produce a report to enable the HR Director to make a presentation to the board

Activity 1

Written report of approximately 2,000 words.

A new performance management system is to be introduced into an organisation.

You are asked to produce a report to enable the HR Director to make a presentation to the board. The Director has asked you to research and include in your report:

• A description of at least two purposes of performance management and their relationships to business objectives.

Assessment criterion: 

1.1 Describe the purpose of performance management and its relationship to business objectives.

Describe at least TWO purposes of performance management and its relationship to business objectives. The description should include TWO from:

• Setting objectives
• Reviewing performance against those objectives
• Identifying development needs
• Setting new objectives

You need to relate to business objectives e.g. the employee needs to understand the part they have to play in meeting the overall objectives of the organisation. They should be informed how their objectives fit into the overall company objectives which will increase their motivation to meet their own.

• An explanation of at least three components of performance management systems.

Assessment criterion: 

1.2 Explain the components of performance management systems.

Explain THREE components of performance management systems. Consider the environment that the person works in – is it conducive to a good working atmosphere?

Components could be THREE from:

• Factors affecting individual performance
• Factors affecting team performance
• Training & development
• Job descriptions
• Informal and formal reviews
• Setting objectives
• Appropriate policies and procedures
• Performance Management data

• An explanation of the relationship between motivation and performance management with reference to at least 2 motivational theories.

Assessment criterion:

 1.3 Explain the relationship between motivation and performance management.

Explain the relationship between motivation and performance management, referring to at least TWO motivational theories.

Motivated employees:

• Work harder and are more willing to help out in difficulties.
• Want to achieve their individual objectives and goals.
• Perform more effectively.

You need to support this relationship by exploring at least TWO motivation theories, such as:

• Maslow
• Locke
• Herzberg
• Vroom
• Adams
• Taylor
• McClelland
• Mayo
• Pink

This list is not definitive so you can choose others as long as they are recognised theories. Choose the ones that mean the most to you.

You must ensure that the two explained motivational theories relate to performance management. In simple terms, explain what people need to perform and how is this implemented through performance management?

• An explanation of at least two purposes of reward within a performance management system.

Assessment criterion:

 2.1 Explain the purpose of reward within a performance management system.

Explain TWO purposes of reward within a performance management system, including what the benefits are.

You could include TWO from the following:

• Increases motivation
• Attracting talent and being an employer of choice due to pay, benefits, training, etc.
• Retention
• Motivation
• Productivity

• Identification and explanation of at least three components of a total reward system, one of which should be non-financial.

Assessment criterion:

2.2 Identify and explain the components of an effective total reward system.

Describe what a total-reward system is, i.e. financial reward + non-financial reward; one must be non-financial.

Describe at least THREE components of a total reward system, ONE of which should be non-financial.

• Financial rewardsare: pay, pensions, bonus, paid holidays, paid overtime, shift premium, healthcare, personal insurance, and company car.
• Non-financial rewards are: Training and development, employee of the month, praise, career progression, getting involved in company projects, flexible working.

• Identification and explanation of at least four factors that need to be considered when managing performance, both good and bad.

Assessment criterion:

3.1 Identify and explain the factors that need to be considered when managing performance.

Explain the factors that should be considered when managing good and poor performance. You need to ensure you address the factors in respect of managing performance.

Your explanation should be split into:

• Good:Financial reward; praise; deputising for seniors; teaching/mentoring/coaching others; work on projects; promotion etc.
• Poor:You should differentiate between capability (can’t do) and conduct (won’t do). Find out what the problem is: empathy; support; action planning (SMART targets); training; mentoring /coaching by a good performer; change of duties or job etc.

Ultimately, following the disciplinary process may be necessary and this may lead to dismissal.

You must include good and poor performance.

• A description of at least two sources of data (1 of which should be external to the organisation) required by individuals involved in performance and reward management processes.

Assessment criterion:

3.2 Describe the data required by individuals involved in performance and reward management processes.

Describe at least 2 items of data, including ONE external to the organisation.

You must describe the data i.e. what it is and what it is used for.

Examples could include:

• Internal:Absence records – to improve; payroll costs – to compare against budget; staff satisfaction survey – to gauge where improvements are required. Appraisal scoring system or data, disciplinary warnings, retention figures and training courses.
• External:Labour market – supply and demand; inflation rates – to gauge pay rises; competitor pay rates – to benchmark own rates.

One of the items of data must be external.

• An explanation of the frequency, purpose and process of performance reviews.

Assessment criterion:

4.1 Explain the frequency, purpose and process of performance review.

You must provide an explanation of:

• Frequency:should be fit for purpose: could be annual, 6 monthly or quarterly – state the range and use your own organisation as an example.
• Purpose:performance; development; new objectives and how they fit with organisation’s objectives. Identify any training needs.
• Process:Explain what should happen before, during and after the review. This process will be individual to each person and they can describe what the process is in their own organisation or one they are familiar with.