Performance evaluation enables the human resource department to assess the effectiveness of its workforce. The Sheldon Freighters relies on management by objectives as the performance evaluation technique of choice. This technique has enabled line managers and employees at the organization to become more effective in their work.
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On the other hand, the technique also makes it hard for line managers to compare the performance of two or more employees. This essay has examined the benefits and challenges of this particular method of performance evaluation. The four phases of performance evaluation under management by objectives as practiced at Sheldon Freighters are also discussed in details. In conclusion, the essay gives recommendations on how to improve this technique with the help of an effective method of performance evaluation.
Performance evaluation is the process through which the human resource management of a company measures the effectiveness of their employees in various duties and responsibilities assigned to them. By doing performance evaluation, a company can determine the worthiness of employees and determine the appropriate compensation policy for them. There are various forms of performance evaluation that a company can adopt.
Management by Objectives
In this form of evaluation, managers of a company sit together with their staff and set specific objectives in agreement that they all desire to attain by the end of a given period. When this period is over, the employees and the manager sit and evaluate their performance for the period (Bohlander & Snell, 2009). In the event that the set goals are attained by the employees, they are then rewarded by their managers. This is the type of employee performance method used by Sheldon Freighters in achieving the strategic goals of the organization.
Advantages of using Management by Objectives Technique
The advantage of this type of method is that both employees and their managers are able to make out what is required of them. They are in agreement regarding performance indicators and the results expected at the end of the period. The management of the company further becomes highly effective as managers are actively involved in the planning processes with the employees. In this case, they are able to understand the challenges that the employees face, what they are able to deliver and what they cannot (Bennett, Lance & Woehr 2006).
Disadvantages of using Management by Objectives Technique
There is a tendency to develop an individual rather than a team spirit in their work. This is as a result of allowing employees to have their time with the management in order to be told what is expected of them in the absence of their fellow co-workers. By doing individual assessments, it is quite difficult for the management to evaluate their staff as a team because each employee has different objectives (Bennett, Lance & Woehr 2006).
How Management by Objective Works
At the beginning of every year, each manager meets their employees in order to discuss their objectives and the key performance indicators that will be evaluated at the end of the performance period. Normally, the process takes about an hour during which a manager and employees talk about what is expected of them in their job and how they are supposed to execute various duties that have been assigned to them. The behavior and competence of the employees are also discussed during that meeting.
In addition to the company’s goals and objectives, managers and the employees discuss the work plan laid out for them. Through this discussion, employees develop a sense of motivation because they are able to immediately understand what is expected of them. The discussion also helps the manager to perceive whether employees will be accountable for their actions or not.
The second part of the technique deals with the performance execution by the employees. Through this part, the manager is keen to ensure that employees are acting towards the fulfillment of the goals and deliverables that they have set. The manager keeps on checking the level of dedication and commitment shown by the employees towards meeting their objectives.
When the manager notices any form of deviation from the set objectives, they are obligated to provide coaching and constructive feedback on how to remain on track throughout the performance period. In this respect, the chances of success are high among the employees, who are constantly shown the right direction. It creates a good working environment because if an employee has any issue, they can easily air it out and the manager will provide its effective resolution.
In the middle of the year, the manager will occasionally call employees to sit and reflect on their performance. It is during this time that they deliberate on and discuss the progress of the employees towards the initially set plans, goals and company’s objectives. In the event that the employees have not shown any significant progress, change and improvement in their line of duty, the manager seeks to find out the underlying reasons. The manager also needs to know why they did not take the initiative to seek assistance.
The third stage of the management by objectives technique as practiced at Sheldon Freighters is when the manager assesses the employee. This is normally accomplished by conducting a formal performance appraisal for each employee. During this stage, the manager carries out an assessment of how well the employee has performed over the given period. Most of the assessment is done through filling evaluation forms that have been provided by the human resource department in the organization.
After the assessment has been completed, the human resource manager of the company can choose whether to increase the employee’s salary or not depending on their evaluation results. In most cases, when an employee has met or exceeded their targets, they are given a promotion that comes with a salary increment or a bonus payment following the recommendations of their human resource manager.
In the last phase of the technique, the manager meets the employee to discuss the objectives and targets for the next year. This is done with the strengths, weaknesses and opportunities of the particular employee in mind. These targets are also set in line with the company’s goals for that period.
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The employee obtains those duties that match their abilities and that are encouraged to meet their targets. The performance indicators derived during this stage will come in handy for determining whether an objective is met at the end of the performance period or not.
The performance evaluation technique used by the company serves the purpose. However, the goal of any performance measurement and assessment technique should be to bring all the employees of the company together to work towards a common goal.
Even though the approach used in this case is highly effective, it is important for the management to seek ways through which employees can be able to work together as a team. This can be done through encouraging objectives to be met with the help of team work and simultaneous division of labor. The benefit of doing this is that the management can understand the ability of an employee to work in team environment as well as to achieve goals within a short period of time by assigning more employees to a certain task.
Bennett, W., Lance, C., & Woehr, D. (2006). Performance measurement: current perspectives and future challenges. London: Lawrence Erlbaum Associates
Bohlander, G., & Snell, S. (2009). Managing Human Resources. Stamford, Massachusetts: Cengage Learning.