Paper Example on Managing Workforce: Investing in Human Resource Department

Introduction

Managing a workforce requires significant investment in the human resource department. Organizations with high numbers of workers often ensure that these employees are well catered for, allowed to join unions, and even given significant leave days and allowances. Motivating workers is the core function of the human resource department (Kuvaas, Buch, & Dysvik, 2016). In as much as recruitment processes often take into account the organization's capacity to absorb and grow the abilities among workers, the key factor in recruitment is often the competence of the employee (Ishizaka & Pereira, 2016). Employees who have proven in technical and other soft skills are often considered for promotion and managerial posts. It is thus common for organizations to require employees to sign performance-based contracts that determine their remuneration as well as termination. Although performance-based contracts are essentially good for the organization, they can significantly deter the employee's ability to focus on their work.

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Background on Performance Management Systems

A performance management system is a set of procedures that ensure the output from an employee can be gathered and evaluated (Buckingham & Goodall, 2015). These processes come with compensation promises, contractual agreements, and organizational protocols that the employee has to adhere to. Employees in different organizations around the world often face performance management systems, either knowingly or unknowingly. It is common for employees to follow certain rules in the workplace. These rules are meant to measure their performance, such as report writing, signing check-ins and check-outs as well as meeting strict reporting times (Schleicher et al., 2018). Organizations that have these subtle rules do not explain to the employees the repercussions of not meeting certain set silent targets. Employees should be aware of the need to adhere to procedures and ensure that they try as best as possible to follow their contractual requirements.

Performance contracts are the most common performance management tools used (Buckingham & Goodall, 2015). A performance contract is similar to the engagement contracts employees sign while being employed. It may be introduced during or while in employment. The contract states various minimal requirements that the employee must meet to either qualify for allowances and, even to some extent, to keep their jobs (Ishizaka & Pereira, 2016). Performance contracts that require employees to meet some basic requirements for the organization may have a termination clause detailing the circumstances that would lead to the nullification of the contract. When performance contracts are introduced in an organization, they often meet significant resistance from unions, and employees generally feel demotivated. Organizations must ensure that they explain to employees why they are introducing these contracts and also make it possible for the employees to discuss the terms democratically.

Benefits of Performance Management Systems

Performance management systems enable an organization to keep track of employee performance. It ensures that they are monitored without infringing on their rights. The documents signed in performance contracts are often agreed upon by labor movements. They are binding and often set limitations and requirements that can be met by the employees (Kuvaas et al., 2016). Companies need to ensure that they sign only the contractual requirements that can be beneficial to both the employee and the organization. When the systems in place are mutually beneficial, it becomes possible for the organization to motivate the employees while expecting hard work and determination from them (Schleicher et al., 2018). Performance contracts can be difficult to achieve, but often, many employees agree to them and meet the set requirements. It is eventually important for the company to have these contracts where the need to meet competitive market goals is imminent.

Often, performance contracts are set within the limit of minimum acceptable working terms. They do not set limits that are very high or that cannot be achieved by the average employee. Most organizations are aware of the fact that employees cannot offer what they are technically incapable of (Buckingham & Goodall, 2015). Indeed, the setting and determination of performance contracts are based on a professional consultation. These contracts are thus not only binding in a sense that they ought to be met, but they are also quite achievable. The setting of goals in an organization is often the factor behind the performance contracts. As such, employees who are aware of the organizational vision find it quite easy to adhere to the contractual limits (Smith & Bititci, 2017). Members of the organization need to be aware of the need to meet targets by working hard and becoming focused on their tasks. As the organization grows, so does the compensation offered to these employees increase.

Detriments of Performance Management Systems

Performance management systems make organizations set unnecessary targets to beat the competition. In many cases, performance management systems are designed as a knee-jerk reaction to failing organizational performance. It thus becomes important for organizations to seek the necessary intervention from employees by equating their wages to the throughput they offer (Smith & Bititci, 2017). Performance contracts that offer minimal wages can discourage employees from concentrating on their work and offering the quality required. It is essentially the case that most of the organizations with performance contracts also have a high turnover among the employees (Schleicher et al., 2018). This is because employees who surpass the targets consistently become more motivated to seek exposure elsewhere or find new challenges. Employees who do not meet these targets are often terminated and replaced (Buckingham & Goodall, 2015). In both instances, the organization loses the workforce a great deal.

Performance in an organization is the core value that determines other motivational slogans and principles. Whether it is integrity, honesty, or hard work, organizations that ensure performance achievement often succeed in the market. Nonetheless, the costs at which some organizations meet profit targets and other requirements set by the owners is quite high. Employees, for instance, may have to work overtime and during the weekends, take more shifts at minimum pay and even take shorter breaks and leave days in the year (Ishizaka & Pereira, 2016). Performance contracts often tie these employees down to a working environment that is both toxic and detrimental to their physical and psychological health. Before an employee commits to such an agreement, it is vital to consider whether or not they can cope with the requirements.

Conclusion

Performance management systems have both significant gains and disadvantages. Companies that know how to channel the positive aspects of performance management can easily get the best out of their employees. Nonetheless, companies that place stringent requirements on their employees risk the possibility of discouraging them and demotivating their efforts. Every company has to strike a balance between performance management contracts and employee motivation. Depending on the level of competence required for a particular role, a performance contract should be commensurate to the motivation of the employee. In as much as high silent targets may be placed on an individual, so should the compensation they receive for their efforts are significantly high. Employees should also be allowed to join labor unions that champion their rights. These unions enable them to understand the meaning of performance contracts and how best to work within favorable working conditions.

References

Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review, 93(4), 40-50. Retrieved from http://web.vdw.co.za/sara/file%20storage/Documents/2015/Reinventing%20Performance%20Management%20-%20HBR%20APR%2015.pdf

Ishizaka, A., & Pereira, V. E. (2016). Portraying an employee performance management system based on multi-criteria decision analysis and visual techniques. International Journal of Manpower, 37(4), 628-659. Retrieved from https://researchportal.port.ac.uk/portal/files/4082273/ISHIZAKA_2016_cright_IJM_Portraying_an_employee_performance_management_system_based_on_multicriteria.pdf

Kuvaas, B., Buch, R., & Dysvik, A. (2016). Performance management: Perceiving goals as invariable and implications for perceived job autonomy and work performance. Human Resource Management, 55(3), 401-412. Retrieved from https://biopen.bi.no/bi-xmlui/bitstream/handle/11250/2447382/Kuvaas.preformance2017.pdf?sequence=2&isAllowed=y

Schleicher, D. J., Baumann, H. M., Sullivan, D. W., Levy, P. E., Hargrove, D. C., & Barros-Rivera, B. A. (2018). Putting the System into Performance Management Systems: A Review and Agenda for Performance Management Research. Journal of Management, 44(6), 2209-2245. Retrieved from http://www.e.mahan.ac.ir/images/pagepic/schleicher2018.pdf

Smith, M., & Bititci, U. S. (2017). Interplay between Performance Measurement and Management, Employee Engagement, and Performance. International Journal of Operations & Production Management, 37(9), 1207-1228. Retrieved from https://strathprints.strath.ac.uk/59166/8/Smith_Bititci_IJOPM_Interplay_between_performance_measurement_and_management.pdf