solved Explain the concept of “performance management.” Identify the most prominent

Explain the concept of “performance management.”

Identify the most prominent types of performance management plans.
Compare the plans’ impact on the employee and the organization.
Discuss the relationship between performance management and compensation.
Evaluate the factors that should be considered when successfully implementing performance management within an organization.

Martocchio, J.J. (2017). Strategic compensation: A human resource management approach Retrieved from
https://www.content.ashford.edu (Links to an external site.)
Felecia Commodore, Marybeth Gasman, Clifton Conrad, & Thai-Huy Nguyen. (2018). Coming Together: A Case Study of Collaboration Between Student Affairs and Faculty at Norfolk State University. Frontiers in Education, 3. https://doi-org.proxy-library.ashford.edu/10.3389/…

Hamel, G. (2019). Advantages & Disadvantages of seniority. Retrieved from
https://www.bizfluent.com (Links to an external site.)
Define the concept of seniority and merit pay plans, including the strengths and limitations of such plans within an organization.
Seniority in the workplace is a state of being with a company for a span of time. Historically, employees with more length in service would mean more experience with a task or position. Therefore, they are automatically given a yearly pay increase assuming the worker is of higher human capital. “Thus, seniority pay rewards employees for acquiring and refining their skills as indexed by seniority” (Martocchio, 2017).
Merit pays in short is pay based on performance. The employee performance is typically evaluated via performance appraisals conducted typically twice a year. Differences in job performance earn personnel permeant pay increases (Martocchio, 2017). Even though merit pay is one of the most common compensations systems used in the United States, it has its pros and con’s as do all the pay reward plans.
Seniority, while they tend to theoretically motivate employees to stay loyal to the company (less turnover), keep companies from favoritism accusations, and facilitates the administration of pay programs, they can also backfire on the organization. In my experience there are 3 types of employees those engaged with the business, those not engaged, and those that can be influenced to be in either category. Unfortunately, many of the un-engaged employees are those with tenure that have been denied promotions, don’t do well with change, or are disgruntle toward their state in the business. However, unhappy employees may stay with the company due to their ability to still gain a seniority-based raise. Considering if they have not grown in their performance, they may have a hard time gaining employment with another company making equivalent or better pay. Therefore, costing the company money by increasing pay for employees that are not producing or granting the establishment a return on investment.
Merit pay has similar strengths and limitations. This structure is popular because it provides a guide for success by requiring clear communication of targets that when satisfied guarantee return on investment for the business. Thus, employers can fit high talent prospects to jobs promoting increase pay for increased performance. However, limitations begin with companies being able to commit to providing meaningful increases in pay and setting pay differentials (Martocchio, 2017). According to Giancola (2015), with merit funds limited in recent years to about three percent, money is often not available to grant substantially larger increases to the highly rated without causing some pain to other employees. While the average increase for high performers is over 4%, what is fair for average performers? The base lines can cause financial strain on the business or just lost in moral and company brand if seen unfair.
Discuss the job, organizational and/or other factors that should be considered when deciding between the two.
Companies should consider “the commitment from top management and the design of jobs before endorsing the use of merit pay systems” (Martocchio, 2017). The HR and leadership partnership must be strong so that targets are SMART (specific, measurable, attainable, relevant, and can be time managed) and communicated clearly. In addition, leaders must be able to relay, coach, and follow up on said goals. Both seniority and merit pay plans require the company be aware of cost of living, societal differentials, and the company budget. Understanding the market, competition, and growth plan will also assist in determining which compensation plan is the best fit.
References:
Giancola, F. (2015, November 1). Are high-performing employees being adequately rewarded under merit pay plans? Employee Benefit Plan Review, 70(5).
Martocchio, J.J. (2017). Strategic compensation: A human resource management approach Retrieved from
https://www.content.ashford.edu (Links to an external site.) (Links to an external site.)