Performance Management and HR Development in Entrepreneurship

This report delves into performance management within an entrepreneurial context, focusing on a hypothetical scenario at NAB Bank where a newly hired marketing representative's performance necessitates expert HR advice. It covers best practices in performance management, emphasizing goal setting, feedback, and rewards, and explores the integration of human resource development with performance management through feedback surveys and potential appraisals. The report also addresses issues surrounding underperformers and high performers, suggesting strategies for motivation, engagement, and retention. Furthermore, it examines reward management strategies, advocating for internal rewards to boost employee motivation, and discusses aligning HR strategies with the firm's corporate strategy through goal setting and strategic recruitment. The analysis provides actionable insights for strengthening HR policies and optimizing workforce performance in a competitive market.

Performance Management
MANAGING HUMAN CAPITAL
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Performance Management
Table of Contents
Performance Management................................................................................................3
Features of Best Practices in Performance Management....................................................3
Integrating Human Resource Development With Performance Management Function......4
Issues Surrounding Underperformers And High Performers................................................5
Reward Management Strategy..........................................................................................6
HR Strategies and Firm’s Corporate Strategy.....................................................................6
Conclusion.........................................................................................................................7
Bibliography......................................................................................................................8
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Performance Management
Case Background
NAB Bank has recently hired a marketing representative who is 31 years old and has been
demonstrating excellent performance in his job. As a result, the human resource management
department is seeking an expert advice on how it can strengthen its overall performance
management system and deal with high performing people in a better way so that they remain
motivated and engaged in their jobs.
Performance Management
Performance management is one of the most important core functions of human resource
managers that helps business organizations in optimising the performance of their workforce.
It allows them to create a performance oriented environment in the workplace, deal with
underperforming employees and rewarding employees who are able to achieve their
performance objectives (Van Dooren, et al., 2015). Performance management can provide a
great help to a company in strengthening its human resource management policies and
practices.
Features of Best Practices in Performance Management
An effective performance management system can do wonders for a business organisation. It
can not only improve the productivity of a company but can also help it in improving job
attributes, such as job satisfaction, motivation, organisational and job commitment, etc. of its
employees. On the other hand, a dysfunctional performance management system can prove to
be a disaster for business organizations. It can negatively affect the performance of the
employees and can hit their morale and motivation levels beyond expectations. Therefore, it
is important that performance management systems include best practices, which have the
follow features:
Goal-setting  Goal setting should be carefully done in a performance management system.
The employees should be involved in deciding their performance objectives and only those
goals should be established which are specific, achievable, measurable, time-bound and
relatable (Kerzner, 2018).
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Performance Management
Feedback  Performance feedbacks should be regularly carried out so that the employees as
well as the managers are aware of the progress. It also helps in identifying skill gaps, which
can further be helpful in designing training and development programs for the employees
(Richard, et al., 2009).
Rewarding and appraising  performance should directly be linked with rewards and
potential appraisals for making a performance system more effective as they can be helpful in
reinforcing the importance of performance amongst the employees (Gerrish, 2016). They can
also help in identifying employees with the ability to rise in the organisational hierarchy,
which can ultimately help an organisation in succession planning.
Integrating Human Resource Development With Performance
Management Function
Human resource development is of an utmost important to contemporary business
organizations as they are striving hard for surviving in the market and developing their
human resources can provide them a competitive edge. Therefore, it is important that
performance management systems are able to help business organizations in their human
resource development intentions (Duggan, 2018).
To integrate human resource development with performance management systems, two
necessary elements that have to be attached to a performance management systems are
performance feedbacks and potential appraisals (Talalweh, 2016). The management at the
bank can introduce a system or performance feedback surveys in the performance
management system where an employee would first provide a feedback about his own
performance, which would then be examined against the feedback of his or her manager.
Feedback surveys can include questions, such as:
 Do you feel that you have been performing well?
 Do you feel that you lack certain skills or competencies? etc.
Such questions can help the managers in identifying if the employees feel that they lack
certain skills and competencies and have a desire to fulfil their skill gaps through training and
development programs (Buckingham & Goodall, 2015). Further, potential appraisals in
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Performance Management
performance management can help the bank management in identifying employees who have
the skills or the competencies to take up higher positions in the organisational hierarchy.
Once such employees are identified, it can become easier for the management to start training
and developing them to take up a higher job position whenever a vacancy originates in the
company (Adhikari, 2010). In this way, performance management system can be linked with
human resource development by the management of the bank.
Issues Surrounding Underperformers And High Performers
Performance management systems can render useful results but the success of an organisation
totally depends on the way it acts on the results of a performance management system.
Performance management systems can sometimes identify underperformers as well as high
performing employees and the managers should have the right strategies to deal with both
types of employees. Certain issues that surround underperformers and high performers are
discussed below:
Underperformers:
- First of all, managers have to identify the right cause that has resulted in an employee
underperforming in the workplace
- Secondly, managers have to implement strategies that can motivate and engage the
underperforming employees to register a better performance over the next assessment
period
- Thirdly, underperforming employees can lose their morale and can show a greater
tendency to quit. This is an important issue that the managers have to deal with
(Magalhães, 2015)
- Fourthly, employees that are underperforming continuously, are required to be given
considerable warnings, which can also lead to termination in certain cases.
Termination of an underperforming employee is another issue in business
organizations
High performers:
- First of all, employees who perform high start to expect more from their
organisations. Therefore, they have to be rewarded and appreciated in a way that they
remain motivated and do not lose their morale.
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- Secondly, high performing employees start demanding promotions and salary hikes
after a period of while. Therefore, business organizations are required to carry out
succession planning for them.
- Thirdly, making high performers stick to a particular job can make the work boring
for them. Therefore, it is important that the managers provide them with challenging
work on regular basis and are able to keep them engaged (Australian Institute of
Business, 2017).
- Lastly, high performing employees are in great demand in the market and are easily
poached by rival firms. As a result, retaining them is another issue that the managers
have to deal with.
Reward Management Strategy
Rewards are an important part of a performance management system and the way in which a
company rewards its employees for achieving their performance objectives can matter a lot to
the modern day employees (Foss, et al., 2015). For the management of the bank, it is
important to consider its nature of business and the important of keeping the employees
motivated in the banking sector.
In a research carried out by a Professor of Psychology at the University of Rochester, it was
found that external rewards, such as money, had a negative impact on employee motivation
levels whereas internal rewards, such as recognition, praising, verbal reinforcements, etc. had
a positive impact on employee motivation. The bank can use this concept in its performance
management system and can separate its rewards system from compensation and benefits
plan. As performance management systems are more oriented towards the growth of the
workforce of a company and its overall development rather than helping a company in
deciding the compensation and benefits for its employees. The company can use internal
rewards for motivating the employees to perform better. These internal rewards can comprise
of verbal reinforcements, such as recognizing the efforts of an employee in a meeting,
starting employee of the month or employee of the week reward positions, etc. (Cherry,
2018). In this way, the reward system of the company can be designed to fit into its
performance management system, which would be helpful in achieving a performance
oriented and a motivated workforce.
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HR Strategies and Firm’s Corporate Strategy
Human resource management is considered to be really important in the modern day business
world where organizations are striving hard to remain competitive in the market. Business
organizations have shifted their focus towards strategic human resource management, which
aims at aligning the human resource management practices of a company with its
organisational goals and objectives and corporate strategy (Delery & Roumpi, 2017).
One of the best ways that can be used by the bank to align its corporate strategies with human
resource management strategies is to implement a system of goal setting. The management of
the bank can implement a system where the employees would be empowered to define
performance objectives for themselves on the basis of the corporate strategy of the company.
The performance objectives set by them could then be reviewed and validated by their
managers. Human resource management can also be aligned with the corporate strategy of an
organisation using the right recruitment and selection strategies. Through recruitment and
selection programs, the bank will be able to identify the right person for the right job and
ensure better overall productivity, efficiency and profitability (Righeimer & Energy, n.d.).
Further, human resource policies, such as training and development, retention of employees,
etc. can also help a business organisation in aligning its human resource management
strategies with its corporate strategies.
Conclusion
The NAB Bank is operating in a market where the competition amongst rival firms is
relatively high, which makes it important for the company to optimise the performance of its
workforce to achieve better results. The management of the bank can look into the
information shared above and can use it to strengthen its human resource management
policies, which would help it in optimising the performance levels of its workforce.
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