Introduction
Employee performance management is one of the organizations’ most effective tools to influence their organizational development and employee growth. A clear performance management system enables the HRM to set clear performance goals, making it easier for employees to understand their expected job (Management Concepts, 2015). In addition, it enables HRM to have individual employee accountability, which ensures that each employee achieves their set goals and performance levels.
One of HR the functions within a performance management system that contribute to effective training is empowering managers through having a clear competency model and proficiency levels. While the managers evaluate workers on competency to inform a plan, it is the function of HR to ensure everyone is in the individual development plan and not only considering performance assessment. When the development plan and training are considered an empowering tool rather than the opportunity for managers to tackle performance issues, it becomes well accepted (Management Concepts, 2015). Thus, the HRM should be very keen in the workplace to watch out for development and training that is set out as performance improvement plans and those without realistic goals. This will enable them to rectify those without realistic goals and support the performance improvement plans.
HR has the function of tracing strategic goals to human capital goals and backup the achievement of the strategic plan through monitoring and aligning individual training goals with the organizational strategic plan. Effective training and development are part of an organization’s strategic plan and have a significant contribution to dealing with organizational needs (Management Concepts, 2015). Thus, HR has the function of providing support to employees that help realize the organizational goals. For instance, if the HR determines that a specific strategic goal of the company requires competency in data analysis, the HR can identify the areas that need development and provide them with appropriate training. In addition, HR can provide the most effective development strategy which may be helpful to the employees in improvement, such as a training program.
HR has the function of supporting individual employees’ needs in an organization. They should ensure that each employee’s goals have been mapped to specific, measurable competencies. In doing so, HR can identify the main areas of improvement for the individual employees and tailor training programs to address those needs (Youssef, 2015). In addition, HR can help identify if a low-performing employee would be able to excel in another role and how to use the training to prepare the employee for the new role better.
How an Effective Performance Management System Along With Compensation and Benefits Can Attract, Develop, and Retain Talented Employees
An effective performance management system helps create a friendly and welcoming environment in the workplace that is communication free. This gives employees confidence in their workplace because they can freely raise their issues and opinions (Youssef, 2015). Organizations should take employee feedback and opinions seriously and ensure that employees know how the issues have been addressed. This will positively impact the organizational culture, attracting and retaining top talents.
The other importance of an effective performance management system is that it helps an organization recognize and reward good employee performance. When employees feel respected, and their effort is appreciated, it reduces the turnover rate (Feldmann, 2017). Recognizing and awarding employees is a way of creating employee loyalty in the organization. Thus, employees who feel rewarded are unlikely to leave the company (Youssef, 2015). This implies that using an effective performance management system will likely help[ an organization retain its top talents.
An effective performance management system provides opportunities for growth in an organization, encouraging employee retention. Organizations that use their performance management system to help their employees grow professionally will likely have employee loyalty (Youssef, 2015). Most employees are likely to leave a workplace that has no growth opportunities. Therefore, providing them with the right growth opportunities is a strategic move for retaining them in the workplace(Feldmann, 2017). Using performance management systems provides organizations with employee performance metrics essential in creating and measuring performance to know where to establish growth opportunities.
A good performance management system ensures work clarity in an organization. When an organization effectively uses a performance management system, it guarantees that each employee knows their work and what is excepted of them. Goal setting is part of a performance management system that ensures that individual and organizational goals are aligned together (Feldmann, 2017). High turnover of the top talents causes organizations to significantly resources drain, which is why organizations must seek to retain their best employees (Tolan, 2017). An effective performance management system enables an organization to clearly define its goals and develop strategies that help to ensure they are linked to broader organizational goals hence helping in retaining top talents.
When an organization uses an effective performance management system, they create a pool of supportive managers who help hire and retain top talent. Employees are likely to leave jobs due to poor managers and supervisors (Tolan, 2017). An effective performance management system plan ensures swift cooperation between employees and managers, increasing managerial support. In addition, it facilitates the training of managers to be more supportive, empathetic, and responsive, which helps enhance professional growth and promote staff well-being (Feldmann, 2017). Thus, using an effective performance management tool and reward systems goes a long way in retaining employees.
Finally, effective performance management systems help an organization to understand employee exists. Although organizations struggle to ensure that they retain their top talents and reduce general employee turnover, it is inevitable that on some occasions, they will receive resignations from employees. This provides an opportunity for an exit interview which provides valuable information for an organization (Tolan, 2017). Employees who leave an organization to pursue other dreams or better opportunities are likely to provide honest feedback about the organization’s general outlook. Thus, integrating the information provided with the performance management systems will enable the company to note different areas for improvement and work on them before other employees leave hence retaining employees.
Employment and Labor Laws and Regulations that Impact these Areas of HRM Listed Above and the Relationships Between Employees and Employers
Different labor laws and regulations affect the above factors and the relationship between the employer and employee. These laws are developed to protect employees and employers and vary between countries. One of the main areas of concern is labor relations, which are significantly influenced by globalization. As the world becomes a global village, labor organizations are gaining more power due to other stakeholders’ increased demographic and involvement (Society for Human Resource Management, 2016). Thus, these labor organizations have expanded their strategies and tactics to use their influence to align their priorities. Labor organizations have provided employees with much protection, which makes it difficult for HR to implement performance management systems and training effectively (Society for Human Resource Management, 2016). For example, employees can use labor laws about discrimination to deny job rotation making by stating they have been targeted due to their gender, race, and religion. This makes it difficult for HR to implement resolutions learned from performance management systems.
Another important labor law and regulation concerns the reward and compensation systems. The laws regarding the compensation of employees have been changing dynamically from having a compulsory paid leave to defining employee status as either intern, contractor, employee, or temporary worker. Other benefits which have been affected by the compensation laws include credit counseling, financial planning, dealing with stress, and student debt. This has forced companies to incur additional costs in ensuring that these services are met for employees. This will positively impact the company’s retention levels because as companies adopt more of these policies, they will likely become more rewarding to employees (Society for Human Resource Management, 2016). For instance, giving employees and their families insurance and medical coverage may help retain employees in the workplace because they feel that the organization cares for them.
The anti-harassment laws have become an important legal issue that seeks to prevent all employees from harassment. Thus, as companies strive to adhere to these laws and regulations, they must create policies ensuring that all employees are treated with dignity. The harassment law positively impacts attracting and maintaining top talent in an organization (Society for Human Resource Management, 2016). Companies that strictly follow harassment laws and ensure that their employees are treated fairly are likely to have a high retention rate than those that do not. In addition, one of the elements of eliminating harassment in the workplace is encouraging free communication in the organization, which is an essential factor in increasing employee satisfaction hence a better retention rate. This shows that harassment laws positively impact the recruitment and retention of top organizational talent.
How the Functions of HRM Work Together to Optimize Organizational and Employee Behavior
The different HR functions work together to optimize organizational and employee behavior by enhancing the performance of every employee. HRM’s function is to evaluate and find the appropriate employee training (Management Concepts, 2015). In evaluating their performance, they establish various factors that lead to good and poor performance. For instance, having positive motivation, a positive outlook, and a balanced view of an organization have been associated with good performance. However, other factors such as negativity, power games among employees, unwillingness to take responsibility, failure to follow instructions, and insubordination have been associated with poor organizational performance (Youssef, 2015). Thus, using the performance management system, the HRM can identify the behavior that leads to negative behavior and eliminate them in the organization. This, in turn, leads to positive behavior, which optimizes organizational and employee behavior.
The HRM function to align the organization’s strategic goals with individual goals provides the HRM with an opportunity to outline the expected behavior to the employees. When each employee’s strategic goals are set aside, they have a parallel behavior that they must adopt to achieve them. For instance, if an employee’s individual goal is to increase their KPI by ten points, they have to show more motivation and dedication to work than they used to do. This shows that aligning individual goals to the company’s strategic goals provides an organization with an opportunity to outline expected behavior (Youssef, 2015). In addition, rewarding certain behaviors in the workplace plays a big role in shaping the behavior of employees. When the company wants to encourage specific behavior, it can use rewards such as gifts, recognition, and paid leave to promote them. This implies that integrating different HR functions can efficiently optimize specific organizational and employee behavior.
The other HRM function which can optimize organizational and employee behavior is providing support for employees’ individual needs. When the HRM use the performance management system to provide employee support, they create a good rapport with the employee. In this case, employees feel that the company cares for them and their well-being, so their loyalty will increase (Youssef, 2015). Employee loyalty in an organization involves following its rules and policies to attain optimal behavior. For instance, when an organization supports employees by taking them to ethics training, they will likely note that the company values their ethical input. Therefore, the employee will practice ethical behavior because they know their organization is concerned about ethics and has provided the right support for it.
Conclusion
Human resource is a very significant factor in determining the success of an organization. Therefore, HR has to ensure that they use the correct performance management system to track and suggests methods for improving employee performance. HR has three functions within the performance management system: empowering managers, tracing strategic goals to human capital goals, and supporting individual; employee needs. When used effectively, the performance management system can be a tool for attracting, developing, and retaining top talents. However, various laws and regulations impact how the performance improvement plan is applied and the relationship between employees and employees, such as labor laws, reward and compensation laws, and anti-harassment laws. Finally, it is important to note that HRM functions can work together to provide optimal organizational and employee behavior.
References
Feldmann, J. (2017). Adapting the performance appraisal process to meet the needs of the modern workplace (Links to an external site.). Forbes.
Management Concepts. (2015). How HR can support better IDPs (Links to an external site.).
Society for Human Resource Management. (2016). Future insights: Top trends affecting the workplace and the HR profession according to SHRM special expertise panels (Links to an external site.).
Tolan, J. (2017). Hiring top talent? Here are the best methods for sourcing, screening, and interviewing (Links to an external site.).
Youssef, C. (2015). Human resource management (2nd ed.). Bridgepoint Education.