Introducing a New Performance Management System A large organisation, which traditionally had a paternalistic approach and low levels of unionisation, decided to introduce a performance management system incorporating performance-related pay. This changed the nature of the previous incremental salary scales and led to the abolition of the annual cost of living-related increase. The new system incorporated an annual objective setting process, ongoing review and annual assessment with a reward link. The annual assessment determined two things.

a) Firstly, whether the individual could move up on the salary scale: one increment two increments would remain put or would move down one increment. There were careful descriptions related to performance which indicated which action should be taken in respect of each individual. This replaced the previous system where increments were automatic and there was no possibility of moving down an increment. b)

Secondly, the assessment was translated into a grade (AE) and each grade was linked to an amount of performance-related pay, expressed as a percentage of current salary. There were however limits on the number of people in any department who could be put into each category. So, for example, A grade, which represented outstanding performance, was only available to 5% of the staff in any department. The system was introduced very quickly using a consulting firm. However, 2 years after implementation there are high levels of dissatisfaction from employees, and some line managers have also expressed serious concerns about their role in the system and the system itself. 2

To tackle the problem a different consulting firm was used as the previous one had disbanded. They carried out some research and established the following: Objectives were not always agreed at the beginning of the period, sometimes they were agreed at the end or not at all Reviews were not generally carried out during the year

Those departments that did set objectives found high levels of competitiveness between staff and an unwillingness to support others

Changes to the incremental system were widely resented, except for a few highfliers

Many felt the system was not used fairly or consistently Many employees, including line managers, did not understand why the system was introduced, others thought it was to do with cost cutting

All felt the grade limits were unfair

Employees did not feel line managers were objective in their assessments

Some line managers expressed discomfort with the process Most employees felt their development needs were ignored

The reward levels were too small to motivate employees.

Case Questions

1. What do you see as being the primary weaknesses of the new performance management system at this company? Why? How do they affect the employees? Organize and explain how they affect other HR functions.

2. As an external HR consultant to the company, list and rank by priority the recommendations you would make to the Director of HR as to how the system should be modified and relaunched? Establish a timeline for the recommendations.

please answer the two given questions which are RELATED to the given case! please please please provide a good answer i will upvote introducing a New Performance Management System A large organisation, which traditionally had a patumaisto approach and low levels of unionisation, decided to introduce a performance management system incorporating performance related pay. This changed the natur of the previous Incremental salary seas and led to the abollon of the annual cost of ving-related increma. The new system incorporated an annual objective setting process, ongoing review and annual assessment with a reward link. The annual Assessment determined two things. a) Firstly, whether the individual could move up on the salary scale one increment tweinchements would remain puter would move down one increment There were careful descriptions related to perfomandathich indicated which action should be taken in respect of each individual This replaced the previous system where norements were automatic and there was no possibility of moving down an increment b) Secondly, the assessment was translated into a grade (A-E) and ench grade was linked to an amount of perfomance-related pay, expressed as a percentage of ourrent salary There were however limits on the number of people in any department who could be put into each category. So, for example. A grade, which represented outstanding performance, was only avallable to 5% of the staff in any department. The system was introduced very quickly using a consulting fim. However, 2 years after implementation there are magh levels of diecaslacion from employees and some line managers have also expressed senous concerns about their role in the system and the system sell. To acide the problema different consulting firm was used as the previous one had disbanded, They carried out some research and established the following . Objectives were not always a greed at the beginning of the perlod sometimes they were agreed at the end of not all Reviews were not generally carried out during the year Those departments that did set objectives found high levels of composiveness between stall and an unwillingness to support others Changes to the incremental system were widely resented excent for a few hghitlers - Many felt the system was not used fairly or consistently Vany employees including line managers adnot understand why system was introduced others thought was lo do with a cutting Altes the grade limits were unfair Employees did not selline managers were objective in their esaments Some line managers expressed dscomfort with the process Most employees tell their development mods were dignorod The reward levels were too small to motivate employees Casa Questions each question worth 25% of the exam grade w do you see as being the primary weakness of the new portomanud management system and when they atlice e cheyecan Ouganza and metal how the other HR function. 2 As an external HR Cent company and Prothermodation would tahun e system should be modified and relaunchedz Ebisha umeme for the recommendation