer the key to understand how effective HR practices may result in improved performance both at individual and organisational level. In terms of best-fit, success of the case firm depends on recruitment of good employee, remunerating them well, and retaining high performers. Participation as a component of best-fit approach supports employees’ core competence as well as productivity sustainable competitive advantage and a quality that is innovative as the key strategic goal. The partners desire for sustainable competitive advantage but are reluctant to use organisational resources because according to them they offer employees’ best development through the experience they get in the company. There is no strategic fit in the company due to lack of relationship between the organisation’s competitive strategy and HR strategies (Paauwe & Boselie, 2002). In terms of what Sue should have done differently, she should have avoided talking freely with employees concerning career development programmes in her previous job; rather, consult with the partners on how they could develop the skills of the employees further. Sue possibly ignored the fact that high performance work practices (HPWPs) is an effective way of ensuring effective management of employees so as to become very productive in the organisation (Timiyo, 2014). Besides that, Sue should have understood that suggesting further career development could result in alternating employees’ treatment that can bring about demotivating effect and exhibit discrepancy in corporate culture. Before talking to the employees, Sue should have first convinced the partners to effectively utilise organisational resources to improve employees’ performance. This is because of the fact that some best practice approach could be superior solution at the public sector, but at private sector only some elements of best practice (such as hiring, training, rewarding and so forth) could be effective. According to the partners, the best development at the company occurs through experience offered to employees; therefore, there is no need for personal development. That perception is certainly misleading because no company can succeed in the contemporary business environment without embracing best practice. According to reference, there is need to embed engagement in HRM practices like training and development, personnel selection and performance management. Basically, developing personal development programmes facilitate the development of behavioural scripts as well as skills and motivation to use attained behavioural scripts and skills at the workplace. Gollu and Kayi (2012) assert that investing in personal development is important if the company seeks to develop and maintain the abilities, knowledge and skills of the individual employees. Normally, when employees see that their employers are offering relevant and sufficient training opportunities, they become reluctant to leave their work. Therefore, personal development makes employees feel taken care of and important with regard to having opportunities to further develop their skills and abilities. There exists a relationship between employee motivation as well as personal development trainings, as observed in Gollu and Kayi (2012) study. Conclusion In conclusion, the case study analysis has focused on whether the case illustrates the best-practice and best-fit perspectives of HRM and what Sue and the partners should have done differently. As mentioned in the paper, a best fit strategy is the one that is aligned to the strategy’s contingency considering that neglecting internal capabilities as well as environmental forces may result in HR failure in the business market. The case study analysis has exhibited that the concepts of best fit and best practice must be examined and adapted so as to suit the needs of the organisation and facilitate realisation of competitive advantages by means of human resources. Imperatively, employee performance defines the failure or success of the organisation; therefore, it is imperative to invest on personal development programmes. References Ahmad, S., & Schroeder, R. G. (2003). The impact of human resource management practices on operational performance: recognizing country and industry differences. Journal of Operations Management, 21, 19–43. Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage An integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35. Armstrong, M. (2011). A Handbook of Human Resource Management Practice. London: Kogan Page. Boxall, P., & Purcell, J. (2016). Strategy and human resource management (4th ed.). Hampshire, UK: Palgrave Macmillan. Gollu, E., & Kayi, A. (2012). Impact of Personal Development Trainings on Employee Motivation: A Case Study from Turkish Pharmaceuticals Sector. The Journal of International Social Research, 7(33), 635-642. Hameed, A., & Waheed, A. (2011). Employee Development and Its Affect on Employee Performance A Conceptual Framework. International Journal of Business and Social Science, 2(13), 224-229. Paauwe, J., & Boselie, P. (2002). Challenging (Strategic) Human Resource Management Theory: Integration of resource-based approaches and new institutionalism. Thesis, Erasmus University, Rotterdam. Sajeevanie, T. (2015). Strategic Human Resource Management and Theoretical Background: A Critical Review Perspective. Proceedings of the Third Asia-Pacific Conference on Global Business, Economics, Finance and Banking (AP15Singapore Conference), (p. 107). Singapore. Timiyo, A. (2014). High Performance Work Practices: One best-way or no best-way. IOSR Journal of Business and Management, 16(6), 8-14. Read More