Chapter 6 - Controlling Performance (part 2) Flashcards
How can an organisation influencing employees behaviour benefit the organisation?
Encouraging employees to adopt best practice
Motivation employees to improve productivity/quality
Preventing / detecting mistakes
Trying to limit theft or fraud
Encouraging employees to act ethically
Motivating managers to make right decisions
What control mechanisms can an organisation put in place?
Organisational structure
Target setting and budgeting
Direct supervision
Culture of the organisation
Self-control
Control systems
Specific control processes
Policies and guidelines
What are the four types of organisation control?
Personal centralised control
Bureaucratic control
Output control
Clan or Cultural control
What is Personal centralised control?
This approach is likely to be found in small owner-managed organisations where there is centralised decision-making by the owner.
What is Bureaucratic control?
Controls will be based on formalised rules, procedures, standardisation and hierarchy.
What is Output control?
This approach is a form of control that is based on the measurement of outputs and the results achieved.
What is clan or cultural control?
This form of control requires the development of employees’ strong identification with management goals, for example through professional identification and acceptance of the values and beliefs of the organisation.
What are the problems with formal control?
Motivation problems. Lack of morale; little worker commitment; no interchangeable skills (people were only trained to do one small part of the job); high staff turnover.
Motivation problems. Lack of morale; little worker commitment; no interchangeable skills (people were only trained to do one small part of the job); high staff turnover.
Little understanding of people. People at work are not necessarily rational, for example they do not always work harder simply to earn more money.
In order for control based on trust to work what number of factors must be in place?
The manager must be confident that the employee has the knowledge and the skills to undertake the task
The objective must be clear and agreed by both parties
The employees must be motivated to work hard and use initiative to achieve this objective
What is performance appraisal?
The regular and systematic review of performance and assessment of potential, with the aim of producing action programmes to develop both work and individuals.
What is the process of performance appraisal?
Target
Actual
Review
Action
What are the four approaches to performance appraisal?
The ranking system
The unstructured format
Self-rating
360 approach
What is the ranking system approach to performance appraisal?
This is a formal structured approach which consists of the individual being assessed and analysed in terms of objectives, tasks, workflows and results achieved. These are then compared with previously agreed statements of required results and performance levels
What is the unstructured format approach to performance appraisal?
The unstructured format is another common approach where evaluators use an essay or short answer to grade employees.
What is the self-rating approach to performance appraisal?
This approach is where the individual rates themselves on certain agreed criteria. This is then fed back to the manager who can review the individual’s assessment and make their own assessment.
What is the 360 approach to performance appraisal?
The 360 approach allows more participation by the individual. While the manager will appraise the individual, the individual is also given the opportunity to appraise the manager.
What are the benefits to individuals of a performance appraisal?
Provides feedback about performance
Identifies work of particular merit
Provides a basis for remuneration
An opportunity to discuss future prospects and ambitions
Identifies training and development needs
What are the benefits to an organisation of a performance appraisal?
A system for assessing competence of employees and identifies areas for improvement
Provides a fair process for reward decisions
Helps identify training needs
Improved communication between managers and subordinates
Provides clear targets linked to corporate objectives
Provides a basis for HR planning
What is a reward?
A reward is something given, to an individual or group, in recognition of their services, effort or achievements
What is an intrinsic reward?
These arise from the performance of the job itself. Intrinsic rewards include the feeling of satisfaction that comes from doing a job well, being allowed to make higher level decisions or being interested in your job.
What is an extrinsic reward?
These are separate from (or external to) the job itself and are dependent on the decisions of others (i.e. the workers have no control over these rewards). Pay, working conditions and benefits are all examples of extrinsic rewards.
What should rewards be?
Fair and consistent for all employees
Sufficient to attract and retain staff
Maintain and improve levels of employee performance
Reward progression and promotion
Comply with legislation and regulation (i.e. minimum wage laws)
Control salary costs
What are the six types of incentive schemes?
Performance related pay (PRP)
Piecework
Points system
Commission
Bonus Scheme
Profit Sharing
What is a performance related pay incentive scheme?
part of the payment received by the individuals relates to the performance of the company.
