RIZAL TECHNOLOGICAL UNIVERSITY

Boni Avenue, Mandaluyong City

COLLEGE OF ENGINEERING AND INDUSTRIAL TECHNOLOGY

INDUSTRIAL ENGINEERING AND TECHNOLOGY

WRITTEN REPORT
TE 4: Job Evaluation, Wage and Salary Administration

Topic/s: Organizational Performance:

Performance Measurement
Reviewing and Supporting Performance and Rewarding Performance

Eva, Kent Justine J.

CEIT-06-1001P

Dr. Nestor Mirhan Japis, PIE

Professor
I. Title

Organizational Performance

II. Outline

2.6.4 Performance Measurements

2.7 Reviewing and Supporting Performance and Rewarding Performance

III. Objectives

 To understand the importance of performance measurements

 To determine the importance of Performance Review, Supporting and Rewards

 To know different methods of performance review

 To identify some of the rewards and incentive in the organizations

 To determine the role of performance measurement in the organization.

IV. Introduction

Organizational performance is composed many different factors. This factors determine

how the workers, productivity and cost performed within the organization. Performance

measurement plays an important role within the organization it helps in identifying and tracking

progress of organizational goals, it identify opportunities for improvements and use to compare

the performance of internal and external standards. Reviewing the performance of organization

also an important step in formulating the direction of the strategic activities of the organization.

Improvement of workers, employees and of the organization does not occur in an instant,

if happen for long time, it starts in gathering necessary feedback from the management and as

well from the feedback of the people within the organization. For the individual performance they

are evaluated based on the performance they show within a certain period of time, this might
determine their next position or may give them necessary rewards or recognition if they perform

well.

Many group or organization improve so much because of the action they perform when

they get the feedback. Some organization do make trainings and seminars. While some other

motivate people through rewards, recognition and compensation they offer. It is important for the

managers of the organization to know what is the performance of people within the organization,

it is to make sure that they can take action before some people lost their effectivity in the

organization.

V. Contents

2.6.4 Performance Measurements

Performance measurement is a determination of what a program accomplishes and whether

desired results are being achieved. Performance measurement is the ongoing monitoring and

reporting of program accomplishments, particularly progress towards pre-established goals.

Performance measures may address the type or level of program activities conducted (process),

the direct products and services delivered by a program (outputs), and/or the results of those

products and services (outcomes). A “program” may be any activity, project, function, or policy

that has an identifiable purpose or set of objectives.

Methods of performance measure3

Role of Performance Measurement

 Identifying and tracking progress against organisational goals

 Identifying opportunities for improvement

 Comparing performance against both internal and external standards

METHOD OF PERFORMANCE MEASUREMENT

1. Traditional Performance Measurement:

• Productivity, which quantifies the outputs and inputs of an organization and expresses the two

as a ratio. Generally, the ratio is expressed as output to input.

• Effectiveness, which determines the relationship of an organization’s outputs to what an

organization is intended to accomplish.

• Quality, which examines an output or the process by which an output is produced. Quality is

indicated by attributes such as accuracy (or error rate), thoroughness, and complexity.

• Timeliness, which evaluates the time involved producing an appropriate output.

2. Balanced Scorecard Method:

The balanced scorecard approach to performance measurement is an advanced method

created in the early 1990s to determine whether the activities of an organization are meeting its

objectives in terms of vision and strategy. Originally, the balanced scorecard method was strictly

a performance measurement system which required management to view an organization’s

operations from four key perspectives: customer, internal business, innovation and learning, and

financial.

The balanced scorecard approach provides an organization’s management/administrators with

a new way to assess how well their organization is functioning, predict future performance, and

align the organization toward new strategies to achieve breakthrough performance. It provides

a framework that not only provides performance measurements, but helps planners identify what

should be measured
 2.7 Reviewing and Supporting Performance and Rewarding Performance

A performance review or appraisal, also referred to as a performance review, performance

evaluation, (career) development discussion, or employee appraisal, is a method by which the

job performance of an employee is documented and evaluated. Performance appraisals are a

part of career development and consist of regular reviews of employee performance within

organizations.

Performance appraisal is a systematic, general and periodic process that assesses an

individual employee's job performance and productivity in relation to certain pre-established

criteria and organizational objectives. Other aspects of individual employees are considered as

well, such as organizational citizenship behavior, accomplishments, potential for future

improvement, strengths and weaknesses, etc.

Potential benefits of performance review

1. Facilitation of communication

Communication in organizations is considered an essential function of worker motivation. It

has been proposed that feedback from PA’s aid in minimizing employees’ perceptions of

uncertainty.Fundamentally, feedback and management-employee communication can serve

as a guide in job performance.

2. Enhancement of employee focus through promoting trust

Behaviors, thoughts, and/or issues may distract employees from their work, and trust issues

may be among these distracting factors. Such factors that consume psychological energy can

lower job performance and cause workers to lose sight of organizational goals. Properly

constructed and utilized PAs have the ability to lower distracting factors and encourage trust

within the organization.

3. Goal setting and desired performance reinforcement

Organizations find it efficient to match individual worker’s goals and performance with

organizational goals. PAs provide room for discussion in the collaboration of these individual

and organizational goals. Collaboration can also be advantageous by resulting in employee

acceptance and satisfaction of appraisal results

4. Performance improvement

well constructed PAs can be valuable tools for communication with employees as pertaining to

how their job performance stands with organizational expectations

5. Determination of training needs: “Employee training and development are crucial

components in helping an organization achieve strategic initiatives”. PAs can especially be

instrumental for identifying training needs of new employees. Finally, PAs can help in the

establishment and supervision of employees’ career goals.

Three main methods used to collect performance appraisal (PA) data

 Objective Production

The objective production method consists of direct, but limited, measures such as sales

figures, production numbers, the electronic performance monitoring of data entry workers, etc.

The measures used to appraise performance would depend on the job and its duties. Although

these measures deal with unambiguous criteria, they are usually incomplete because of

criterion contamination and criterion deficiency.

 Personnel

The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents).

Most organizations consider unexcused absences to be indicators of poor job performance,

even with all other factors being equal; however, this is subject to criterion deficiency. The

quantity of an employee’s absences does not reflect how dedicated he/she may be to the job

and its duties.

  Judgmental evaluation

Judgmental evaluation appears to be a collection of methods, and as such, could be

considered a methodology. A common approach to obtaining PAs is by means of raters.

Because the raters are human, some error will always be present in the data. The most

common types of error are leniency errors, central tendency errors, and errors resulting from

the halo effect.

Rewarding performance

It’s as important to reward good performance as it is to motivate and monitor performance.

Reward strategies determine the level and mix of financial and non-financial rewards required

to attract, retain and encourage individuals with the skills, abilities and competence necessary

to make your business successful. Reward and recognition strategies affect employee attitudes

and behaviour.

Financial rewards

1. Remuneration: money paid for services or work done.

Having appropriate remuneration or pay structures is important to better attract and retain

employees and to ensure equity in your workplace.

There are a number of factors to consider in developing pay levels.

 Employer-driven (or product-market) competition. This places an upper boundary on

what employers are willing to pay.

 Employee-driven (or labour-market) competition. This places a lower boundary for which

employees will be willing to work.

 Deciding what to pay. As an employer, you still have discretion regarding the actual

amount paid, over and above legislated minimums (awards and agreements in the

workplace). Pay grades or scales provide salary ranges for particular job classifications.
 Employers can choose to offer a salary within the range at a higher or lower level based

on skills and experience.

 Market pay surveys. These represent a form of benchmarking, a process whereby a

business compares its own practices against those of the competition.

 Developing a job structure. Based on the principles of job analysis and evaluation, it is

useful to develop a job structure so that the relative worth of various jobs in the business

can be compared.

2. Fringe benefit: is a payment to an employee, but in a different form from salary or wages.

According to the fringe benefits tax (FBT) legislation, a fringe benefit is a benefit provided in

respect of employment. This effectively means a benefit provided to somebody because they

are an employee.

The term fringe benefit has broad meanings for FBT purposes. For example, a fringe benefit

may be provided when an employer:

• allows an employee to use a work car for private purposes

• gives an employee a cheap loan

• pays an employee’s gym membership

• provides entertainment by way of free tickets to concerts

• reimburses an expense incurred by an employee, such as school fees

• gives benefits under a salary sacrifice arrangement with an employee.

Non-financial rewards and recognition

1. Non financial rewards may include recognition, higher status, positive feedback, more

responsibility and greater participation.

2. Recognition is an important non-financial reward which is particularly valued by some

employees. Having efforts noticed and valued can be a great motivator and encourage

employees to stay with an employer.

3. Other rewards

Other rewards shouldn’t be seen as a substitute for a good pay scheme. They can, however,

motivate employees and encourage them to stay with your organisation.

Other types of rewards include:

• extra leave

• Christmas and birthday gifts

• work-life balance benefits such as flexible working hours

• subsidised staff canteens and free tea/coffee

• cinema tickets, subsidised gym or sporting facilities membership

• training addressing personal development rather than simply the skills needed for the job

• gifts for work well done

• subsidised goods or services in relation to suppliers or business networks.

VI. Summary

Organization grows as the performance of the organization improves. It is why, it is

important to develop and see the performance of people within it as well as the organization

itself. This topic talks about how to understand the different factors in the organization as well

as give an idea how to determine the performance of the organization.

As performance measurement give us idea on what does the current accomplishment of

the organization towards in goals it also helps us to identify opportunities for improvement and
make way for us on comparing the external and the internal standard of the organization.

Performance Review on the other hand let us determine the performance of the individuals or

employees in the organization it give us a data on how to improve the effectiveness and the

efficient of the workers. Rewarding performance make sure that the individuals in the

organization is well compensated and paid accordingly. As well as recognized if they excel in

their filed or job.

VII. Conclusion

Getting organizational performance had many factors to be consider. All different field in

the organization the operation, manpower and the policy regarding to the rewards and incentives

of the worker. It is really important to know how to measure all of this performance measure to

make sure that the organization and the manager can make or provide a more effective system

regarding to what was really needed. On the other hand organization that doesn’t pay importance

to this measure may suffer or may close down due to late actions of the management because

of not knowing the current performance of people and the organization itself.

REFERENCE
www.dti.gov.uk/quality/performance
http://www.educationresourcestrategies.org/webtools.htm
PDFhttps://www.business.tas.gov.au › pdf_file
https://hr.utk.edu/performance-evaluation/
https://en.m.wikipedia.org/wiki/Performance_appraisal
QUESTIONS:

Enumeration.

1-3 What are the three main methods used to collect performance appraisal (PA) data?

1. Objective Production

2. Personnel

3. Judgemental Evaluation

4-5 Methods of Performance Measurement

4. Traditional Performance Measurement:

5. Balanced Scorecard Method:

6-7 Types of financial rewards

6. Remuneration

7. Fringe Benefits

8-12 Factors to consider in developing pay levels.

8. Employer-driven (or product-market) competition

9. Employee-driven (or labour-market) competition

10. Deciding what to pay.

11. Market pay surveys.

12. Developing a job structure.

QUESTIONS:

Enumeration.

1-3 What are the three main methods used to collect performance appraisal (PA) data?

1. _________________

2. _________________

3. _________________

4-5 Methods of Performance Measurement

4. _________________

5. _________________

6-7 Types of financial rewards

6. _________________

7. _________________

8-12 Factors to consider in developing pay levels.

8. _________________

9. _________________

10. _________________

11. _________________

12. _________________