The concept of the essays are problems with contingent pay plans and challenges of team performance management. (full descriptions attached)See (essay) attachment and provide a separate response to al
Essay 1
My company deals in private equity, we are a global company with investments in all sectors. While I am in support role, there are others whose job is to bring in potential companies for us to invest in and make money. Employees in support roles are paid on a traditional pay plan as indicated by job description (Assistants, HR, IT, Compliance, Legal and Accounting). The remainder of the staff, the money makers, (Business Units (BU’s), Deal Teams, Top Management, CEO’s) are on a contingent pay plan, specifically profit sharing.
This difference in pay plans has caused some issues. Looking at this situation first from the perspective of problems with contingent pay plans leads to creating questions with these concept elements. 1. Are managers at TPG being held accountable regarding how they handel the performance evaluation of their employees? The is answer is no, employees are setting goals in our performance management system, Reflektive, that are easy to achieve, and most managers don’t care to even review these goals. Mind you we all have access to view each other’s goals at all levels, of those who have even bothered to put in goals, most are easy to achieve or super vague. I am embarrassed to say that I myself have set some pretty easy goals in order to receive a good performance review. 2. Are rewards for executives proportionate compared to rewards for everyone else? Excuse my language, but f&*k no they are not! I am not even on a contingent pay plan and the disproportion upsets me. Members of the deal team and BU’s work incredibly hard to find companies, do their research in the field, bring in the companies, and work with them to get value and performance up. Their bonus is tied directly to the success or failure of those companies. Once a company does well and gets sold off, BU’s get between a 2%-3% cut, the CEO’s and top Management get the rest. Morale is a serious issue within the BU’s and Deal Teams.
My recommendation on the accountability issue would be 1. train the managers on effective goal writing, since would help them identify poorly written goals and could give managers the tools to help the staff with this deficiency. 2. Using the completion of goals as a measurement of performance is not necessarily a bad idea, but the goals must be well written, actionable and in line with the organization. To be honest, when it comes to the disproportional rewards between the BU’s and top management, I would think the fix is simple: give them a bigger cut. I know how hard those teams work: stress filled days with basically no work-life balance. The burn out is very real in those positions, and as the Avon CEO was famously quoted, “People don’t do what you ask them to do; they do what you pay them to do.” Based our text a meaningful bump from 2%-3% to 12%-15% would make all the difference.
The second concept of challenges of team performance management is something that my organization really struggles with. There has been a big push towards the “team arraignment/mindset” in hopes of promoting the team culture further they are even renovating floor by floor, getting rid of offices and cubicles for one giant open concept. What my company hasn’t renovated is the performance management system to accommodate this new ‘team concept’. My organization is clearly vested in making the team structure work, as they should since we have investments in companies worldwide, which require teams with members from different parts of the world. The question then is: how can my organization best shift from an individual to a mixed or team-based performance management system? While my organization has good grasp on what the mission is. They have not done their due diligence when it comes to job knowledge. (Which is evident now in existing system).
My recommendation would be to first conduct a thorough job analysis of existing positions and corresponding KSAs. The next step would be to figure out exactly what they want each team to do to fill the team with the correct people.
Essay 2
Contingent pay plans have both strengths and weaknesses. There is a great deal of security in knowing exactly when you will get a raise and what that raise may be. I have had a contingent pay plan in place at nearly every place I have worked. At a place that has a strong union in place it is common for your pay to be directly tied to the amount of time you have been working at the organization. The military also has a variant of this in place. While all members of the same rank and time in service will be paid the same amount the progression of the member is determined by the member’s performance and their ability to prove their proficiency through various forms of testing. Our technician workforce is clearly operating under a contingent pay plan.
Within the text there are 6 proposed problems associated with contingent pay plans:
A poor performance management system is in place
There is folly rewarding A while hoping for B
Rewards are not considered significant
Managers are not held accountable
There exists extrinsic motivation at the expense of intrinsic motivation
Rewards for senior executives are disproportionately large compared to rewards for everyone else
In my organization we have had ongoing issues with managers not being held accountable for overly inflating the evaluations which has led to a devaluation of the intent of the reward itself. One section might give across the board time-off awards or on the spot cash awards while other supervisors are much more judicious in their approach. This has led to animosity across the organization that may only be quelled by holding the supervisor’s feet to the fire in hope they begin to appropriatelyreward members of their team. We also experience times when the goals by which members are rated and rewarded are not lined up with the stated goals of leadership. It is the supervisor/managers job to ensure organizational goals are synched with individual goals and that the rewards are there to affirm performance in accordance with those stated goals.
Most of my organization is broken up into flights and sections. Within these smaller group’s individual rewards are not tied to team performance but still rely on individual performance. In many cases these goals have not been re-vectored when team goals and the goals of the organization shift. This creates a system in which many employees are driven solely to achieve their reward and not for the overall good of the organization. It is critical that the method that members of the team are rated include a team-based measure such as communication, decision making, team leadership, and self-control. Once these are present and in line with the stated goals of the organization, I believe we would see an increase in the overall functioning of the teams within my organization
Essay 3
Performance management involves understanding the resources that are to be managed and what motivates each of them. Organizations use different motivational tools like offering rewards and creating challenging tasks. Currently, my employer is carrying out performance management by creating specialized tasks to teams. Performance management is about building the knowledge, skills, and abilities of people (Hearn, 2017). However, the management is worried about t the performance of the teams that will not make it because workers are likely to be demotivated and the production declines. To keep the entire teams motivated, the organization is devising means of rewarding all teams but with different pay.
The problems of the contingent pay plans and the challenges of team performance management are interrelated in the sense that if the plan is designed within a form, whether it leads to the success or not the employees will adopt the activities and behavior and all it takes to earn rewards. With team performance, it becomes challenging if the work is done in the team and rewards are given to individuals (Heathfield, 2018). It is difficult to determine who contributed much to the accomplishment of the tasks. Bias becomes inevitable in the organization and workers are demotivated in the process. The two concepts are interrelated as they all result in demotivation of workers and failure to achieve success. Therefore, for the company to manage the performance, the generally accepted standards for measuring performance are to be put in place. Performance management is not annual review meetings (Heathfiield,2018). With such a measure, workers are weighed using the same criteria and bias will be reduced. It creates competition among the workers, and the organizational goals are achieved. With the company’s situation, it must adopt the benchmarking of all the employees on the same standards.
If this company is to manage the performance potential, the employees must be evaluated on the same standards and rewards given when it is due.
