1. Performance management is often associated with achievement of quantitative goals and objectives, application of key performance indicators directing activities of employees, and it also assesses the performance of the company, its departments and employees on the basis of quantitative criteria. It is one of the areas in management, which deals with the problem of setting and maintaining focused management in an organization, coordination and subordination of all areas of activities, achievement of common goals, elimination of obstacles and contradictions between goals and gaps between planned and actual effectiveness. Performance management serves various functions. The first function is development of a strategy for companys sustainable growth and identification of factors that help to manage the activities efficiently. The second function is analysis and identification of problems and searching for ways to improve the performance of the organization. The next function is organization of the management process with the aim of achieving planned results. The fourth function is monitoring and estimation of the personnels activity and performance. One more function is remuneration and promotion of employees in accordance with the results.
2. Nowadays many organizations use different job evaluations in order to define employees productivity over a period of time. Job evaluation is a systemic procedure for determining the relative worth of jobs within an organization and for establishing an adequate wage structure (Bose, 2012, p. 245). Evaluation includes basic functions of job performed by an employee. The fact that job evaluation is an effective method to determine employees progress makes it and advantageous tool for managers. In such a way, companys managers can identify whether employees are appropriate fits for their positions. Regular and systematic evaluation of staff has a positive effect on motivation of employees, their professional development and growth.
There are many methods and techniques of personnel evaluation used in the practive of working with personnel. Most methods can be divided into two major groups:
1. Methods which are based on formalized approaches (questionnaires or tests).
2. Methods based on the use of non-formal approaches to evaluation of workers (interviews, group discussions, or observations).
Testing is evaluation of workers on results of answering a set of questions and solving tasks. It is the easiest tool to determine the level of professional qualification. There are tests for accountants, engineers, and so on. Tests aimed at identifying abilities are especially popular. Testing is convenient as an additional assessment methodology since information is easy to handle. The main disadvantage of the method is that test results cannot give a complete picture of an individual. Testing is usually used in combination with other methods, such as interviews.
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Another common method is scaling. It assumes defining point values for indicators. These points characterize the severity index. This method is not associated with high costs of development and therefore is convenient and economical. However, it is associated with difficulty. The numerical designation of manifestation of the indicator implies a wide range of interpretation of the appraiser that depend on the level of subjectivity of his/her claims.
Another method is interview. The main advantages of the method are low cost and versatility. It is possible to develop various modifications of assessment interviews. The main disadvantage is complexity of work with little employee survey.
3. Company management is designed to perform a set of critical functions, including setting goals, developing plans, policies, methods, strategies and tactics. Managers organize coordinate, supervise, and control as well as represent the driving force and a connecting link between employees of various organizational levels.. Planning is only one of the functions. However, it is one of the most important. A compensation plan directs companys activities as a whole. There are different types of compensation plans. The first type is a straight salary plan. It is the simplest one. An employee receives a fixed amount of money regularly. It is usually paid each week, month or several times per month. This plan represents the whole payments for the services. It is extremely widespread among industrial companies. Another type of compensation plan is a straight commission plan. In accordance with this plan, salary is paid depending on employees productivity. The third type of compensation plan is a commission and salary plan. This plan is rather widespread among modern companies. The plan is a combination of a fixed salary and commission plans. Salary is paid regularly on weekly or monthly basis with the additional sum of bonuses that depend on employees productivity. This type of a compensation plan has both motivation and control functions.
4. The main objective of employers is searching and retention of talented employees. If an employer decides to hire a person, he/she automatically assumes certain obligations to ensure the well-being of that person. Therefore, conducting effective compensation policy plays a key role in the management of human resources. In this case, efficiency implies creation of a labor remuneration system of that would differentiate the requirements for the work tasks, as well as appropriately account for employees knowledge and experience. All types of remunerations and incentives are considered as a whole within the framework of a compensation package. The main task is to create a system of incentives for workers based on the principle of earning rather than receiving money in the form of salary and bonuses. Remuneration depends on individual performance, as well as performance of departments and the organization as a whole. The simulation compensation policy is implemented on the increase, from bottom to top - from a person, the nature of his/her position, the complexity of work, professional, personal qualities or expectations for remuneration for work. Compensation and employees benefits policy budget relates to the budget and capabilities of the organization to pay its workers and make them loyal with additional benefits. Important for employees benefits include medical insurance, including disability insurance, and retirement plans. Some employers also provide paid vacations and sick leaves. Experts affirm that benefits for employees improve their productivity and increase their work efficiency.