Performance and Compensation Management
Over the years, World Bank has been termed to be one of the most competent organizations all over the world. It can be viewed as a cooperative with up to 189 countries members. These stakeholders are then represented by a Board of Governors who happens to be the crucial legislators. Normally, the members of the board are countries’ ministers of development or finance. Usually, it is the role of the governors to assign precise obligations to 25 Executive Directors within the organization. This group’s primary objective is to finance developments that improve the economy of the member states. The bank can be termed as the largest financial source for the developing countries and providing policy guidance and administers on behalf of international creditors.
At the moment, most organizations are confronted with innovative, competitive conditions, and for them to survive in the market and improve their efficiency and productivity, performance management has been conveyed to the middle stage. This is a procedure whereby managers and staffs work together to design, observe and review organizations objectives and overall contribution of the employees. It is an unceasing process of defining aims, evaluating the team's progress and giving on-going training and advice to guarantee that the staff is meeting their intentions and occupation goals (Kyndt, et al., 2013, p. 320).
At World Bank, one of the performance management issues is to address any performance deficit by an employee or a department that is working on their capabilities. The performance issue will have the direct impact on the individual and organization (Arthur 2008, p.680). In most cases, the productivity of the company will be affected thus changing the overall failure of the structure and thus leading to team’s failure. The fundamental role of the Performance management is to encourage and mend employee effectiveness. According to (Austin, 2006, p.192), performance management has been found to be one of the most dangerous yet disconcerting areas of HRM due to its high expectations that are always devastated by the actuality of difficulties and conflicts experienced as compared to the positive results expected.
Compensation management, on the other hand, is a discipline which involves substantial human capital cost (Hosainn & Rahman 2016, p.204). The management is significant for the attraction, preservation and inspiration of the organization vision and motive. A mutual acceptance by many organizations is that employee’s compensation gratification is in the amount received; the higher the number received the finer the satisfaction. However, this is not always the case. Indeed, the amount paid to employees matters less compared to equity among all the staff within the organization. According to Hosainn & Rahman( 2016, p. 206), the danger behind the perception of internal equity among the employees is that if workers believe that they are poorly paid they will respond by revising their efforts towards the organization goal and the duties delegated to them. In return, this fallout leads to increased cases of lateness, absenteeism, and unmet deadlines among others. The final purpose of this management is to offer adequate money to stimulate the anticipated result without paying the excess or motivate wrong results.
On analyzing the performance management at World Bank, the issue of addressing performing employees or department has a significant impact on determining the organization's failure or success as indicated by Bushnell & Stone (2014, p.119). Besides leading to team’s failure, the individual will have no chance to develop on their performances and the quality of work will be conceded. As per my observation, the organization is rating employee’s performance by the company’s goals that are stipulated at the beginning of the year, having in mind that in the current world, market subtleties can change anytime. For example, if the organization has set goals and a competitor just emerges or even the technology changes, it will be evident that the results will be different from the set goals Bushnell & Stone (2014, p.120). To my view, as most of the software industries are doing, if an organization's goal bend, the goals of the individual employee should also change as described by (Dehmlow, 2016, p. 4). The employee will not feel marginalized or wasted, and this will improve his/her work output. In addition to that, there are instances when people within the organization wait too long to give feedback on employees performance, which may have a downside. Failure of employees to address performance as they occur, poor performances, for instance, may never be rectified due to the assumptions made that they are fine as indicated by Dehmlow (2016, p. 6). Continuous feedback would act to everyone's advantage starting from the organization to the individual employee.
Another finding is that ranking and rating of the employees reduces the engagement between them and demotivates them. Basing my argument on neuroscience, using figures to rate one's performance could create a sensation that ruins the conversation (Dehaene 2011, p.113). For example, if an employee is ranked with a nine on a scale say (1-10), the employee would not take any advice from someone ranked lower than him or her due to the belief that he or she is the best in the company thus ruining the teamwork motto within the organization.
Kyndt et al. (2013, p. 330) reckon that old-style reviews also do not develop employee’s skills as per the observation. They note that there was a particular scenario whereby the employees could not improve their abilities and performance. In their observation, they highlight that a manager was holding the feedback to wait for the annual general meeting to raise the issues. This is a total waste of time for every individual employee dwelling on the past instead on investing in the future expansion. Though this kind of strategy was working decades ago, in the present era, it is not working. As a matter of fact, experts are encouraging the identification of top talent employees and then watch them carefully to avoid poaching by the competitors.
Individual factors such as family difficulties or marital difficulties are other issues that might affect the employee’s ability to produce quality work. Such cases mostly happen when a person is employed out of acquiring certain favors (McCaffery 2006, p.630), and it ends up that he/she is not competent enough for the job. It is therefore always greatest practice to make labor laws accommodate the workers in both the short and long term. To have a better productivity at World Bank is analyzing and defining employee’s performance. Performance is always portrayed as anticipated results or traits or even the outcome of what is accomplished.
When an organization shows interest in the well-being of the employee, the employee can feel the sense of belonging to a company. When this happens, an employee can disclose a lot his/ her employer, including personal matters that hinder productivity. When an employee is guaranteed privacy as far as information disclosed to the employer is concerned and understanding, the odds are that the employee would gradually develop loyalty towards the organization. Companies can determine ways of improving employee productivity and in this case, training comes in handy. When an employee does not live to the end of their bargain as far as productivity is concerned, written consequences can be arrived at, as noted by Groen, Wouter, and Wilderom (2012, p.138). When the employer and the employee establish an understanding between themselves, an improvement in productivity would be noted in the employee and this, upon transferring to the organization as a whole, organizational performance is bound to improve and go a notch higher.
Kyndt et al., (2013 p. 325) observed in a health organization in the United States that there were two important methods that they use before delegating any duty to employees; one of them is classification. This is where they assess the employee's performance in the past experiences and use those facts to support their decision on the best sector or department to place the individual and also determine their promotions and job projects. The second method in that organization is development; in this approach, the employee performance in providing feedback and training that will upsurge employee appointment and vocation growth as indicated by Branham (2005, p. 4). Both categories involve evaluating before delegating duties to employees.
Another recommendation is the provision of feedback on employee's performance. This is because feedback provision plays a significant role in motivating and providing relevant information that pertains to organizations goals and expectations. It should also assist in self-management of employees since it keeps work activities focused towards anticipated goals and career patterns of the organization and as an individual. From above information, it is evident that the management system has three primary elements namely assessment, setting goals and response to the performance (Melnyk, Sroufe, & Calantone, 2003, p.332). These items must be treated with the seriousness they deserve and with lots of attentions by the managers of the organization to maximize the performance of management systems. Also holding the rating committee accountable for their assessment and placing a price upon every accurate rating should improve correct and fair assessment among the employees. Indeed helpful and active feedback creates circumstances that inspire an employee to find their track.
As different organizations continue facing competitive weight, they are looking for ways to do more with the less available resources. To achieve more with rarer employees, it calls for real management of human resource available. To enhance even much better performance and productivity within the organization, compensation of employees for their services is an imperative element towards teams’ success. Good wages and benefits must be offered to every employee to entice and maintain competent employees within the organization. However, compensation among different employees will vary depending upon their skills and capabilities as recorded by Melnyk, Sroufe, & Calantone (2003, p.340). Moreover, certain factors must be considered to compensate employees. Factors such as job evaluation, qualification and expertise are much considered to arriving on whether or not to make up for the employee.
Within World Bank organization, there are two, major branches that determine compensation rights; External factor and internal factors (Bantel & Jackson, 2007, p.112). Some of the external factors that are being considered include the demand and supply labor. Wages are a form of compensation for services offered by employees. The organization success is wholly dependent on those services and thus it must pay a reasonable price that will bring the supply well-ordered by individual employees or group of people through their unions. The primary result of the process of the law of supply and demand is the wage amount. The organization has drawn, theoretically, a separate curve for each job present. In a way, this has created a distinction between employees since some are made to feel inferior and not competent enough to achieving organizations goals.
Another finding within the organization is that at some level, they are considering the cost of living. Depending on the economic changes experienced in the United States, World Bank tends to vary monetary wages depending on the rise or fall in the general price of goods to the consumer. This is an essential and reliable ingredient for those working for a long term period or contract (Melnyk, Sroufe, & Calantone 2003, p. 342). However, its shortcoming is that employers will tend to feel deprived their rights whenever they get paid less than what they paid when the economy has risen.
It is also evident that labor Union plays a significant role to guarantee that employees get better wages than those employees that are in an unorganized organization. Higher wages must be paid to the employees by the firm due to the pressure from the trade union. I confirmed this after comparing several institutions whose employees were not under any union and compared it to wages being paid to employees at World Bank which is under a union. The result of the two kinds of workers is entirely different since it is evident that those paid high wages can produce more quality work than them who are paid peanuts (Branham 2005, p. 6). These organizations that pay well also tend to maintain their competent employees and also attract others from other agencies.
There are other components of compensations within World Bank organization such as incentives apart from wages and salaries. These are additional special payments called "payment by results." These fees depend on upon efficiency, returns obtained and cost reduction efforts. The organization goes a step further to share its exceeding profit with its employees (Dehaene 2011, p. 128). The sharing of profits motivates the employees to keep on doing their best to maximize the profit and minimize expenses since they will also be beneficiaries apart from their basic salaries. Normally, there are two types of incentives, that of an individual and also as a group. In World Bank, it is possible for one to acquire the two categories of incentives. The incentives enhance and motivate teamwork as well as individual goals.
In addition to those listed, employees in World Bank organization were offered bonuses which were paid by different means. One of the ways was a fixed fraction of basic salary and paid yearly or else paid in proportion to the profit made. A bonus plan was also developed that compensates the managerial team and the rest of employees by the productivity of labor, and the profit margin achieved (Wouter & Wilderom 2012, p.150). From the findings above, it is evident that some of the primary objectives of compensation management are to inaugurate a just and equitable payment. For the compensation management to be effective, it should maintain both the interior and exterior payment to employees. Internal equity means that employees are paid the same if they perform same work, and the difference in compensation should correlate to different job proportions (Wouter & Wilderom 2012, p.150).
Other objectives would include improving output, retaining competent employees and improving Union-Management Relations. However, with those few compensations, the organization cannot obtain its maximum goal in motivating its employee and getting to quality work, I would recommend that the organization invest in other dimensions of compensation such as introducing non-monetary benefits. These are benefits that offer psychological gratification to an employee in case there is no monetary appreciation or even on top of the financial recognition. Such benefits would be in the form offering certificates, promoting them to another level and even offering comfortable working conditions (Wouter & Wilderom 2012, p. 150). In a big way, the employee will feel trusted and will do his or her best to maintain the confidence of the employer (Branham, 2005, p. 7). The benefits offered to the employees result in quality and efficient work. Also having mixed plans for employees would act as a stimulator towards their achievements in mixed schemes. The mixed scheme is a program whereby, separately from the wages, workers may be entitled to a fixed fraction commission upon achieving a certain set target of performance that yield to extemporary results as indicated by Arthur (2011, p. 640). Therefore, the additional commission is also a variable section compensation.
Moreover, the organization should consider offering non-cash Fringe benefits and including them in their gross earnings. Such benefits could include the use of company cars for the personal beneficiary and also free airline flights. The organization should cater for any expenses that an employee incurs in the line of duty. In so doing, the organization will have a good image to the corporate world and the immediate society and thus increasing its chances of attracting more members. In addition to that, the institute should consider offering “Sick Pay”; this is the money offered to an employee in case of sickness or injury. The payment is paid by insurance companies and is referenced as the third party payments (Bernardin & Wiatrowski 2013, p. 174.). Such compensations will ensure employees safety, and thus they will be able to work with no fears whenever exposed to the challenging situation at job places, besides increasing their self-confidence and giving them a piece of mind since it will relieve them from certain fears.
Compensation management, if done in the right manner has the potential of taking an organization to the next level. Organizations have been noted to grow with the incorporation of compensation schemes that are worthwhile. Compensation management explains the reason as to why companies have long serving employees who are noted to be valuable assets in the given organizations while high turnover rates mar other agencies (Bantel & Jackson, 2007, p 115). The phenomenon gives meaning as well as to why such organizations seem to attract new and upcoming employees who are out to establish their careers.
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