Report on Performance Management Strategies at Cavendish Hall Hotel

This report provides a comprehensive analysis of performance management strategies, specifically focusing on the implementation and effectiveness of Individual Performance Related Pay (IPRP) within Cavendish Hall Hotel. The report begins with a critical evaluation of IPRP, outlining its advantages such as skill retention, standardization of employee performance, and clear target setting, while also addressing its disadvantages including complexity reduction, potential for hostile work environments, and subjectivity in performance evaluation. It then delves into the barriers encountered during the implementation of the IPRP scheme, such as the difficulty in designing equitable criteria, linking rewards to performance, and motivating staff. Furthermore, the report explores alternative reward approaches to complement or replace IPRP. The report also examines the role of appraisal as a performance management tool, its links to development plans, methods for managing poor performance, and integration with other management tools, providing a holistic view of performance management practices. This report aims to evaluate and improve the employee performance and overall organizational effectiveness within the hotel.

DEVELOPMENT AND
MANAGEMENT
PERFORMANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Critical evaluation on individual performance related pay (IPRP)........................................3
Barriers to effective implementation of IPRP scheme...........................................................6
TASK 2............................................................................................................................................9
Appraisal as a performance management tool........................................................................9
Links to appropriate development plans and support...........................................................11
Links to appropriate methods to manage poor performance................................................12
Linking appraisal discussion with other management tools and techniques........................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
APPENDIX....................................................................................................................................18
Document 1: Appraisal Preparation....................................................................................18
Document 2: Feedback Sheet..............................................................................................20
Document 3: Appraisal Form..............................................................................................22

INTRODUCTION
Every business strives to serve the best products or services to their customers.
Businesses need to be cautiously managed and monitored to ensure success from the investment
put forth into the business. Putting performance measurement in place can help the organization
in keeping a track of progress which they have made (Hervani, Helms and Sarkis, 2005). It
provides vital information on employee’s productivity and instills motivation in them to serve
the best for company.
The study has been carried on Cavendish Hall Hotel which is being managed by the
recently appointed Daphne Jones as a personnel manager of hotel. Herein, this report is a critical
evaluation of performance management with the detailed discussion on its in-depth values
towards the organization. The report is divided into two segments whereby, the first evaluates the
contribution of reward principles, policies, practices and decision-making to the performance
management. The next segment of report analyzes the designs, implementation and impact of
high performance on organizations.
TASK 1
Critical evaluation on individual performance related pay (IPRP)
Individual performance related pay is a pay that varies as per its respective performances.
It is a financial rewarding system for employees where some or all are provided with monetary
compensation according to the performance assessment relative criteria.
It can be seen that in every service sector, it is important for management to analyze and
determine the performance objectives of individuals (Leopold, Harris and Watson, 2005).
Further, businesses catalyze their performance objective to achieve the desired results. IPRP
involve various wages, bonuses and grades which are passed on the workers to analyze their
performance in reference to these rewards for a particular time period. PRP is a method by which
salary increments are provided and motivation is boosted among them to carry out the identified
objectives.
Daphne Jones has introduced the individual performance related pay scheme to review
and boost the performance of employees of Cavendish Hall Hotel. It has introduced a standard-
based system for rating of employees and for setting rewards as per their ratings.
The rating criteria is as follows-

Ratings Fixed Increment as
cost of living
Additional Increment Total Increment
Excellent 1.00% 3.00% 4.00%
Good 1.00% 2.00% 3.00%
Satisfactory 1.00% 1.00% 2.00%
Unsatisfactory 1.00% 0 1.00%
Despite of effective scheme introduced by the hotel manager, it has been seen that the
rewards have not positively contributed towards the performance of employees. There are
serious concerns faced by the hotel regarding its customer services and room cleanliness on the
site of Trip Advisor UK. Apart from these reviews, hotel has been suffering with the declining
room occupancy rates which are putting a negative impression of the hotel from the head office
(Zellmer-Bruhnand Gibson, 2006). As per the opinion and staff reviews, it can be assessed that
the method needs to re-examine to identify its pros and cons towards the organization.
The key advantages of individual performance related pay (IPRP) are-1. Retention of skills- PRP helps in attracting and retaining their skilled workforce by
recognizing their accomplishments and rewarding an effective pay system to employees.
With the development in pay system, individuals can feel their recognition and
importance towards the organization.2. Standardization of employee performance- Managers are required to review the
employee's performance and set standard criteria for effective accomplishment of their
desired goals. Cavendish Hall Hotel has also subsequently set criteria which are
bifurcated into excellent, good, satisfactory and unsatisfactory. The standard system
ensures fair ratings of all and reduces the fear of favoritism among employees.3. Establishing clear targets- This method helps individuals in recognizing the goals and
objectives with an ultimate aim of attaining it. Top management is required to attain the
key targets of hotel and set their standards as per those targeted to improve employee’s
performance for the accomplishment of goals (Brown and Harvey, 2011).4. Motivating employees- This method serves as a medium of encouragement of staff by
providing them with pay equivalent to their performance.

The key disadvantages of individual performance related pay (IPRP) are-
1. Complexity reduced to simple- IPRP often reduces the complexity of performance
measurement to a simple method. Simple measure provides no guarantee towards the
quality of productivity. It is very much evident from the case study of Cavendish Hall
Hotel that mentioned company did not have effective performance and customers are not
satisfied who visited the hotel.
2. Leading to hostile work attitude- In the period when there is low customer volume,
multiple employees may compete with each other for gaining attention of single
customer. This instance will lead towards hostile working attitudes among employees.
Resentment may be faced by some if they feel that their opportunity to gain extra
percentage was snatched by someone else.
3. Performances can be subjective- The judgment criteria for same quality of work may
differ from department to department and supervisor-to-supervisor (Thorpe and Beasley,
2004). Managers tend to turn judges at times and their unnecessary judgments regarding
their work performance can decrease the morale of employees leading to unsatisfactory
results.
4. Method inapplicable during recessions- It is seen that during period of recessions in
economic business, promotion or rewards linked to performances are generally not
provided. Therefore, hotel must consider this aspect by looking onto long-term aspect
while introducing this method.
5. Inadequate criterion- Cavendish Hall Hotel should keep clear standards of criteria for
judging the performances of workers. Organization has to set up a reasonable criteria for
evaluating performance of their workers. Adequate criteria can help in judging the
performance of workers for reasonable pay.
Over the decades, it has been seen that employers have been using Individual
Performance Related Pay (IPRP) as a method of reward for higher performance (Prince, 2011).
The 3 main reasons that led to its positive contribution in the organization are-
1. To retain their current skilled staff
2. Want to motivate and make new talents more competitive
3. Fair means of distribution

It helps in enhancing the business performance by motivating workers to perform up to
their best efficiency in order to accomplish their desired objectives and goals. IPRP helps in
retaining employees as they feel satisfied on recognition of their performance by the organization
through pay system. The competitive spirit of new employees is encouraged by motivating them
to serve better performance for the organization (Schweyer, 2010). Lastly, it has been seen that it
is a fair means of distribution among all.
IPRP is applied within Cavendish Hall Hotel by providing extra 1% increment in salary
irrespective of their performance. Furthermore, additional increment is also provided which is
directly linked with the individual’s performance. The method was introduced to enhance the
employee's services leading to overall enhancement in organizational performance. But on the
contrary, results were not as expected by Daphne (Hult, Ketchen and Arrfelt, 2007). The survey
conducted by Daphne to gather their staff’s opinion was not satisfactory. The survey results
proved the dissatisfaction among employees even after the introduction of IPRP as a method of
rewarding system. The hotel incorporates a wide range of services within its ambit like
conferences and banqueting facilities and popular wedding location. It also has different types of
employees, that is, who work for full-time, part-time and there is temporary seasonal staff as well
across its 5 departments. These divisions are events & banqueting, rooming & reception,
housekeeping, food and beverages, HR and Administration.
Performance criteria for all belonging to varied distribution are the same (Aguinis, 2009).
Hotel must provide different criteria measurement for different departments to win their level of
satisfaction from the organization.
Barriers to effective implementation of IPRP scheme
For effective designing and implementation of individual performance related pat
schemes, numerous barriers can be recognized. However, it can be seen that the moral of
workers get affected by providing different PRP’s. It is important for the organization to create a
strong relationship between performance management and performance related pay. The key aim
of establishing this method of performance management system is to assure the positive link
between individual work performance and consequent pay that is attached to their performance.
With the adaption of this method, organization is able to encourage their workers to perform the
given job effectively. This method helps in eliciting greater working efforts and maximizes one's

job satisfaction (Ileana Petrescu and Simmons, 2008). This method is a tool that has a sorting
effect in terms of correct recruitment and retention of employees.
Barriers that are commonly faced by Cavendish Hall Hotel at the time of implementation
of IPRP scheme within their organization are-
1. Designing of equitable criteria for IPRP- Business encounters much confusion at the
time of designing and implementing a standard performance related pay (PRP) system for
individuals. Fairness of criterion may at times not appreciable where judgment is
subjected to different course of job.
2. Correlation of reward with performance- The next barrier is to identify the
remuneration link to the performance. The reward system set must positively contribute
towards the performance of individuals. This is the common issue which is being faced
by Cavendish Hall Hotel management whereby the correlation of rewards with
performance cannot be matched (Porter, 2008). The customer satisfaction of hotel helps
in determining that the policy of IPRP is not leading to positive performance of
individuals.
3. Motivating staff to accomplish goals- The biggest problem is in setting performance
standards that strike a correct balance between paying to make incentive motivational. It
is difficult for businesses to drive employee's attention towards the accomplishment of
goals. This barrier is often faced by employers. Therefore, it is important for Daphne to
identify the system which motivates employees to accomplish the desired objectives.
4. Managers (Peers) uncomfortable rating- It is important for one to be unbiased while
rating each other or their peers. In order to turn fair, it might result in dissatisfaction
among them.
5. Budget Constraints- At times, organization’s limited budget may not provide
continuous increment of 1% in each one’s salary.
6. Difficult to determine the base for measurement- Hotel faces difficulties in measuring
the work performance of individuals especially during the time of changes (Joshi, Liao
and Jackson, 2006). It is difficult for a service sector to determine the qualitative criterion
for determining the performance as they might be misinterpreted.
Barrier as a consequence of implementation of performance
1. There might be reduced intrinsic motivation.

2. Self-esteem might get hurt where the performance is being low rated by managers.
3. Promotes short-term behavior.
4. Difficulties may arise while resetting goals.
5. Conflict arises where there is any negative feedback.
6. Focus is driven by employees on what is being rewarded rather than what are the
organizational needs.
7. Difficulties in maintaining consistency can be faced.
8. The eagerness to compete might erode the trust and loyalty factor among employees.
Alternative reward approach that could complement or replace IPRP
It has been seen that pay system doesn't motivate employees to work harder. It has been
observed that employees are motivated when they are given with extra rewards for the efficiency
served by it for the organization. It is important for Cavendish Hall Hotel to adopt methods that
measure and have a direct impact on the performance of staff (Cox, Brown and Reilly, 2010). In
order to encourage employee’s performance, different alternative methods must be evaluated in
detail. Alternative reward approaches are-
1. Employee recognition- This is a non-monetary method of rewarding employees. “The
best employee for the month” certificate issued by Cavendish Hall Hotel for its
exceptional performance that can boost the morale of employees. Appreciation by
supervisors and managers also serve as a motivational factor.
2. Merit pay method- Management of hotel can provide bonuses or pay level for employees
that are based on individual’s annual contribution to attain the performance objective. If
an individual has served excellent performance for the organization then equivalent
payment shall be provided to fulfill their needs.
3. Piece work system- Here, this type of performance payment states that business shall pay
equal wages for every unit of output served by them. This is the most commonly adopted
method used in hospitality sector for the encouragement of employees in the form of
payment for each room that is occupied by customers (Rushworth and et.al., 2011).
4. Commission- It is also an effective work related pay method whereby the hotel can
establish a fixed rate of percentage payment for every sale of one unit. Management of
hotel can provide commission to consumers when they sell each room. This encourages
employees to perform well.

5. Balance Scorecard Approach- It measures the performance of individuals from four
perspectives that is financial, internal business perspective, innovation and learning
perspective and customer perspective. Each employee can be judged on the basis of all
these criteria and gain reward on the basis of this. The business can systematically frame
their strategy and vision in the light of these rewarding systems.
6. Intrinsic rewards- These rewards are the means of internal motivation whereby
employees are encouraged to put their best efforts. Moreover, in cases where business
lack in serving internal rewards, it decreases their level of competency, ability and
knowledge. In hotel, employees can be intrinsically rewarded where they tend to work for
a higher level of productivity (Schweighofer and et.al., 2008). These may refer to
personal achievements, professional growth and accomplishment.
7. Incentives- Cavendish Hotel may use this method of rewarding which is providing extra
monetary benefits to individuals which are linked to their performances. Therefore,
employees serve the best to their customers to retain them for long term in the business.
8. Extrinsic Motivation- It encourages employees because it provides financial benefits to
them. It results in the increment of salary, over-time, bonuses etc. These also include
verbal praise, public recognition or promotions (Lemieux-Charles and McGuire, 2006).
Thus, these help individuals in enhancing their performances which will ultimately result
in the enhancement of organizational performance.
TASK 2
Appraisal as a performance management tool
The presence of an effective performance management system is often a major difference
between organizations that provides desired results. Performance appraisal is a step whereby
employer evaluates the employee’s job performance. Performance appraisal is an ongoing
process of evaluating employee's performance (Chen, Yang and Shiau, 2006). Through this
process, one can critically evaluate the performance of another.
Importance and effectiveness of objective setting, strategic alignment and lastly feedback
According to Cox, Brown and Reilly, (2010), setting up of objectives must be specific,
valid and reliable, acceptable and feasible and those which are based on organization’s mission
and vision. These set objectives will help the employees of Cavendish Hall Hotel to enhance

their performance and drive their efforts in the accomplishment of desired objectives. Thus,
establishing SMART objectives increase the business performance. Setting up of SMART goals
can be an appropriate approach among workers and managers. SMART goals can be set whether
it is a short or long terms objectives. This will help individuals in clear assessment of what is
expected out of them. For example, managers of Cavendish Hall Hotel can set up the SMART
objectives to enhance the employee’s level of performance by gaining high sales. By matching
employee’s performance with the SMART objectives set by organization can result in effective
sales.
According to Seidel and Shavelson, (2007), strategic alignment plays an important role
for gaining business success. The strategic alignment also ensures that each person in the firm
directs their efforts to attain the organizational goals. It also helps in linking business strategy
with its organizational culture as it helps the cited company to change and align their vision with
that of their leadership goals, with different departments, etc. From the view point of Gestwicki,
(2013), if cited hospitality firm has to experience their organizational strategic alignment then
their management and administrating goals need to be in a proper order. However, if employees
are not competent and not having that much of knowledge to perform the task, then personnel
manager can focus on conducting a training and development program for the new as well as
existing employees. Further, this strategic alignment helps in promoting individuals as well as
the team efforts by developing self-awareness and permitting employees to take part in the
decision making of organization. This will help the cited company to achieve goals and
objectives in a predefined manner.
However, strategic alignment not only helps to set goals and objectives for the mentioned
hospitality. It emphasizes on aligning the entire organization with employees who are working in
Cavendish Hall Hotel. Employees need to synchronize their daily efforts as per the needs and
requirements of their customers as well as of the cited hospitality firm.
According to Klein and et.al., (2007), feedback generally means getting a positive or
negative work done by an individual. Further, it is considered as an essence of the work culture
as constant feedback plays a crucial role in motivating the employee's morale so that they can
give their best efforts and performance to achieve the organizational goals and objectives.
Moreover, providing feedback can boost the employee's morale as it will help him to not commit
the same mistake again. Generally, there are two types of feedback which personnel manager of

cited hospitality can impose. One is positive and other one is constructive. Positive feedback
carries positive essence of reinforcing the desired behavior of employees. However, constructive
feedback evaluates the area where workers within hospitality require maximum improvement.
From the view point of Mumford, (2006), effectiveness of feedback is necessary to
develop the employee's morale as it evaluates the individuals who are lacking in performance
and initiatives that can be taken to improve them in an effective manner. Further, if employees
within Cavendish Hall Hotel would get constant feedback then it can be evaluated that whether
they are performing well or becoming a liability for the organization. Cited hospitality firm will
lead to termination of employees and focus on recruiting the best one from alternate source.
Links to appropriate development plans and support
Cavendish Hall Hotel needs to develop some specific plans to improve their performance
as well as to touch the heart of their potential clients and customers. In the past few years, cited
hospitality firm comes up with various drawback and comments which are given by individuals
who stayed in that hotel (Allison and Horemans, 2006). The comments on online sites were
unpredictable and unbelievable. On the contrary, to develop the organization’s respect and
goodwill, Cavendish Hall Hotel has to adopt various changes which will help them in improving
their productivity as well as their lost image globally. Hospitality firm must focus on the
following explained points: Improved Recruitment and retention- Employees who have interest of working in
hospitality tend to be happier and give productive results for the business organization.
Moreover, recruitment and training and development are the two areas where monetary
values are assigned and if organization fails to recruit effective employees, then all the
expenses which have been incurred will go waste (Marsden and Sonnino, 2008). Further,
more stable and trained workforce results in the improved operating profits and revenue
for the cited hospitality firm. Training and development- All the employees who are working in Cavendish Hall Hotel
need to be given with effective training so that individuals will be able to achieve their
individual as well as organizational goals. Every department within mentioned hospitality
is having its own significance and workers who are not well trained in any of the skills
shall go with an effective training program (Guest, 2011).

 Performance appraisals- Organization along with the Individual Performance Related
Pay (IPRP) can implement performance appraisal method for motivating their potentially
talented employees in order to achieve the organizational goals and objectives. This
appraisal consists of all the basic specifications which employees must have to complete
their tasks and duties efficiently within mentioned hospitality (Mahmoud and et.al.,
2009). This performance appraisal is made on yearly basis which will help individuals to
improve their pay structure. Improved pay structure will motivate the employees and they
will work with the best of their talent and efforts to achieve the organizational aim and
objectives.
From the above explained points, it is clearly evaluated that a successful training and
development program leads to:
 Development of employees to achieve cited company’s goals and objectives.
 Staff that will become more efficient and productive.
 Employees are motivated and perform their tasks with the best of their efficiency and
capability.
 For dissatisfied employees, a pool of new employees are trained which can replace them
any time within cited hospitality firm.
 Individuals who are engaged in continuous learning are better to meet the challenges
which organization faces in their daily life.
 Motivated staff focuses to work on innovation and program to develop the healthy image
of cited hospitality.
Links to appropriate methods to manage poor performance
Cavendish Hall Hotel is facing consequences of poor performance of employees which is
significantly affecting their productivity and goodwill. Organization can improve their worker’s
performance by implementing some steps which have been discussed below:
 Alignment of HR- Empowering the HR department to undertake different functional
activities apart from their routine activities which consists of administrative functions,
recruiting and selecting, training and development and various will lead towards the
success and development of cited hospitality others (Tallis and et.al., 2008).