The paper "IT Firm and the Performance Appraisal System" is an outstanding example of a management case study. 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 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 the 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. 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 were required by the majority of employees there. The Wright and Nishii (2013) model emphasize 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 a 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 the 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 the outcome of the developed HR strategy, which intends to design an HR management practice or system that the company’ s management believes 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.
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