Pulakos (2004) calls the Achilles heel of HRM. Not many companies in recent years have paid much attention to this particular human resource function. Although they have installed performance evaluation methods, these were poorly developed and caused difficulties for both managers and employees. The clamor for an effective performance management system has become increasingly important due to globalization, stiff competition, and other social and economic pressures (Williams, 2002). Performance management is the process by which managers, supervisors, and executives assess the performance of employees to ensure that it accords with ‘the company’s objectives. Armstrong (2006) defines it as “a systematic process for improving organizational performance by developing the performance of individuals and teams” (p. 618). It is the best way of managing and rewarding performance based on planned goals. Armstrong and Baron (2005) describe it as a ‘strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors” (p. 618). Performance management is effective if it does the following: 1. Identify excellent performance 2. Use appropriate appraisal techniques 3. Provide feedback to employees regarding their performance 4, Evaluate employees fairly Minimize biases 6. Exercises fairness T: Performance management system is what sBip tomer Aesource Management: Concepts and Practice RAISAL AND PERFORMANCE MANAGEMENT .s to performance managem, erformance appraisal is often synonymous ee perhormence coraisal is a formal annual assessment of employees by the, Femediate superiors. Periodic performances reviews are done routinely by managers. In contrast, perform: PERFORMANCE APP! ance management is a continuous and more rewarding employees, thus helping them hone their potential and improve organizational performance. ‘The performance management cycle below shows managing performance as a continuous process. ‘performance Management Gycle Figure 10 ~ Performance Management Cycle ‘Adapted from: Performance Managoment Cycle by Michael Armstrong, Performance Management: Key Strategies and Practical Guidelines, 2006, 1, Planning This pertains to the setting of performance goals and expectations of groups (departments or units) and individuals (subordinates and superiors). It ensures that all efforts work toward the achievement of company objectives. All employees are involved in the planning process so that they will understand what the company wants to achieve. It also explains the importance of managing effective performance and how such management is to be carried out. Planning covers the following areas which should be defined clearly and comprehensively as a first step for a successful performance management system: a. Roles ‘The manager (immediate superior) and the employee should discuss key result areas and define theitPerformance Management ana Employee Movement > tre neat. Thus dacusionengres shat both posse ssary avioral competencies an re values that each of them should upholds SM Me SOF b. Key result areas The employee at this point should think of the most cnbyrtant tasks that he/she has been assigned with and the ind of performance that is expected from him/her. He/She should also find out how others have performed the same tasks before. This examination should be discussed so that all the tasks (which may appear multiple or many) can be summarized or grouped into key result areas. ©. Technical competencies The employee should possess the essential knowledge and skills (e.g., procedural, problem-solving, planning, and communication) to be able to do his/her tasks well, @._ Behavioral competencies __ The manager or the immediate supervisor should discuss the behaviors/traits expected by the organization. ‘These traits include drive, teamwork, leadership, planning, communicative skills, ete. €. Objectives ‘The employee and the immediate superior should agree on the performance objectives (e.g., sales representatives should aim to minimize customer complaints and always maintain a high level of customer satisfaction). Objectives sho Id be quantifiable and measurable in terms of sales, income level, output, cost reduction, ete. Importantly, the employee and the immediate superior should agree on and integrate the performance objectives. Below is an example of an agreed-upon, integrated set of objectives. Ces Er es peices cr Adopted tom: Two-ey Process of Agreing on Integrated Objectives Be by Michael Armstrong, Performance Management: Key Statepes and Practical Guelines, 2006,ff Core Values of the Organization ‘The core values of the organization include intepris, loyalty, industry, and honesty. 2. Monitoring Monitoring provides the mechanisms by which performance wi be measured. It also entails giving constant feedback to employee regarding their progress in achieving the goals of the organization, Undoubtedly, planning is very important in the performance management cycle. More importantly, the articulation of performance Objectives sets the stage for a successful performance management gystem. However, these objectives can only be achieved if there are agreed upon and reliable performance measurements which can spell the difference between performance standards and actug| performance. Performance measures can be established in terms of output and outcome. What is quantifiable is an output whereas what can be visible but cannot be measured in quantifiable terms is called an outcome (Armstrong, 2006). Output metrics include costs, income, sales, speed of recovery or response, delivery time, etc. Outcome measures include completion of work, changes in behavior, judgment of customers, attainment of a standard level of service, etc. In monitoring performance, a performance plan using the agreements made during the planning stage is provided. A personal development plan is also accomplished so that the immediate superior can support the employee's improvement of knowledge and skills. This may include coaching, mentoring, job enlargement, or job enrichment activities. This also includes the process details which show how and when a certain kind of performance will be reviewed. 3. Reviewing Performance is reviewed from time to time and compared with the performance standards, goals, and expectations which were agreed upon during the planning stage. The act of reviewing performance should be a continuous process. Managers should always allot time to dialogue with their subordinates. During such sessions, the agreed upon objectives and development plans should be reviewed to give room for revisions if any are needed. Reviewing has the following objectives (Armstrong, 2006): a. Planning This is the opportunity to find out if there is a need to revise the performance agreement between the employee and the immediate superior.b. Motivation This encourages the employee to grow or take control of his/her performance. . Learning and development This is an opportunity to further develop the employee's knowledge and skills and to provide him/her with learning activities that maximize his/her potential. d. Communication This promotes two-way communication between the superior and the subordinate. Roles and performance expectations are clarified and a relationship between them is built on mutual trust is developed. 4, Acting This includes activities based on the performance review. It means giving an employee feedback on his/her accomplishment of organizational goals, Feedback is based on evidence which should be fair to the employee. It should describe what actually happened and should not be based on the mere judgment of the superior. Thus, it is not at all subjective. The manager should focus on the aspects of ‘employee performance that can still be improved. If there is a need for training—enhancing employee skills or acquiring new tasks and responsibilities—specific programs should be devised. Outstanding performances, on the other hand, are rewarded and recognized. ‘The three R's of performance management and employee movement are rewards, retention, and remuneration. REWARDS Rewards are tangible manifestations of a job well done ot a good deed. They are included in the scope of performance management because conducting performance appraisal involves acknowledging the employees’ contribution in the attainment of the firm's objectives. k ‘The outstanding performance of employees benefit the organization. Employees who perform outstandingly, as indicated in the performance | sppralsal, are rewarded by the organization in different ways. Under the performance management system, there are periodic performance assessments conducted using various tools and techniques, either individually or by group, Performance appraisal determines whether employees perform effectively and are on a par with the company’s expectations. It concretizes and measures Performance as an aspect of the performance management system. Formal Valuation as opposed to the informal one is highly preferred and recommended.eb sre rinr core a res servation. Over the years, performan, iply determining salary increase oy related decisions which dramatio. ‘ce (wwwcihabsarieddine.com) ‘mance appraisal: lation is done by mere obs vanded its role from sirny king of other employee~ formant An informal evalu: ‘appraisal has expé promotions to making. affect long-term organizational per' The following are the purposes of perfor: a. Needs assessment ; : ‘The results of performance evaluation provide relevant information about the specific training needs of employees. b Employee movement : ‘The appraisal helps management decide who will be promoteg aided by concrete evidence of meritorious performance. ¢. Basis for merit increase In addition, it also justifies merit increases, . Legal concerns If there are issues triggered by certain actions like termination of employment, the appraisal document serves as basis of such decision, Other questions about performance issues include rewards provision, layoff, and transfer. e. Development A series of performance appraisals monitors the growth of ‘employees. These periodic records can assist the career pathing and development of personnel. f Channel of communication This is a good source of enhancing discussions on performance issues between the employee and the immediate supervisor. It becomes fan avenue for ironing out differences and articulating certain career concerns or questions on performance ratings. 9. Source of motivation Performance evaluation is one of the best ways to keep employees motivated. Every performance appraisal period generates excitement on the part of the employees. It is one way of boosting their morale and encouraging them to make good impressions and give outstanding work performance. The following are the different performance appraisal techniques: 1, Individual Evaluation Methods 4, Graphic Rating Scale This is the most popular technique. Employees using a set of traits or characteristics such as punch’ quality of work, flexibility, cooperation, and the like. The table the next page is an example. are rated tuality,“Performance Management and Emioyes Nant et 6 ~ Graphic Rating Scale Tralts__| Outstanding | Good | Satisfactory Attitude eee - towards wor | Creativity m ‘This technique clearly defines the core traits needed for the job. It is very popular because it is very easy to use and makes comparisons between employees possible. The traits it identifies, however, are too general and raters may tend to underrate or overrate an employee. As a result, it may not accurately describe an employee. Forced Choice Technique This is a technique that branched out from the graphic rating scale. The HR develops a set of descriptive statements and the supervisors rate their subordinates based on how they behave on the job. The HR prepares the following statements and a rater ranks an employee, for example, using number 1 for the statement that best describes the employee and number 6 for the statement that least characterizes the latter. There will be no ties, when it comes to the scores. Here are some examples of descriptive statements: mingles well with co-employees understands directions quickly manages time well resourceful innovative controls his or her emotions The HR department gathers and adds the points in each category and formulates an effectiveness index to further categorize the employees. This method is inexpensive and fairly easy to use. Howey just like the graphic rating scale, the rater is eet ae from a number of statements that may or may not descril employee. In this case, the rater can become subjective.‘al Incident Technique ie ter or the immedic noidemticular technique, the re ae in this Partew ofall the critical ot relevant behaviors of sore int 'd to record these behaviors, eps A logbook is used t Teee the suber yor tad. logbovample, a technician has to be capable whether good or bad. Tr ossible mechanical failure that may intel é “nme see Fong rh te {aproduction output. The failure may ‘be detected a day before a i achine’s actual breakdown. ; ‘This technique is useful because it provides an actual picture of performance through the handling of a critical incident, orceby giving a clear, fair, concrete, and accurate evaluation, However, this particular technique become? tedious for the supervisor because continuous observatiin should be done for sae of his/her subordinates. Otherwise, it ‘would be very unfair cathe part of the subordinates who may have displayed ideal oi chatior that has gone unnoticed and unrecorded. Supervisors should accurately track positive and negative ‘work tchaviors using the eritical incident technique, Otherwise, Mort eta become meaningless since they are outrightly ignored or forgotten. d. Checklists and Weighted Checklists The HR provides a list of descriptive statements with corresponding weights. The rater checks the statements which Mould likely describe the employee. Otherwise, he/she leaves it blank. He/She can check as long as they apply to the traits of the employee concerned. Descriptive Statements Weights tactful in dealing with concerns of 8.0 fellow workers systematic in doing the job 75 submits reports on time 49 shows leadership in group activities 59 speaks clearly 57 shows initiative in meaningful projects 6.3 ‘The items above show the weigh i weighted checklists. aids Oe ocguustie mete The i specie checklists are simpler than the weighted checklists because re no weights. The supervisor just checks the statements that likely describe the employee. There a¥¢ ponding scores based on the number of checks. a Thi sechnlaue is not time-consuming and, therefore, ideal for log net, However, a checklist may not provide all tasks of an employee. There is also a tendency for theSe nme n Such cases, the evaluation ¢, Behaviorally Anchored Rating Scale Patricia C. Smith and Lo; fea e Smitl ‘ue M. Kendall developed the BAR: S ited in John M. . Ivancey mance dimensions with aoe, a ts in a scale it representative to provide accurate tenn prtciotmirs customers is an example of a performance dimension, ‘This method is advanta; : geous because i i aspect of a job in great detail. It rovides mane eae aly than the previous techniques mentioned, pen chan ‘The construction of BARS, however, i it is not a very popular evaluation techs consuming. statements of critical incident is too complicated. Thus, nique because it is time- ‘Cal eva la sda pro ‘eovided wih ware pocatinomafon nee Cab eps ob nse carer be pon Posie ne ent cy bomtactem nea om ‘Cale god ok hepa is eda per wpe ‘ore sr poo tan Figure 12 ~ Bohaviorally Anchored Rating Scale ff Bssay Evaluation In this technique, the rater discusses in narrative form all the levels of performance manifested by his/her subordinates. Advantageously, the rater can discuss what he/she feelsis relevant to an employee's performance without the use of statements to describe them. However, it is not advisable if the rater has many direct reports. It is time-consuming and helpful only tomanagers who have a flair for writing. One disadvantage of this technique is that there is no consistent and specific criterion by which to gauge performance. 2. Multiple Person Evaluation Methods @. Forced Distribution ar ‘The forced distribution technique allows a supervisor 0.4rcN0 his/her subordinates at his/her own discretion. For example, of 20 personnel, 20% or 4 personnel will receive OCA ratings, 40% or 8 personnel will get above averase, i boy A problem occurs if more than 20% of his/her sulPipe Resource Management: Concepts and Practice outstanding ratings, although they should only be ab This technique is very However, it is controversial the groups identified by the manage between, say, 20% and 40%. b. Ranking In this method, th ay outstanding ratings and he/she will stick to just 4. If none vitetanding ratings, he/she will just stick to 4 as outstanding jove average. ‘easy to use, So it is widely poputas, | because employees may not fit into st, There may be a thin line he supervisor rates all the employees from, first to last, A manager can easily make decisions such as who s fee of the month or who gets laid off. It also becomes em eyes to work better since they will know where they stand in comparison with the others. has 16 employees, it may be difficult for him/her to rate them as to who is first, second, third, and so quite tedious since it involves placing employees in a particular rank or position. . Paired Comparison Technique ‘The supervisor rates employees by pair. Suppose four ‘employees will be evaluated: Employees A, B, C, and D. The raters will be given six cards with the names of the employees in pair, motivates employees If the supervisor on and so forth. This procedure is cuiovden WW [ewrioveea 7% [Eupoveea Euptoree ENLOVEEC EMPLOYEE 0 EMPLOYEE C EMPLOYEE D_ Ww EMPLOYEE C EuptoveE ENPLOYEE ENPLOVEE O Figure 13 ~ Paired Comparison Techni The supervisor determines the most preferred employee based on his/her appearance in the pairings. Final rankings reveal the most preferred to the least preferred employee. To cite: {1) Employee ; 2) Employee B; (2) Employee C; and (4) Employer ‘The advantage of this method is that managers rank employees by pair so assessing them becomes simpler because it is done two at a time. The employee who has a mediocre performance when paired to an outstanding performer, nevertheless, may cause the outstanding employee to obtain a lower rating as opposed t0 when the latter is evaluated individually. d. Management by Objective (MBO) This technique allows an employee to set his/her own goals or objectives by himself/herself. For example, one objective is to increase the sales of AM Food’s vinegar to 500,000 bottles before the next evaluation period. On the next evaluation period, his/her immediate superior (¢.g., the sales director) has to findPeviormancs Management and Employee Movement offffo out if the objective is met. If the target i manager should staat the target isnot reached, the product ly the likely reasons for the failure. During the evaluation period, the director should meet the manager and discuss the ratings based on the achieved objectives. The director or department head should emphasize that the objectives should be realistic, challenging, and achievable under normal circumstances. This technique is ideal because it develops the work commitment of ratees as members of the team and, thus, motivate them to further excel in.performance. Moreover, it focuses on results that are relevant. However, itis too individual-focused and mainly based on the goals that have been achieved. The performance of an individual is not compared with the performance of other employees. Also, a goal is only set on a short-term basis, €. 360-degree Feedback As the term implies, immediate supervisors are not the only raters. Other people also evaluate the employees. For example, a purchasing manager is rated by the following: other department managers or peers, suppliers, subordinates and himself/herself. In the academe, college faculty members are evaluated by the following: the chairperson, peers or co-faculty within the department, students, and the faculty member himself/herself. This technique is said to be comprehensive and gives a full-blown evaluation of the employee or an assessment done in.a circular fashion. The advantage of this technique is that employees are provided with a clear picture on how others see them as performers. Thus, it gives a more accurate view of their performance. It also increases their awareness of their competencies, skills, and Knowledge because of the more valid and objective feedback they receive. However, one obvious disadvantage is that not all employees give honest feedback. There may be politics involved as people become subjective and provide feedback based on their personal biases against the people being evaluated. RETENTION Retention is the act of maintaining the employees in the organization. It entails earning their loyalty. One of the best ways to do this is to evaluate them fairly and objectively. There are certain errors committed by raters who are usually the employees’ immediate supervisors. 1. Halo Effect This usually happens when a rater uses one particular aspect of the employee's good traits. For example, the employee is always punctual and never absent. He/She is never late and reports at least one hour earlier than his/her official time. Based on this one factor, he/she also gets high ratings on the quality of his/her work, initiative,ftexibility, and relationship with peers, even though he/she doesnot really display a type of performance that merits Dig gs in these areas. 2. Ambiguous Evaluation Standards Ambiguity occurs if one rater’s erformance contradicts that of anothe geen coi ano 0 re maya give an above average rating as compared to the Jalter Sr ay give ee outstanding rating. Supervisors should be very carefll in rating Trigioyees and must Know the difference between an Suistantlog er cienre average performance because performance evaluation ralings aoe er the Lases for merit increase. The difference between a basic anlary increase of 5% for above average rating and a +10% for an outstanding performance evaluation means a lot to employees. 3. Stereotyping Effect fater's decision as to who will garner Stereotypes may influence the r a high ranking and who will earn a low one. For example, raters may wot like employees who belong to a certain religious denomination or those who come from a particular region or province. 4, Recency Effect If recent events prior to the actual evaluation period are easily remembered and given more weight than the accumulation of performance behaviors for the whole evaluation period, the raters commit the recency effect. Biases occur when these recent employee performances, whether positive or negative, are given more weight affecting the general rating even if the overall work performance is not really that favorable. 5. Primacy Effect ___ Raters may have first impressions of the employees that linger and influence the ratings they give during an evaluation. For these raters, first impressions last and become a dominant assessment criterion. . Central Tendency In statistics, there are measures of central tendency such as mean, median, and mode. The central tendency deals mostly with the mean or average, The rater avoids putting high and low ratings (e.g. a scale of oS, where Sis the highest and 1 is the lowest, and the rater remains neutral and puts 3 instead). This error diminishes the opportunity for subordinates to get the ratings they deserve. Hard/Easy to Please Tendencies There are raters who are hard to please and feel that employees coat ea ‘expectations in terms of performance. They set their own high standards that are not only diff also beyond the standards set by the firm, Seer On the other hand, many , Many employees get outstanding ratins® because some raters lower their standards for outstandingperformance Again, these raters fail to comply with the standards set by the firm standard for outstanding work rater from a different5, Mirror Effect " “This error happens when a raters : TS get affected o ber, immediately preceding performance asseccree in tuenced by his/ For example, a rater gives an outstanding performac on employee. employee: Then, the next employee who seems to havent? Mormance, may be Fleas por inatend tage a8 erage in the rater’s “mirror” is still the outstanding performace uted employee they previously evaluated. Performance of the To eliminate this error, it is su, elimin : gested that , cacao ssl th companies pre practice fair and effective ways of rating. They should alware renee that whatever ratings they provide will affect the employees meralo and chances for merit increase, promotion, ca ice al : , career develo ‘Gaining: levelopment, and There is a need for all managers and supervisors who conduct performance appraisal to be trained in the following aspects (www. appraisals.naukrihub.com/pa-training html}: : a. methods, techniques, and guidelines for setting goals and objectives ways of evaluating the performance of the employees documentation of performance standards {filling out a performance appraisal form prevention of performance evaluation errors questions on appraisal techniques how to answer employee questions and queries improvement of rapport and communication i uplifting employee morale and motivation how to observe employee performance how to deal with employee resistance to performance evaluation L_ tracking results m. providing constructive feedback n. post-review actions Training can be done through special workshops conducted by professional HR consultants or other experts in the field of HRM. Sessions can be held in seminar halls, training rooms, conference halls, boardrooms, or some other venues far away from the workplace. -FEQR RES rs. REMUN E ee alent to the value of the tasks ‘emuneration ret yayments equive Sr ee eye, nemaneratin is equated with emplaye® hignt®At or how performance evaluation transforms 0% eer er, lower, or at same level by either promoting or demotiN® (or ng him/her at the same level, It may also mean quitting oF resi Teanization,Pipieseresretiennnccommemsracie ‘There are four main types of employee movement, nay 1 ely: refers to an employee's movement to a higher level op Peniority or through merit based on performance. Seniority refer, ne’s length of service in an organization. Merit is one's value in terms of performance. Under a straight seniority system, the only factor considered in promotion is seniority. In the straight Seniority system, all employees have the chance to get promoted if they have worked with the organization long enough. There is no conflict or competition mong the employees because the basis for promotion is very clear to them, Employees are not pressured at work since what they are building is loyalty to the organization. The disadvantage is that not al) employees want this kind of system to be the basis of moving up the career ladder. Some employees like to be challenged on the job and the or ‘ous employees are not willing to wait for their turn to get a seat this se ne reason for the high turnover of highly skiled personnel. Employees are not motivated to work harder because they are not challenged to perform better on the job. Promotion by merit uses qualifications and performance as the basis for promotion. This is ideal because good performance is rewarded. Employees are also encouraged and motivated to perform well because of promotion opportunities. Performance management is fostered because employees work their way up the career ladder and the organization promotes managing performance through the use of the set performance standards. However, it is quite difficult to gauge merit on the basis of qualifications and performance. There is too much politics as well as conflicts associated with it. Employees tend to figure in conflicts, and personal issues arise due to promotion. ‘There are questions about how people are selected for promotion. Promotion on the basis of a combined seniority and merit produces mixed reactions because of the relative ways or variations in applying this system. There are promotions where seniority has a higher percentage than merit, (¢.g., 60% seniority and 40% merit) or vice versa. Demotion refers to an employee’s movement to a lower level of position. There are instances when an employee is demoted because of inefficiency or poor performance. Instead of being terminated, an employee is still given the chance to work in the firm, but in a lower position. Here are the steps on how to demote an employee without triggering conflicts and issues of unfair treatment: @. Identify the reasons for demoting an employee The decision to demote an employee is really difficult to make. It is important for a manager to provide the mai? reasons for doing so. In essence, it should really be due to the employee's inability to meet the performance standards sé by the company.a Performance Management and Employee Movement dy >. Communicate the decision to the empioyee ] at noe to discuss the reasons for the demotion see Thats should be documents that support the decision, He/She nett Should exercise tact in disclosing the ‘ould discuss it in a professional manner. ©. Make a follow-up after demotion qT nage! after n @manager must observe the employee's reaction He/She ceinotion caused by a job performance evaluation Re/si ie cia also observe how other employees react to the Have a contingency plan A demoted employee may feel demoralized and opt to leave the company instead. The manager should be prepared when this happens. 3. Transfer is an employee's movement to another position but within the same rank or responsibility. It is a part of job rotation. For example, an administrative assistant may be transferred to the same post, but this time in the purchasing department. Transfer may also mean relocation to another branch if the company has many branches nationwide. Banks usually move their employees (¢g,, tellers and managers) from ager one branch to another. ‘There are four types of employee transfers (www.corehrwordpress. ‘com/2012/05/03/employee-transfer-2/}: a. Production transfer ‘This occurs when there is a shortage of employees in one department and a surplus in another. Employees who are found to be excesses in the latter department will have to be transferred to the department where there is a shortage. b. Replacement transfer ‘This is replacing or relieving an old employee from a heavy workload. c. Remedial transfer ‘This is to rectify a faulty selection in recruitment or placement d. Versatility transfer This provides the opportunity for an employee to increase his/her skills by transferring him/her from one department ty 4nother through job rotation. In most instances, this practice prepares the individual for promotion. i ’s mover leave-taking (departure) 4, Separation is an employee's movement or u from the organization. It has four sub-types: (a) termination with just ceive’) termination with authorized cause or layoff, (e resignation, and (d) retirement.ep Ree asi come a Prt a. Termination with just cause is due to the employee's Tau. it Is the company’s decision to terminate the employee bene G a just coer a ey escee guch as malversation of funds, theft, and fraud, In ancther instance, termination with just esti = & Sesult of an employee's failure to undergo the Probar une Period .eans not mecting the succesfully. Unsatisfactory performance tamaards oftie company: ‘Therefore, the services of an employee nett or he/she is not “regularized? under probation are terminal ee ten called layoff. It is the b. Termination with authorized cause is of aemay’s decision to lay off employees on any of the following ompany's dericiew technology has been introduced ond there ere positions which have been evaluated as redundant. These obs only duplicate the functions of the newly-installed technology, Second, a department or division will be closed permanently ae on saving measure. The tasks of the office wil) be taken oe epee ather department. Third, the company will merge with Ore ey ampany. Mergers usvally result in two similar jobs or position. If there are two accountants, oné has to be retained and positther has to be laid off. Layoffs usually entail fair separation packages so that the employees affected may start anew in Phatever way possible. A severance package helps an employee wnpare for temporary or permanent unemployment. It varies prepeompany to company and from one employee to another. A severance package may include the following: = The employee's remaining regular pay ‘Additional salary based on remaining months of service = Payment for unused sick leave = Insurance = Retirement benefits A company, on the other hand, may consider the following to determine how much to offer as severance pay: = Current salary of the employee = Length of service = Current position = Performance (for most recent years) c. Resignation is an employce’s voluntary decision to leave the company. The reasons for resignation are varied. Some employees transfer to other companies to obtain higher salaries and benefits. Others consider resignation a career move and a chance to look for more challenging jobs and positions that maximize theit skills and potential. A few opt to start and manage their own business while a number leave the country to work abroad. One of the pressing problems of companies is employee retention. It is the process by which management encourages employees to remain with the company. One particular issue under employee retention is how an organization can prevent employees from leaving.Employees usually resign to lo 10k for ‘oday, because mobility has been made Ot better opportunities, otsonnel are able to hop from one company ry ey skilled Poatively uncomplicated for many highly iny to another. It is, skilled personnel to relsfer from one company to another. Th Smployees and, therefore, are easily Sie So not treat them fairly. They are also aware that other companicn dond accept them immediately once they decide to apply Fis Catpang shoul adaveas Cita weer ed employee's resignation: at lead to an Compensation. Employees who have high self-worth and know their bankability always have high expectati regarding the total compensation package. Compensation issues should be discussed before an employee is offered a particular job. Employees who initially have high hopes may end up leaving the company if the latter does not keep its promise of better salaries and benefits. Work Relationships. Aside from compensation, some employees resign because of broken or uneasy relationships either with his/her immediate superior or with co-workers in the same area or department. Good Telationships affect employee motivation. Employees fare more enthusiastic to work in a positive, conducive environment. Some employees are greatly affected by how their co-workers support or relate with them. Some workers are also uncomfortable with superiors whom they perceive to be unapproachable or unsupportive, Major Changes in the Organisation. Tenure has becont ‘unpredictable in some industries. Mergers, acquisitions, lunprelosures have adversely affected employees. Thess iho were left after massive layoffs think of leaving well hesause they felt insecure and anxious of getting laid off in the future. People who remain after amass layoff face uncertainties. Organizational Culture. Employer’ leave upon sree rering that the company culture docs not jibe with their personal values. Another aspect ‘of organizational anctiite is the way it shows appreciation for a job wel Gone. In other instances, there art employees who are Giemayed at the top management because it if 3 supportive of highly effective ‘and worthy, but qui Projects. companies Career Development POgTEM TT ro ro iat GRIGG not pursue career Ser Fra incapable their employees: People wither, foes nay ass of imagining the possible oP positions ney i ae ighly later on in their careers ‘may opt to resign eany. Lee cr eaiployees ao noe remain in the sameBe Hino srt cones a Prt position or level during their entire tenure in a com Ifthere are no career opportunities in their own com, they may seek them somewhere else. irement. It is the end of an employee's career in a com, It signals a new beginning for retirees and the opportunity fa. them todo other things. An employee retires from an organization either satisfied or dissatisfied depending on how he/she looks at his/her entire work experience. = Early retirement. It is availed of by employees who haye health-related issues. Due to poor health, a company may decide to terminate an employee even before his/hey actual retirement age. If it is deemed necessary for the ‘employee to leave the company permanently to rest and recover from an ailment, then this is also considered retirement iy ‘pany, Other issues related to retirement are also discussed in the chapter on career management. PERFORMANCE MANAGEMENT As an HR manager, you like to develop a pay-for-performance plan, To realize this, there should be a good performance appraisal. Rank the following activities based on priority: 1. Train the supervisors in conducting performance evaluation, 2. Make sure all the managers and supervisors understand the performance management system. 3. Develop a new performance appraisal form. 4. Know and understand the things to consider in the performance management cycle. PERFORMANCE MANAGEMENT Nowadays, the performance of employees is managed well according to @ company’s corporate culture. The current trend is to build a high-performance culture where employees strive to align their performance with the company’s mission and vision. Because of globalization, comy jobs excellently, times. panies should encourage employees to do their use their skills, and maintain a high-performance level at all