Performance Management Plan free essay sample

Mr. Stonefield, I am very happy to hear that you are considering a Performance Management Plan for your business expansion in Austin, Texas. As you may know there are sound organizational payoffs for implementing a strong performance management system. Study indicates that companies with a strong management plan is likely to outperform competitors by 51% on financial measure and by 41% on nonfinancial metrics. The performance management plan for the limousine operation with 25 employees, with a net $-50k revenue, with a growth of rate 5% for the first two years and expected rate of turnover of 10% should be straight forward. Here below I am presenting to you our recommendations for a very comprehensive performance management plan. (Cascio, 2013, P. 332) The first step a business must consider is alignment of performance management to the business strategy. Once you have the vision for the Limo operation in Austin, identify the drivers or Key Performance Indicators to achieve the vision. The KPIs then can cascaded down to the functional areas then to individual level. The next step in the process should be of defining goals. The process of goal setting should be a collaborative process between a manger and the employee. Once the company wide strategy is established the strategy and the goals should be shared with each employee. This is a critical step in the process. One thing to keep in mind in goal development is that the goals should be specific, measurable, achievable and timely. Specific: Well-defined to inform employees exactly what is expected, when, and how much. Measurable: Provide milestones to track progress and motivate employees toward achievement. Achievable: Success needs to be attainable with effort by an average employee, with a bit of a stretch. Relevant: The goals should focus on the greatest impact to the overall corporate strategy. Timely: A goal should be grounded within a time frame to create a sense of urgency for completion. I would like to spend some time now on how it can be done. The need to manage performance at every level is very critical. If done right performance management can act as a compass. The PM can indicate person’s actual direction as well as person’s desired direction. With the help of PM a manger can know where the person is now and to help focus attention and effort on the desired direction. Performance management requires willingness and a commitment to focus on improving performance at every level every day. In general, performance management requires that a company defines performance, facilitates performance and encourages performance well. (Cascio, 2013, P. 332) In defining performance, a manger must communicate what is expected of them and stay focused. The studies show that goals direct attention to the performance in question. The goals should not be vague which can lead to misinterpretation of expectations. If goals are measurable, the expectations are clear and there is no room for misinterpretation. The performance then must be assessed at a regular intervals. This approach of setting measurable goals and assessing will leave no doubt in employee’s minds as to what is expected of them, how they will be measured and where they stand at any given time. A manager must know and if not, must be educated to know that facilitating performance is a major part of their responsibilities. Managers can facilitate performance by removing road blocks, providing adequate resources and selecting the right people for the job which can help achieve maximum performance. The last area of performance management responsibility is to encourage positive performance. A manger can encourage performance by rewards that employee value in a timely and a fair manner. The manager must take the time to identify what do the employees value. If employees are rewarded with rewards which no one cares about, it can create a motivational issues and may impact the effort negatively. (Cascio, 2013, P. 332 335) Starting a new company requires the development of a plan to help the company succeed. The core of any business is its employees. Employees should have full awareness of their job descriptions and of all the duties entailed. â€Å"Job analysis identifies what is to be done. â€Å" (Cascio, 2013, p. 338). When job descriptions are clearly outlined, employees will not have any questions as to what their responsibilities are. The human resource department will have to make sure to get the job analysis in place and organize any training that will need to be implemented. There are many types of methods to analyze job performance, behavior oriented and results oriented. My recommendation for the limousine operation is to utilize methods from both categories. The critical incidents method interview method are behavior-oriented methods which focus directly on the employees’ behavior. The management by objectives method is a results-oriented system which focuses on the contribution of the employee to the success of the company. Stonfield Limo is a service based company. The success of the company relies on the quality of service provided by its employees. The critical incident method focuses directly on job behaviors and what behavior is considered effective or ineffective. Management would be required to write brief summaries of an employee’s performance based on their observations. Although time consuming, this would be a good method to log the successes of an employee’s relationship with clients or the complete opposite which would then allow both management and employee to work on a plan to improve this ineffective behavior during the interview method. The interview method is a more direct interaction between management and employee. It gives both parties a chance to voice their opinions of the job and to work on improvement. Management by Objective is a results-oriented system which focuses on the results of an employee’s job performance. For example, Stonefield Limo is a service based company whose business will grow ultimately based on the quality of service. If the same client calls and requests the same driver, then this would be a positive result that can be shared with the employee during the interview method. If service is not good and a complaint is lodged, then this would be a negative result that management would share with the employee during the interview method and then can create a plan. Performance standards translate job requirements into levels of acceptable or unacceptable employee behavior. It specifies how well work is to be done (Cascio, 2013, p. 334). Based on these standards, the methods referenced above measure the employee’s skills. Based on the outcome from the methods, an assessment is made by management addressing any improvements that can be made for the betterment of the employee, hence the company. During this process, a skills gap may be one of the outcomes. A skills gap is defined as â€Å"a significant gap between an organization’s skill needs and the current capabilities of its workforce. It’s the point at which the organization can no longer grow or remain competitive because they don’t have the right skills to help drive business results and support the organization’s strategies and goals. † (http://blog. eskill. com/identify-organizational-skills-gap) There are some signs that your organization is facing a skills gap. Perhaps one of the drivers does not have good social skills but is an excellent driver. Perhaps an office person is out sick and a driver needs to fill in between appointments, but the driver does not know how to use a computer. The first thing you’ll want to do is to test the employee’s skills when it comes to how well they perform their jobs. Skills testing can provide a good benchmark, so that you can see where your employees are before you get started. Then, you can test them again after training and development has been completed. This will also allow you to see which employees are able to learn more quickly. Secondly, you’ll want to invest in training and development. If you want to provide the best limousine service, a company should provide continuous training to support the initiatives. Invest in training classes suitable to the business such as public speaking or behavioral management or computer training. When a company invests in their employees, the employees feel a sense of self-worth and respect and want to perform their best for the company. Once you’ve provided training opportunities for your employees, you’ll want to create an environment that recognizes the accomplishments and rewards learning that support your organization’s overall strategic vision. When employees go above and beyond in their professional development, reward them. Their initiative and drive can pay company tremendous dividends. There are corporations that believe that if they train and hone employee skills, competition will go after your top talent. While there is some truth to it, the approach should be to develop top talent while creating great working conditions. When a company has both, it becomes difficult for competition to just acquire talent by just throwing money at employees. In the event if you think your company is suffering from some form of skills gap, follow these simple steps to help overcome it: use skills testing, train your employees, benchmark everything, provide continuous training opportunities, and, once all of that is accomplished, make sure to provide an environment that keeps top talent. To foster improved job performance as a result of performance feedback, companies should consider the following: activities that supervisors and managers must do before, during and after the interview. Before the interview supervisors should consider communicating the employee’s performance with them in more real time and as frequently as possible. If the supervisor does not have experience or not comfortable with performance interview, he or she should acquire training from human resource department. Also when interviewing the employee, use problem solving approach to addressing gaps as opposed to tell and sell approach. Furthermore, ask employees to come prepared to the interview with notes and records that they might have. During the interview, ensure that the employees know that a two way communication is encouraged. The supervisor should remember that the objective in this process is to judge the performance and not the employee. When providing feedback be specific and listen carefully to the comments from the employee. When setting goals for the future improvements ensure that the goals are mutually agreeable, timely and consider stretch goals for maximum performance. After the interview, the process starts all over again. Monitor performance and communicate performance. Periodically assess progress against the goals. Do not forget about the organizational rewards and ensure that they are contingent on performance. (Cascio, 2013, p. 359 362) An effective performance management plan is the key to developing an engaged workforce and it is usually the corner stone of a successful business. Without performance management plan organization could lose time, money, knowledge and at the end the competitive edge in the market place. A business can be successful for a short period of time in the market but will not survive without having a workforce that is engaged and aligned to company’s vision.