Effectiveness of Individual Pay Related System in Performance Management

EXECUTIVE SUMMARY
Performance management is the technique through which capability, efficacy and potential
of employees can be found out. Several techniques and methods can be taken into account to
measure the potential of employees and all such methods should be justified for the situation. In the
present research study, researcher has discussed the effectiveness of Individual Pay Related System
on the basis of a case approach. Further, researcher has also discussed several ways through which
rewards can be delivered to the employees as per the performance level. Rewards are the best forms
of delivering monetary benefits to the workforce; hence in the present case, both the forms of
rewards have been discussed.
Moreover, researcher has discussed need of other management tools in supporting reward
strategies. Rewards as well as non-monetary both the sources seems to be imperative for the
management for subsequent hotel because that works in retaining skilled employees for future
business. Poor performance of the hotel is directly linked to performance management aspects
because employee give the best efforts when they are provided with different benefits from the
management. At the same time, it is also essential for the employer to integrate organizational plans
with employee roles and responsibilities so that overall aims and objectives can be acquired.

Table of Contents
Coursework 1 Reward Management Report........................................................................................3
Introduction..........................................................................................................................................3
Advantages and disadvantage of individual performance related pay as a performance
management tool in the hotel sector................................................................................................3
Role of IPRP in improving organizational performance.................................................................4
How suitable is IPRP to the business environment of the Cavendish Hall Hotel............................4
Barriers to the effective design and implementing of IPRP schemes..............................................5
Reward approaches which could be used to complement, or replace IPRP and why these may
work more effectively......................................................................................................................6
Coursework 2 Appraisal management report.......................................................................................9
Importance of goal setting and including feedback in the performance appraisal system .............9
Development plans and support.......................................................................................................9
Methods to manage poor performance at Cavendish Hall hotel....................................................10
How to develop hotel's performance with other management tools..............................................12
Conclusion..........................................................................................................................................13

COURSEWORK 1 REWARD MANAGEMENT REPORT
INTRODUCTION
Performance management is the concept which helps the business entities to evaluate the
efficacy of employee capability with the help of several measures and standards (Waal and Coevert,
2007). Thus, for such purpose, the present study has been made on Cavendish Hall Hotel which
provides wide range of services and is also popular for wedding purposes. In such context,
effectiveness of performance related pay and the possible barriers in implementing the same has
been discussed in the present study. Furthermore, several reward management strategies are also
stated through which organizational performance can be improved. Furthermore, in next section of
the research, researcher has stated the importance and effectiveness of objective setting, strategic
alignment and feedback. In order to enhance capability of the employees, the hotel has to undertake
several methods to manage poor performance.
Advantages and disadvantage of individual performance related pay as a performance management
tool in the hotel sector
What positive things IPRP system can bring to the hotel (Advantages)
In the present case, Cavendish Hall hotel can derive several benefits from the system which
are mentioned in the below section:
 Transparency management: Transparency can be managed in the business processes due to
focus on individual performance aspects. Each and every employee can get the idea
regarding their contribution in success and prosperity facets.
 Employee issues can be reduced: Issues related to employee misconception can be avoided
at the same time because IPRP system can assist Cavendish Hall hotel to specify things in
adequate manner.
 Clear structure for salary and incentive: Performance related pay is a way of managing pay
by linking salary progression to an assessment of individual performance and this is usually
conducted on the basis of pre-defined aims and objectives.
Disadvantages of IPRP system Extra cost of the system: To execute the system, Cavendish Hall Hotel has to invest
resources in the strategy execution process and allocating resources in such activity could
hamper budgetary aspects of the hotel. It weakens team work: IPRP system emphasizes on individual performance management
and it does not consider team management. Thus, the capability of the person can be
restricted to individual performance and he will not be able to contribute in team
management.
 Lack of team participation: Lack of team participation affects the overall sustainability of

the hotel and this may arise due to implementation of IPRP system.
Role of IPRP in improving organizational performance
Benefits of IPRP system to business performance
Better communication can be facilitated through implementing IPRP system at Cavendish
Hall hotel as employees will be able to determine the ways through which performance capability
can be encouraged. IPRP system is also beneficial in terms of managing clarity and transparency in
the business processes. If there is a link to pay, the increase or budget bonus will be spent on fair
basis for the purpose of motivating the employees in adequate manner. Proper performance
management system can assist Cavendish Hall hotel to increase the return or yield ratio and the
content of appraisals will help in managing manpower planning. Employees can also develop
adequate culture at the hotel where is yet another criteria for motivating the workforce.
How suitable is IPRP to the business environment of the Cavendish Hall Hotel.
Business environment is the combination of several internal and external factors that affects
business practices in affirmative and perverse manner. Through IPRP, employees will be able to
evaluate their performance level and they can also implement necessary changes in the performance
capabilities (Performance management system and employee’s job commitment, 2013). The major
aspect concerned with business environment is organizational culture which can be developed in
adequate manner only with employee support and collaboration. The process is beneficial for the
employees since through that, they will be able to produce optimum results for the hotel. The
process is highly suitable in terms of developing positive environment at workplace and as a result,
all the employees are able to produce better results in organizational practices (Rao, 2004).
Employee capability can also be encouraged with the help of proper performance
management system and through this, they can be rewarded with several monetary and non-
monetary benefits. Pay for performance has become a widely utilized means of improving
productivity and decreasing costs in the hospitality sector (Pulakos, 2009). Considering, traditional
way of performance management, it can be said that piecework is the oldest form of pay for
performance where in workers are paid for the number of finished products that they turn out during
a defined pay period. Execution of such system at Cavendish Hall hotel could include disincentives
as well. Thus, accordingly employees should be rewarded on the basis of work done by with within
a certain period of time (Miner, 2012). On the other hand, the theoretical arguments relating to IPRP
are not adequately supported by empirical evidence, whilst the practical research studies that have
been undertaken concludes that the entire success will dependent on employers and HR
practitioners of the hotel.
IPRP system would be beneficial for the hotel in a few areas; however due to diversified
departments, the system may not work as per the expected way. In the contemporary scenario, it is

difficult to manage motivation of all the employees; thus there should be clear and specific
dimensions determined for employee performance management. IPRP system would focus only on
individual's personal achievement; however the efficacy and competency of the workforce in a team
can not be ascertained with the subsequent IPRP system. Along with IPRP system, Cavendish Hall
hotel could think upon Reward system as that measures overall criteria from employee
performance. In modern business scenario, hotels and organizations have been emphasizing on
reward strategies and aspects because individual rewards are entirely concerned with organizational
performance and competency.
Barriers to the effective design and implementing of IPRP schemes
While executing the process (IPRP), Cavendish Hall hotel might face several issues from
other employees because of the criteria and parameters designed. Employee advice should be
included in organizational processes so that effectiveness ratio can be augmented. The parameters
defined for the process should be based on employee performance aspect (Marques, 2007).
Difference in opinion can hamper the decision making process related IPRP and this can also affect
the parameters defined for the concept. Cavendish Hall Hotel may face barriers due to these
specified reasons which are stated in the below section:
 Implementation of such process requires close monitoring where in employers have to
observe performance ability and effectiveness of employees by measuring with different
criteria and standards. Thus, employees working on senior level may refuse to adopt the
criteria because they have appropriate knowledge for managing their work (Latham, 2007).
 The process is considered time consuming and expensive because it involves measuring
employee performance on different grounds. Therefore, employer has to measure the
performance on the basis of selected criteria and since it is about every individual; therefore
it will definitely consume much time.
 Furthermore, issues may arise at the time of determining or setting benchmarks for IPRP
system. While deciding the benchmarks, several things should be taken into account; thus
this may create misconception among the managers (Fleetwood and Hesketh, 2010).
 Non availability of ample amount of organizational resources could also affect
implementation of the process and this may also influence hotel's productivity.
 Employee resistance is one such barrier that affects implementation process because
sometimes the criteria are determined on organizational basis irrespective of employee
preference.
Several other barriers that are appearing in the execution process of IPRP are stated in the
below mentioned section:
 Team structure of the hotel: Team structure of the hotel is considered as a barrier to the