Performance Assessment at City Couriers
City Couriers, based in a capital city in Australia, is a rapidly growing commercial parcel collection and distribution business. Employing 600 people, it has operated successfully throughout Australia since it was established seven years ago. The firm has separate departments covering customer service, parcel collection and distribution, vehicle maintenance, accounts, legal, marketing and human resources. Most of its line employees and supervisors work in customer call centres, distribution centres and vehicle maintenance facilities located strategically across the country. The firm could best be described as having a cost-defender competitive strategy, a mechanistic organisational structure and a traditional management culture.
Rob Jones, City Courier’s human resource manager, is proud of his and the form’s achievements. When it comes to people management, Rob’s approach is down-to-earth and pragmatic. Previously a despatch driver himself, Rob has little time for managers who spend their time reading the latest management books, chasing university degrees or agonising about the options for ‘best practice’ people management. Rob also believes in ‘buying’ rather than ‘building’ skilled staff. In-house training and development, he says, is just a waste of everybody’s time – and the firm’s money.
He is especially proud of the one-page form that he has designed for use in the firm’s once-a-year performance assessment round. The form, which is reproduced below, is applied to all of City Courier’s non-managerial employees, including call-centre staff, parcel despatch people, drivers, vehicle maintenance workers and administration staff. The form is straightforward and can be completed in just a few minutes, so that supervisors are not tied down in unproductive paperwork. The assessment outcomes are then used to determine which employees will receive the $5000 annual bonus that the firm pays to its best performers and which employees will be dismissed. Under Rob’s system, the top 20 per cent of employees get the bonus and the bottom 10 per cent are ‘let go’.
But this year’s performance assessment round did not go as smoothly as Rob might have hoped. This year, for the first time, three employees, all known to each other and recruited from the same competitor firm less than eighteen months before, challenged the accuracy of their assessments, wrote a letter of complaint to the managing director, and threatened legal action unless changes were made to the way in which they and their fellow employees are assessed. To Rob’s astonishment, the problem, they argued, lay in the form itself. Rob’s initial inclination was to dismiss the complaints as nothing more than sour grapes, since none of the complainants has made it into the bonus cut. Then, feeling his integrity has been challenged, he decided to commission a human resources consulting firm to confirm the worth of his assessment form and to provide support for his management of performance at City Couriers.
Description
Students are required to submit a 2000 word written report on the same case study that formed the foundation of their group two pages outline. In the individual report, students will:
- Provide a more detailed analysis of the performance and reward management issues identified by the group in Assessment 2 ( 2 pages outline)
Re-consider including an organisational analysis of internal and external factors in order to work out the organisation’s key performance requirements. Remember, a firms overall strategy dictates the priorities of their performance management process.
Identify two key issues that span performance information, measurement, feedback, development and remuneration within the organisation with justification. Explain why these are the key issues to be addressed.
Your discussion of the issue should address validity, reliability, fairness and cost effectiveness and make an initial judgement about possible problems in the management of both performance and reward.
At all times link your analysis to the literature regarding what is best practice in performance and reward management.
- Provide recommendations to resolve the performance and reward issues identified in part 1 above. (2 pages outline, I will put in next page)
Overview the options for addressing each of the problems/issues raised, identifying strengths and weaknesses. Consider including the following:
- Implications of the Strategic Analysis in the selection of a ‘best fit’ option
- An outline of the implementation details of your chosen option;
- How to address issues of validity, reliability, fairness and cost effectiveness. At all times link your recommendations to the literature regarding what is best practice in performance and reward management.
This report requires students to link their analysis and recommendations to the performance management literature. Students are required to cite a minimum of 10academic references (the majority should be dates after 2007) from individually researched articles.
5.1.1 Reasonable Attempt
Students must attempt all quizzes and achieve a minimum of 15 out of 40 in this assessment item to be eligible to pass this course. Resubmission is available, with terms explained on the course website.
While the issues may be similar to those in the group report, it is essential that you work on the analysis and subsequent recommendations as an individual. Remember, your assessment will be analyzed using the text match software.
Part 1 Performance Management Presentation Outline
Performance Measurement
- Objectives and competencies are not job specific
- Lack of data gathering
- Performance standards are not clear and measurable
Employee involvement throughout performance measurement increases perceived measurement quality and perceived fairness (Groen, Wilderom and Wouters, 2015). Performance measurement objectives and competencies are standardised across city couriers, and are neither job specific or tied to the company’s objectives. Little to no data gathering is being undertaken therefore employee are only being measured on perceived performance, not actual performance. Recent performance events therefore will cause performance results to be perceived incorrectly or skewed. The absence of data gathering also detracts from the reliability of the performance management process as the accuracy of ratings cannot be determined. In order for performance measurement to be fair and reliable the performance standards must be clear (Speklé and Verbeeten, 2014) and easily measured equally by any assessor. However the performance standards in place are generalised and vague.
Feedback
- No job specific form = no specific feedback.
- Doing the appraisal once a year gives no opportunity to keep track of improvements in development.
- Bottom 10% is being let go, regardless of the feedback
The form is applied to all employees in non-managerial positions once a year. The set-up of the form doesn’t indicate that employees are regularly observed for good results throughout the year, but rather a quick and short form to fill out at once. The effects of the form are rather extensive, the top 20 percent of employees get the $5000 bonus and the bottom 10% are let go. Not only rewards enhances intrinsic motivation, positive feedback does this too, independent of rewards effects (Harackiewicz, 1979). A formal meeting or performance appraisal interview should conclude the appraisal process (Brown, Kulik & Lim, 2016). The way the feedback is communicated affects an employee’s interpretation and response to the feedback (Brown, Kulik & Lim, 2016). The appraisal meeting should include what an employee has done well and poorly, get feedback on it, discus changing behaviours, relate past achievements and or behaviours back to current results where possible, agree on an action plan to change and a follow up meeting to agree on the ksa’s and behaviours to be evaluated next.
Development
- “Buying” rather than “Building” staff mentality.
- In house Training and Development is a waste of time and money.
- Little time for managers who read management books, chase university degrees and agonise over the best practise people management.
Recruiting staff that possess the current experience and skills does save time and money in training but other costs are incurred throughout their career as employees always need to update their knowledge, skills and abilities to perform todays jobs and adjust to changes within the industry (Crumpton, 2011). Buying experienced and skilled staff does not make them more efficient or effective as organisations need to continually develop and train their staff to remain competitive (Salas, Tannenbaum, Kraiger, & Smith-Jentsch, 2012). In house Training and development allows for higher productivity, and efficiency whilst maintaining a competitive advantage by building support, and creating core competencies (Salas, Tannenbaum, Kraiger, & Smith-Jentsch, 2012). In house training should be viewed as an investment as it can be created specific to your staffing needs, strategy and goals (Crumpton, 2011). The Best Practise people management perspective places heavy emphasis on employee development through training. It discusses the many positive outcomes organisations receive including an increase in motivation, commitment and overall performance (Dysvik & Kuvaas, 2008) . This is due to employees feeling valued and increasing their investment in the company through contextual behaviours and effort levels (Dysvik & Kuvaas, 2008). These development issues within City Couriers are impacting the achievement of the organisations strategy, goals and objectives whilst maintaining and strong, competitive and skilful workforce.
Remuneration
- Utilising contingent pay the top 20% of employees getting a bonus of $5000.
- “Buying” instead of “training”, due to lack of revenue to cover costs.
- Only utilising tangible rewards.
City couriers are currently utilising a performance based remuneration system which is illustrated through the heavy use of contingent pay, which is when the top 20% of employees get a bonus of $5000. Although the use of contingent pay is dependent on the organisations strategic goals and objectives to create cohesion, however, it can be analysed that the use of contingent pay for City Couriers may not be the most effective remuneration system (Gomez-Meija & Balkin 1992 as quoted in Naji, 2014). Furthermore, the use of contingent pay is effecting the organisation which is seen through the bottom 10% performing employees being let go. This is due to their not being enough revenue to cover expenses. Training and development is not accessible in this organisation due to lack of funds. The remuneration should satisfy employees however, when looking at the turnover incurred it is seen that employees are not satisfied (Naji, 2014). Overall, when examining City Couriers current remuneration system it is seen that only tangible rewards are in place which is seen through the $5000 contingent reward. This form of reward is believed to not be beneficial in creating cohesiveness throughout the organisation (Butler & Charles, 1999).
References
Brown, M., Kulik, C. T., & Lim, V. (2016). Managerial tactics for communicating negative performance feedback. Personnel Review, 45(5), 969-987. http://dx.doi.org/10.1108/PR-10-2014-0242
Butler, S., & Charles, M. (1999). The tangible and intangible rewards of fostering for carers. Adoption & Fostering, 23(3), 48-58. doi:10.1177/030857599902300307
Crumpton, M. A. (2011). Making the case for in-house training. The Bottom Line: Managing Library Finances , 24(3). doi:10.1108/08880451111186008
Dysvik, A., & Kuvaas, B. (2008). The relationship between perceived training opportunities, work motivation and employee outcomes. International Journal of Training and Development, 12(3).
Groen, B. A. C., Wilderom, C. P. M., & Wouters, M. J. F. (2015). High job performance through Co‐Developing performance measures with employees. Human Resource Management, 56(1), 111-132. doi:10.1002/hrm.21762
Harackiewicz, J. M. (1979) The effects of reward contingency and performance feedback on intrinsic motivation. Journal of Personality and Social Psychology, 37(8). http://dx.doi.org/10.1037/0022-3514.37.8.1352
Salas, E., Tannenbaum, S. I., Kraiger, K., & Smith-Jentsch, K. A. (2012). The Science of Training and Development in Organizations: What Matters in Practice. Psychological Science in the Public Interest, 13(2). doi:10.1177/1529100612436661
Speklé, R. F., & Verbeeten, F. H. M. (2014). The use of performance measurement systems in the public sector: Effects on performance. Management Accounting Research, 25(2), 131-146. doi:10.1016/j.mar.2013.07.004
Naji, A. (2014). components of remuneration and employee satisfaction: The impact of effort rewards and career advancement. International Journal of Arts & Sciences, 7(2), 425
