Page: 1 2 3 4 5 6 7 8 9 10 11 12 13
A critical evaluation of performance management and development processes within Otis PLC
for on going review of performance, "one to one” reviews. The policy is that such reviews should be held by the first line manager with the individual and that a training needs analysis should be completed. In practice these reviews are not taking place, which reflects a general unwillingness on the part of first line managers to actively manage performance.
Reviews of performance do occur where an employee is seeking promotion to the next level in the grading structure. Entry to each level in the structure is based on achieving a defined level of performance, measured by specific outputs, and of competence which is expressed in terms of technical skills and knowledge. A formal application must be made for upgrading and documentary evidence provided; both of which are considered by a Progression Board who determine whether or not an application will succeed. Where an application does not succeed, specific advice, both in terms of inputs and outputs, will be given as to what the individual must do in order to be successful. Because of the formal and structured nature of the process, which is the product of trade union involvement, line managers are obliged to undertake reviews in order to provide the evidence required.
Performance rating linked to pay awards
The linkage between performance rating and pay is not straightforward. For field employees the only link is that with progression. In other respects field employees have a centrally negotiated contract of employment with fixed rates of pay. Staff employees are on individual contracts of employment, with individual pay rates set within a band determined through a job evaluation scheme. Part of their annual pay review is based on an assessment of their previous years’ performance but this rating is determined directly by their manager with no need to refer to their appraisal. In practice the relatively low pay increases of recent years, typically 3%, have meant that the amount of the increase reflecting performance has been limited with the result that managers have tended to give the average increase to most employees. Consequently the credibility of performance related pay has declined.
A small group of employees, managers and sales staff, receive specific performance related incentives ranging from 10% of base salary up to 30%. In the case of staff with clear output measures the incentives are directly connected to achievement of target.
Discussion of development needs
As noted above, and with the exception of new equipment sales staff, there are relatively few opportunities for staff to discuss development needs. It is more likely that where discussions do occur they will be focused on output rather than development issues. This, perhaps, reflects the culture of the organisation, which is short term, and reactive in nature and disinclined to undertake longer term planning.
Conclusions and recommendations for future performance management and development practice.
From my review I have drawn a number of conclusions. Firstly, Otis’ approach to performance management has significant shortcomings. It [next page]