Human Resource Management Report: Lloyds Bank Performance Analysis

This report delves into the realm of Human Resource Management (HRM), specifically examining performance management strategies within Lloyds Bank. The report begins by introducing the significance of HRM in today's competitive business environment, emphasizing the need for organizations to attract and retain skilled employees. It then explores the concept of performance management, defining its role in aligning organizational goals with employee capabilities. The report analyzes the importance of performance management for Lloyds Bank, highlighting how it contributes to business success, employee motivation, and the provision of rewards. It outlines the steps involved in the performance management process, including goal setting, planning, ongoing monitoring, and feedback. The report also addresses potential biases in the performance management process, such as size of the bank, and the consequences of poorly structured procedures. Finally, it examines various factors that can influence performance measurement, such as service performance and the use of tools like the Balanced Scorecard (BSC). This detailed analysis provides valuable insights into optimizing HRM practices within a large commercial bank setting.

Human
Resource
Management

Table of Contents
INTRODUCTION......................................................................................................................4
TASK 1......................................................................................................................................4
QUESTION 1........................................................................................................................4
QUESTION 2........................................................................................................................9
TASK 2....................................................................................................................................18
Conclusion................................................................................................................................21
References................................................................................................................................22

Illustration Index
Illustration 1: Four indicators of commercial banks................................................................13

INTRODUCTION
Looking into the current business scenario of competitive global marketplace,
corporate bodies are continuously making their significant efforts to adapt changes according
to revolution in the business industry. Every organisation is keen to focus to attract large pool
of talented and high-skilled human resources, who can contribute to the success of an
enterprise. Thus, in accordance to the market needs and requirements and sustain in the
competitive market, it is necessary to adopt the HRM practices and theories in a significant
manner. The present report introduces and examine the different perspective of human
resource management within an organisation, along with the assessment of various processes
of employee development, resourcing, relations and rewards. For a while now, it has been
seen that performance management is becoming an augmentative bureaucratic process under
the provision of HR, which is why Lloyds Bank is taking sharp upturn to change their current
performance management along with reward system (John, 2012). To make this system in
line with the corporate strategy and culture, it is necessary to improve the employee
engagement system and focus on the numerous factors which can converge the performance
management of HRM within the workplace. In the present unit, emphasis is done on the
aspect of performance management and its contribution to the success of the Lloyds Bank
with the context of Lloyds Bank, which is a British commercial bank, along with a retailer
and considered as one of the 'Big 4' clearing banks. The report hereby, lay its concern over
several business issues, which have great impact on the formulation of HRM activities of the
Lloyds Bank. With the assistance of various HRM theories and methods, performance
management approach will be analysed in this module.
TASK 1
QUESTION 1
Performance management and its contribution to the organisational success
As per the provided case scenario, the HR director of large bank has analysed from
the annual performance appraisal interviews that there are many complaints arising regrading
performance appraisal systems within the workplace (Allen, Lee and Reiche, 2015). The
main reason found to be unfair judgements and assessment of employee's performance made
by line manager of the bank. Thus, it has become necessary to undergo with various factors
and issues that are pushing the aspect of performance management on the top priority of
every Lloyds Bank. Performance management can be defined as an effective process for
establishing an understanding of workforce' needs and demands and about what is to be

attained according to organisational purposes goals and objectives. In other words, it is a
distinctive procedure of alignment of organisational strategies and objectives with the skills,
competencies, requirements, development plans and agreed measures of employees within
the workplace. In the context of present scenario, it is the responsibility of the Lloyds bank to
bring improvements and developments in the performance management strategy (Importance
of Performance Management Process & Best Practices To Optimize Monitoring Performance
Work Reviews/Feedback and Goal Management. 2016). The Lloyds Bank should effectively
manage the performance of employees in the workplace, as it:
 contribute to the success of business by ensuring the alignment of efforts of
employees with specific organisational objectives;
 improve the motivation level of employees and enhance their performance by
providing them positive reviews and further opportunities for development and
training;
 avail a basis for linking rewards to employee's performance;
 provide more information about employees and their needs;
 Establish focus for the development and learning activities for employees to acquire
skills and knowledge;
 provide accessibility to clarify accountability related to performance and other
measures.
In accordance to the provided case scenario, the success of Lloyds bank is not just
dependent upon having right strategy and appropriate resources, it is also rely upon the
management skills of managers of the Lloyds Bank to support, direct and harness the groups
and individuals (Bloom and Michel, 2012). HR managers possess great role and
responsibilities to manage and arrange its human resources in an effective manner and get the
best results from the employees. Performance management process comprises of many steps,
which can be adopted by the Lloyds bank in its workplace in an effective manner. There are
many practices of reward systems can support the performance management system and also
impact on employee retention, job satisfaction and employee engagement level within the
Lloyds Bank. Some of these practices are mentioned below:
 By delivering feedbacks and reviews to individuals and groups
 Communicating and defining clear objectives and standards related to performance.

 Identifying the career paths for employees and providing them more responsibilities.
 By linking performance of employees with compensations and rewards.
 Providing learning and development opportunities to employees, so that they can
grow and prosper (Bloom and et. al., 2012).
 Identifying strengths and weaknesses, so that they can be availed with better
opportunities (Importance of Performance Management Process & Best Practices To
Optimize Monitoring Performance Work Reviews/Feedback and Goal Management.
2016).
Performance management process:
1. Set goals effectively: In performance management process the first step is set goal
effectively. In this step the two element are focused when developing goals. The goals
are written clearly and objectively and the goals are directly contributing to the
achievement of organization strategy( Certo, 2015). When organization setting goals
they not only address what is expected but also address how it will be achieved. The
job expectations and responsibilities should use as main guide when setting goals. The
objective of setting goals in organization to identify purpose of Lloyds company.
2. Begin with Performance Planning: This step is cooperative process between
employers and employees. In this step start with job description and analyse job
expectation then clarified expectation of job for each major area. In the performance
planning it is important to identify short term and long term objective of every job and
also understand that how they will be achieved. After identify goals analyse the
difficulties which would stand in the way of these goals being achieved. If any
difficulties then overcome through training, coaching and mentoring (Myers,2013. ).
The performance planning is design according company goals because it helps to
achieve objectives effectively and efficiently manner.
3. Ensure an Ongoing Process: Goal setting, performance planning, monitoring,
feedback, training is ongoing process which supports performance appraisal,
performance rewards and development. The ongoing process of performance
management helps to understand future goals and achieve individual objective or
Lloyds goals.

4. Improve Productivity Through Better Goal Management: Regular goal monitoring is
help to provide feedback, to make better performance plans and remove barriers
through proper goal management. Without a mechanism to regular monitor progress
against objectives , the ongoing process falls (Wickens and et. al., 2015). To better
goal management, the discussion of goal progress with all performance feedback
supports to understand goals and responsibilities and focus on future improvements.
The discussion should be delivered objective oriented and supportive. The process of
communication is open process to understand effectively employee problem and
understand that how employees motivate and how they improve their performance.
5. Gather Information From a Number of Sources: Gathering performance
information through various sources ensure that the factors are impacting on
performance or not (John, 2016). The information should be collect through sales
reports, deadline reports, feedback from others and personal observation. The
organizations used mostly 360 degree feedback methods to collect feedback from
everyone which is helpful to design future strategies and improve future performance
of employee and Lloyds bank.
6. Document: The organization records performance of every employee which is include
all negative and positive aspects of employee. Documentation of employees supports
when take decision of performance of individual. The purpose of documentation is
that they can record successes or performance which needs improvements.
Documentation is help to compare previous or current performance to understand
employee improvements. At the time of appraisal the documentation helps to
understand better individual performance. The records of employees will help to
assess employee performance and understand where employee needs improvement.
7. Adequately Prepare and Train Your Managers: Managing the another individual
performance is not an easy task and requires many skills. In the organization it is
ensure that the manager adequately trained or needed training to manage effectively
all the task related performance management.(people stream. 2013) This is especially
the case for new hired managers because they need to understand human behavior,
how to develop, how to motivate and how to deal with conflicts. The manager who
adequately prepared to provide and receive feedback and conduct a evaluation
performance meeting will be a major contribution in successfully functioning process
in Lloyds bank.

8. The review: The employee performance appraisal or review should be discussed in
organization. The review discussed upon job expectations, contribution and
evaluation methods (CHUANG and Liao, 2010). The review should be a written
conformation which is discussed already with employees. The review is should be
forward looking and target on future objectives. The review process in organization
are adopted frequently to better understand employee behaviour.
9. Link Performance Management With Rewards and Recognition: Organizations link
performance with rewards and recognition. Organization appraise employee
performance through no. of ways i. e formal recognition event, personal delivered
feedback and informal public recognition(Bloom, and et. al., 2012).This process
increasing performance and creates a sense of fairness. The rewards and recognition is
help to retain employee long-term in organization.
10. Evaluate and Encourage Full Participation and Success: The annual meeting does
not give effective benefits but the ongoing feedback and review is give effective
benefits to organization. Some organizations conducting performance review twice a
year or some are conducting frequently. The frequently performance review will be
give more benefits to Llyds bank. Its helps to creates atmosphere participative and
effective process of organization. The encouragement or evaluate by employers helps
to open communication with superior to clarify issues. This process helps to enhance
employee performance as well as organization(Chapron and et. al., 2014. ).
Consequences of poor structured procedure of performance management
There can be great consequences of poorly structured performance management
process. If employee's goals and objectives are not aligned with corporate strategies, then it
total waste of resources and time (Certo, 2015). Low employee engagement systems will tend
to lower down the performance of employees and also affect their morale within the
organisation. Moreover, inconsistent evaluation criteria may lead to mistrust, higher attrition
and lower productivity. However, it also necessary to differentiate the performance of top
employees with moderate performance level, with the help of many techniques and criteria.
They can be provided with various opportunities, performance ratings, compensations and
rewards according to their performance. Stakeholders can also get affected by lack of
documentation, accountability and visibility who are seeking to get more from the Lloyds
Bank. Furthermore, if its is difficult to access the performance information, then it will

become tough for the Lloyds Bank to determine the availability of training and development
programs in the workplace. There are other issues may also arise due to lack of proper
documentation.
QUESTION 2
Biases that can creep into the management process of performance
Earlier research and studies have found various points of performance measurements.
Some author have stated upon how well bank industry is performing and providing their
services to businesses and clients. Some others have evaluated the alignment of financial
performance and corporate environmental, in relation to analyse the contribution of
employee's performance in the success of the Lloyds Bank. However, it is also depicted by
Chapron. and et. al., 2014, that service performance should be considered as indicator of
performance management. Authors also suggest that the size of banks are main indicator or
performance measurement, such that large banks are performing better small banks, thus size
of banks are considered as an important factor in the measurement of performance of
employees. However, research have made and it is analysed that, many industries have
started using BSC (Balance scorecard) to evaluate the performance of employees, which is
considered as new trend for performance management procedures in banking industries.
After the financial crisis in 2008, banks are taking many effective steps to measure the
performance of employees in the workplace (Tulgan, 2010). Moreover, it is also necessary to
evaluate their capabilities and potentialities according to market change and economic
conditions. It has been seen that the new regulatory structures are highly affecting the
underlying economics of these businesses in terms of processing and payment card issuing.
The capital requirements is also increasing in banking industries (CHUANG and Liao, 2010).
Moreover, in the realm of modernisation and advancements in technology, the demand of
mobile phones are also increasing and becoming the important element. Revenue growth is
also affecting due to the weak economic conditions, regulatory instructions and low interest
rates. Lloyds Bank is efficiently trying to manage the costs, enhance product mix and deepen
the relationships with employees and customers (Colquitt and et. al., 2012). Moreover, in
order to overcome various organisational issues related to pay-scale and appraisal system, the
Lloyds Bank can adopt several methods to implement performance management system
within the workplace. Each organisations have different strengths and weaknesses to
implement this system, there is no single method is invented to measure the performance of
employees according to business needs and requirements. Dale, Cooper and Wilkinson, 2014

have classified appraisal method into absolute methods, relative methods and objective
methods, however, Florén, Rundquist and Fischer, 2016 have classified this system into
modern and traditional approach. Some of these methods are stated below, which can be
adopted the Lloyds Bank in its workplace accordingly:
 Ranking method: This method is considered as simplest form of appraisal method,
whereby employees are compared with each other according to their performance in
the workplace. Ranking method is traditional method, in which emphasis is given on
employee's traits, intelligence, leadership, creativity, leadership skills and many other
set of skills (Florén, Rundquist and Fischer, 2016). In ranking method employees are
scaled according to highest and lowest ranking, that id from best to worst. The
employee who is at lowest level, will be categorised under L and who is performing
best and at top level, will be indicated under category of H. So, this is an simplest
method, which can be used by Lloyd Bank in an effective way. However, there are
also some limitations of this methods, which need to be undertaken:
◦ It does not specify clearly that who is performing best and who is worst.
◦ If large number of employees will be there, it would become difficult to measure
and evaluate them with the help of this technique.
◦ Moreover, this techniques don't measure their behaviour, each employee has
different traits and attributes which need to be undertaken by employer in a
significant manner. 360 Degree Appraisal method: This is the modern approach, in which employees
are judged and evaluated on the grounds of their performance, job achievements and
evaluation of work rather than the personal traits in the workplace. This feedback
method is generally used for ascertaining the development and training requirements,
rather than for increment in pay scale (Griggs and et. al., 2013). According to this
technique, employees are judged and evaluated according to their skills, behaviours
and abilities, by knowing the view point of peers, colleagues, subordinates, team
leaders, supervisors, customers and clients (D. J). The Lloyds Bank has adopted this
technique, by interacting with employees and knowing their interests and behaviours.
In 360 degree feedback method, employees are being judged is likely to be more
realistic and correct. Unlike traditional method, this method can effectively used by
Lloyds Bank to evaluate the performance of employees within the workplace.

However, employees may also get negative feedback, which can highly influence
their review.
 Management By Objectives: MBO (Management by objectives) consists of the
traditional method to appraise the performance and for judgement. It says whether it is
superior or subordinates have common goals. This concept was given by Peter F.
Drucker. He also proposed that every individual has different types of responsibility
for getting the result expected from him. It measures the contribution of each member
to get the expected results. In MBO some steps are considered for completing the
objectives of organization are as follows
◦ Goal setting
◦ Standardized the performance
◦ Setting comparison
◦ Periodic review
1. Goal Setting: In MBO, the first step is to set the targets and goals which are to be
achieved by each person.
2. Standardize the performance: After the settlement of goals, the second step is to design
the standard for the employees like what is to be completed, what things are remaining, etc.
3. Setting comparison: After the standardized performance, third step is analysing the
standards with its targets and goals. This comprises of finding out whether it is according to
them or not. In other words, this step helps the Lloyds Bank in determining the difference
between actual and desired performance (Gruman and Saks, 2011).
4. Periodic review: In MBO, this final step assists organizations of banking industry to
check whether the goals and targets are achieved or not.
MBO helps Lloyds Bank to design the objectives and targets and link with them to
their standardized performance and pattern. It will help to be differentiate the actual and
desired level within the given time frame (Guest and et. al., 2012). MBO helps the banking
industry as it is not only for performance measurement while also for subordinates to plan,
organize and communicate activities in an appropriate manner. It also helps the managers to
control and debate.

 Behavioural Anchored Rating Scales (BARS): BARS is an effective method, which
combine all degrees of behaviour of employee according to specific performance. It
comprises of critical incidents, quantified ratings and narratives by anchoring the
scale with specific behavioural examples or good or bad performance (John, 2012)..
In the development of BARS, the following five steps will be involved:◦ Generation of critical Incidents: Critical incidents are essential for the evaluating
the performance of job. Employees who are aware of their job, will be asked to
describe the the critical reflection of effectiveness of ineffectiveness of their
performance (Jiang and et. al., 2012).◦ Development of performance dimensions: Then critical incidents are clustered into
the set of different dimensions of performance.◦ Reallocation of incidents: Allocation of critical incidents will be done according
to different groups, such that each cluster shows similar incidents (Kehoe and
Wright, 2013).◦ Scaling incidents: Then employee's behaviour will be described in each incident
according to the effectiveness and ineffectiveness of particular dimension. Then
those incidents will be allotted scores
◦ Development of BARS instrument: The subset of critical incidents usually consists
of 6 to 7 clusters, used as behavioural anchor for evaluating the performance.
The critical incidents comprises of several performance dimensions, such as
conscientiousness, knowledge and judgement, skills in human relations, skills in monetary
transactions, and observational abilities (Li and et. al 2013). BARS method is an effective
approach that can be used by banking industry in an effective manner. It is best method, in
which employee's are evaluated on the basis of clear standards, accurate gauge and
feedbacks.
 Balance Score card for Banks: In BSC, performance criteria are associated with
different groups according to multiple dimensions. It includes financial and non-
financial criteria in a balanced manner in the report. While measuring the
performance, balance weight has been given to all dimensions of performance criteria
in BSC (McDonnell, Scullion and Lavelle, 2013). The balanced score card usually
have four perspective, that are process; financial; customer and learning perspectives,
according to which performance of employees are evaluated ( John, 2012).