PerformanceManagement and Employee Incentive Programs
PerformanceManagement and Employee Incentive Programs
WeaveTech,formerly known as Johnson-Ware, is a private equity clothing companythat manufactures jackets, coats, coveralls, overalls, and fireresistant clothing. It is situated in Gloversville, New York.Currently, 25% of its sales goes to military personally and the restto the civilian population. Employeesknow that they are appreciated when they feel comfortable working intheir corporate environment. The way employees behave around theirsuperiors and managers is determined by their attitude towards theirjobs and ultimately their performance at work.
Manyemployers tend to think that huge salaries retain quality employees.However, researchers conclude that factors such as good relationshipswith employees among other factors play a huge role in retainingemployees. Thepurpose of this paper is to analyze WeaveTech and develop a strategicworkforce plan that considers factors such as business metrics,workforce plan, organizational operations, and federal laws andregulations.The paper explains the factors that employers should consider increating a good relationship with their employees.
Strategicand Workforce Plan:BusinessMetrics
Thekey focus of WeaveTech to develop a three-year human resource plan togauge its performance based on its goals. Its short-term goal is toeliminate workforce and at the same time maintain steady sales. Thelong-term goal is to have a solid financial ground, satisfy itscustomers, and have committed employees. WeaveTech should adopt keyperformance indicators and scorecards as business metrics to measurethe achievement of its strategic goals and objectives.
Thebalanced scorecard will assist the company to map its strategic goalsinto four performance metrics namely financial performance,customers, internal processes, and learning and growth. Accordingly,it will give appropriate feedback on how the plan is executing, aswell as show when adjustments are necessary. Besides, it will help tomeasures the current performance of the company in financial termsand evaluates the future improvement. According to Kaplan and Norton(2016), “scorecard” means that quantified measure of performancewhile “balanced,” means that a balanced system between internaland external performance, leading and lagging indicators, financialand non-financial measures, and long- and short-term objectivesperspectives. If WeaveTech adopts the use of the balanced scorecard,it will benefit by translating strategies into measurable parameters,communicating its plans to all employees, aligning individual goalswith organizational strategic objectives, and implementing feedbackinto the strategic planning process.
Besides,the company should adopt performance indicators to give an insight onhow a particular department is performing in relative to thestrategic goals. For instance, the company needs to increase itssales in the future. It should come up and implement new designs thathave not been utilized in the hosiery and clothing industry. Forexample, it can incorporate weather sensitive clothing and 3D shirtsand outfits that have attained high demand in the current market. Thetechnological team should design new technology that will attract newcustomers to purchase their products, which in return will enhanceprofitability.
Strategicand Workforce Plan:WorkforcePlan
WeaveTechis changing its strategic goal from a military-focused customer baseto attain high-end performance in the clothing market. Therefore, itshould come up with workforce plan to fit in the rapidly developingmarket (Manson, 2014). To do so, the CEO should consider sourcing,recruitment, hiring, orientation, talent management, successionplanning, retention, and organizational exit strategies. Undeniably,the company requires people with diverse skills to achieve this goal.There are two choices involved it may decide to retain the workforceand train them or hire new people with the required skills. This is adecision they should take before laying off and replacing 20% of itsemployees.
Firstly,it the CEO decides to lay off some employees, he will have to offerthem voluntary retirement and severance packages, and othercompensations, which might accumulate a huge amount of money. Inaddition, the moral and intrinsic motivation of other remainingemployees will go down, which will ultimately affect theirproductivity and working atmosphere (Manson, 2014). The company willalso contradict its mission statement, and it will lose the trust ofits staffs. Besides, their employees are competitive and highlytalented hence, firing them they will lose their past effort, time,and money they used to hire and train them. This will likewise havean adverse impact in the future where talented people will not beinterested in joining them.
Accordingto Manson (2014), downsizing workforce negatively affects thesurviving staffs by reducing their loyalty, commitment, andattachment to management. On the other hand, employing new employeeswill also be costly. This is because they also need training aboutWeaveTech Company, its goals, and objectives. Therefore, it is notnecessary for the company to replace managerial staff as a newstrategic direction. The current staffs understand the experience ofthe organization hence, they are the best people to restructure thecompany. Likewise, it is an incredible idea to fire experiencedmanagers and replace them with those with no experience.
Strategicand Workforce Plan:OrganizationalOperations
Oneof the main internal factors that support the proposed plan is thestrength of the employees. WeaveTech staffs are talented,hardworking, and motivated. If they are retained, they are likely toproduce better result rather than hiring less skilled workforce(Manson, 2014). Furthermore, they all collaborate on ideas andresolutions. Besides, the company has heavily invested in them. Forinstance, when it introduced Sale Force for its customer-relationshipmanagement (CRM) infrastructure, it trained all employees.
Currently,they have mastered the program. This means it will be costly to hirenew employees. On the other hand, the main external factor thatsupports the proposed plan is the market (customers). According toHitt, Ireland, and Hoskisson (2016), the business competition alwayschanges in the external market. Therefore, if WeaveTech decides tofire 20% of its workforce, competitors will take the advantage andchange their marketing strategies and price of products in theirfavor. Indeed, this is likely to affect WeaveTech negatively. Inaddition, customers will lose their trust in them and might not buytheir products anymore.
Strategicand Workforce Plan:FederalLaws and Regulations
Accordingto federal law and regulation, the Equal Employment OpportunityCommission (EEOC) Act protects all employees from illegaldiscrimination such as gender, race or age. It prohibitsdiscrimination in employment aspects including hiring and firing. Theagencies ensure people are protected regardless of theirdisabilities, religious beliefs among other differences. Sexualharassment is a topic that has received less attention despiteincreased incidences. Besides, the Workforce Planning and Employment(WPE) ensure integrated and efficient hiring and firing that supportthe strategic objectives of the organization. In this context,WeaveTech has the right people with the right skills, abilities, andbehavioral characteristics to attain its objectives and support itsmission. Hence, by firing them, the company will be violating federallaw and regulations.
PerformanceManagement & Total Rewards: PerformanceManagement
Employeesknow that they are appreciated when they feel comfortable working intheir corporate environment. The way employees behave around theirsuperiors and managers determine their attitude towards their jobsand ultimately their performance at work. Many employers tend tothink that huge salaries are the way of retaining quality employees.However, researchers conclude that factors such as good relationshipswith employees among other factors play a huge role in retainingemployees. This section explains the factors that employers shouldconsider in creating a good relationship with their employees.
Performancemanagement is a method of keeping or increasing the performance ofemployees by ways of evaluation tools such as training, counselingand providing ways of feedback. Performance management processenables employees to attain their objectives.
Oneof the co-values of WeavTech is full customer satisfaction. Theemployees live in an environment where customers are treated asbusiness associates. The company has also intensified their productsbased on the size of the market. WeaveTech has shifted from majoringin military clothing to casual wears where the market is large.
Therehave been two management methods that have been developed, that isperformance-based pay and total quality management. Performance-basedpay is designed to pay their employees according to their directinput towards the performance of the company. The pay is given in twoforms, salary based and bonuses given quarterly based on unitsproduced. The performance-based method is important in improving theeffectiveness of the employees and also improves their attitudetowards their jobs. The method is also effective in reducingabsenteeism at the workplace, therefore, keeping the employeescompetitive.
Totalquality management is mainly customer focused and driven by datacollection method to engage all employees in a systematic improvement(Sumelius et. al, 2014).
Besides,the company should adopt performance indicators to give an insight onhow a particular department is performing in relation to thestrategic goals. For instance, the company needs to increase itssales in the future. It should come up and implement new designs thathave not been utilized in the hosiery and clothing industry. Forexample, it can incorporate weather sensitive clothing and 3D shirtsand outfits that have attained high demand in the current market.
PerformanceManagement & Total Rewards: FederalLaws & Regulations
Inaccordance with federal laws and regulations, the Equal EmploymentOpportunity
Commission(EEOC) Act defends all the employees. It prevents any form ofdiscrimination in employment processes especially in the recruitmentof employees. The Workforce Planning and Employment (WPE) is involvedin recruitments and termination exercises. WeaveTech is a largecompany with a wide variety of skilled employees committed to thevision and mission of the company. In this regard, the company wouldhave no right in the illegal dismissal of workers(Sumelius, et. al, 2014).
PerformanceManagement & Total Rewards: Individualand Organizational Needs
Thecompany continues to support its organizational needs through takingcare of its employees by use of performance-based pay where theemployees work competitively. This helps the company in theproduction of quality products to their customers and thereforewidening its customer base through customer loyalty.
Theemployees also benefit regarding better wages and improved standardsof living. Each employee works hard to be awarded more bonuses. It isalso effective in rewarding those who put more effort than others,therefore, creating fairness in the company.
Allthese efforts go a long way in achieving the vision of the company(Sumelius, et. al, 2014).
PerformanceManagement & Total Rewards: PerformanceAppraisal Methods
By2012, the yearly compensation per employee was $40,020 compared to$25,930 in the early years (Niehaus,2013).This was due to the strategic plans adopted especially,performance-based pay method. This is a good incentive to hardworking employees. The company`s approach to the performance-basedmethod has been categorized into three beliefs, that is, fix thesystem, hire the right people and fire as fast as possible. Thismeans that the company believes that the system that the employeesinteract with contributes to 90% of their performance. Secondly,hiring the right people can only be good for the company. Employeesthat are poorly hired are fired as soon as they are discoveredalthough this happens seldom. The company expects all employees tocontribute to the growth of the company(Niehaus,2013).
Theemployees at WeaveTech have been highly trained especially in thedepartment of sales which is one of the most important departments inany company. Their managers are also highly skilled with some of thembeing holders of advanced degrees. A firm was also hired to implementa managerial performance appraisal system to improve the managerialskills and assist managers` relationships with their subordinates.The system was also used to determine the salaries of the managers.This system has proved to be quite useful in raising the managerialstandards(Sumelius, et. al, 2014).
PerformanceManagement & Total Rewards: TotalRewards
Inyear 2000, the model was first introduced aiming to attract, motivateengage and retain employees. This is done through compensation,benefits, recognition, performance management, talent development andwork-life effectiveness. Employees at WeaveTech have been providedwith all these elements. The employees are given skills for theirlong term and short term careers. WeaveTech staffs are talented,hardworking, and motivated. If they are retained, they are likely toproduce better result rather than hiring less skilled workforce(Manson, 2014).
Furthermore,they all collaborate on ideas and resolutions. Besides, the companyhas heavily invested in them. For instance, when it introduced SalesForce for its customer-relationship management (CRM) infrastructure,it trained all employees. Currently, they have mastered the program.This means it will be costly to hire new employees. The organizationhas also encouraged both team and individual efforts that are wellcompensated for.
PerformanceManagement & Total Rewards: Compensationand Benefits
Successof an entrepreneur is not only measured by revenue and profitsgenerated but also the impact of the entrepreneur to employees lives.Rather than dwelling on tangible rewards such as pay, services suchas mentoring, a business owner can shape worker’s life by providinga generous package in terms of take-away benefits. Most entrepreneursacknowledge the impact they make to employees’ life throughgenerous packages which in return motivates the workers to go anextra mile in realizing the company’s goals. A business thatcontinuously offers good benefits finds it easier to hire talentedemployees and will realize the positive effects in terms of marketingand sales.
Withinorganization, job evaluation process assesses relative worthiness ofjob positions. To determine employer’s value, job’s content andprovide ranking of jobs can be done by a comprehensive analysis ofeach position’s skill requirements, responsibilities, tasks andknowledge. Such analysis can be used to effectively design jobs andprovide value of positions as well as a point of reference in hiringand job promotion. Job evaluation should be conducted aftercompleting job analysis and before coming up with a compensationscheme.
Compensationincludes awarding the employees for services offered regardingskills, effort and time. Benefits include income protection, savings,and retirement strategies which provide for security to the employeestogether with their families (Buckingham & Goodall, 2015). Thecompany can adopt the pay for performance program, whereby anemployee is paid depending on how they meet company’s goals. Thiskind of payment program requires the managers to outline expectationsfor the employees apparently. Pay for performance will motivate theemployees to be competitive and the hence high productivity in thecompany.
PerformanceManagement & Total Rewards: Communication Strategy
Communicationbetween employees and managerial staff is vital in success of everyorganization. Following advancement in technology, most communicationand operations has shifted to online self-service. Self-services hasseveral challenges among them, employees’ inaccessibility tocomputers at work or home. In such as case, the company should comeup with funding scheme to make sure all employees have access tocomputers. Loss of HR expertise in the specific area may also be aconcern. The company should offer training to the HR to help acquireonline skills to assist the employees when the need arises.
Employee& Labor Relations: ComplaintProcedure
WaveTech has a duty to treat all its employees without any discrimination and respect hence all they need is respect, courtesy and dignity.
All complaints regarding discrimination, sexual harassment, victimization will be handled in a systematic procedure, confidentially, investigated and recommendations established.
A complaint is made to any supervisor, manager, and human resource manager in WaveTech Company which does not have to be in writing (Wood, Saundry, & Latreille, 2014).
Complaints will be handled fairly where the victim is given a fair hearing and no victimization.
The person entitled with the complaint should be supporting any of the parties involved hence the parties involved are allowed to nominate a provision individual to be present.
Employee& Labor Relations: DisciplineProcess
The goal of the disciplinary procedure: WeaveTech goal is to ensure the conduct of the employees improves, thus it lays down the action that will follow when the rules of the firm are violated.
Principles: The workers are required to master the standard of conduct that they are expected to uphold, they will be given detail of any allegations, they are entitled to escorted by a trade unionist, no worker will be released for a first breach and workers have the right to appeal.
Informal discussions: Informal discussion will be considered first by the manager before any disciplinary action is taken (Elsner, et al., 2014).
Initial or formal verbal warning
Final written warning
Gross misconduct will lead to employees being released without being given any warning, but he or she will be paid as investigation continues.
Employees have the right to appeal
Employee& Labor Relations: ConflictResolution
Purpose: In case of misunderstandings in the workplace, it is the intention of WeaveTech to respond to the employees concerns based on the following procedure
Talks with the supervisor: The employees should forward their complaints to the supervisor and the supervisor will respond to the allegations by writing within six days.
In case the supervisor does not respond complaint satisfactorily, the worker should submit a written complaint to the director within five days after response from the supervisor (Saundry, McArdle, & Thomas, 2013).
A meeting scheduled by the director in which the complaint is heard in which the decision is made
An appeal may be submitted to the HR department if the employee is not satisfied with the decision.
RiskManagement and Organizational Change:Risks
TheWave Tech Company will potentially encounter state and federalemployment laws. This may arise if some employees feel discriminatedupon thus provoking them to seek legal protection from the federaland state laws regarding the rights of employees. Besides, tradeunions of the affected employees might seek legal intervention overbargaining obligations (Niehaus, 2013). When employees complain overpre-notifications requirements is another legal issue of concernlikely to occur during the process of downsizing at Wave TechCompany.
Otherlegal issues of concern include layoff selections issues, exitincentives provisions, and warn Act requirements. The company mustconduct layoff selection in a manner that is fair to all employeesbecause employees who might feel discriminated might opt to seeklegal intervention. Warn Act regarding the process of workeradjustment must be provided to the employees, their trade unionrepresentatives, and the officials of local government in a periodnot less than two months before the process of downsizing. Thecompany must be cautious during the whole process of downsizing asany action contrary to the law might adversely affect the company.
RiskManagement and Organizational Change: Employeeand Organizational Data
Thecompany must conduct a clear and appropriate bargaining withemployees’ unions regarding the process of employees’ layoff.Besides, warning of the workforce of the company about the issue ofreduction of workforce at an appropriate time as required by law isquite essential. In general, effective and careful planning,appropriate decision-making, communication, and documentation areessential for the Wave Tech company to navigate the legal issues ofconcern successfully.
Theorganization should protect employee and organizational data againstpotential legal liabilities by practicing proper documentation of thedata and keeping it secure from falling into the wrong hands. Propercommunication among the relevant stakeholders involved in the processof change should be encouraged. Appropriate communication during theprocess of organization change can serve to eliminate unnecessarylegal complaints that may arise from employees who might feeldiscriminated upon during the process.
RiskManagement and Organizational Change: Typesof Policies
Becauseof the legal requirements and the risks that may occur during theprocess of downsizing, the Wave Tech company should come up withappropriate mitigation policies for the risks. The company shoulddevelop strategies that can enhance a successful management changewithout legal obligations. Developing a plan is crucial in overseeinga successful process of downsizing (Niehaus, 2013). The company musthave a thoroughly documented process indicating that the companyacted legitimately and fairly. The company must also avoid all soughtof discrimination in conducting the process of reduction in force.The company must avoid unlawful discriminations such as gender, race,religion, disability, and pregnancy during the process of reductionin force. It is advisable for the company to utilize various levelsof decision making while carrying out initial decisions review withthe aim to make a comprehensive judgment regarding selectioncriteria.
RiskManagement and Organizational Change: DueDiligence Activities
Financial matters. The company must evaluate the historical financial statements. The Wave Tech company must analyze financial related metrics including the margins for business growth and deterioration. Financial metrics analysis helps in approximating the direction that the business might undertake the process of downsizing.
Understanding customers/ sales. Here the Wave Tech company will be required to understand the sales volume of the company as well as the concentration of customers to make the right judgment regarding selection during the process of reduction in force.
Understanding of the material contracts. As in merger and acquisition, the Wave Tech company management should evaluate the material contract regarding the agreements between the company owners. The legal agreements signed when the company was starting should be reviewed as it helps in making a judgment as to whether downsizing is acceptable or not.
Evaluation of employees/ management issues. The company management must fully analyze the management chart to (or "intending to") identifying the most necessary posts to conduct the downsizing process in a manner that will be less harmful to the company.
Antitrust and regulatory issues among the company employees must also be evaluated. The management should analyze cases of untrustworthiness among the employees as this might help in making selection during the layoff.
RiskManagement and Organizational Change: ChangeManagement
Changemanagement that would occur to the Wave Tech company after theprocess of Downsizing include the following:
Dampening of the company employees’ morale. The employees who lose their jobs loses morale as are discouraged by unemployment. These employees may later affect the company negatively when they start tainting the image of the company to potential customers by disclosing the secrets of the company. Such employees sometimes tend to start related businesses that act in direct competition with the organizations that they were working with before. This might rob the company some its potential customers. Also, the workers left in the company who might feel that their colleagues were mistreated, may develop mistrust issues with the company management, which also kills their morale. Such workers lose focus and concentration towards their work, and this normally lowers production (Saundry, McArdle, & Thomas, 2013).
After downsizing, workers are often left feeling uncomfortable, afraid or offended. They also develop fear and worry of what might happen during the next process of downsizing. This normally leads to stress development and increased conflicts among team members. The uneasiness that develops might even force some workers to leave the organization and seek for opportunities in other organization. This might cause the company to lose potential productive workers that it so much wished to retain.
Increased cost of training workers. After the process of downsizing, the company might be required to train workers to handle multiple tasks with the aim of trying to cover up the posts left during the layoff process. The employees might also become resistance to the process of training, and this is a major threat to the production process in the company. These issues have been addressed in details under milestone three.
RiskManagement and Organizational Change: ChangeModel
Thecompany should use John Kotter’s change model. The model is made ofeight steps that if thoroughly addressed during the process oforganization change, can lead to an effective process of change. Thesteps are inclusive of creating a sense of urgency. The management ofthe Wave Tech company must examine the possibility that change willimprove the competitive realities of the organization. The managementmust precisely explain to other members of staff that restructuringof the organization is that essential and shall be beneficial to thecompany (Niehaus, 2013). Building a guiding coalition is anotherstep. Leaders should form a group with the adequate power tospearhead the change. The collation must Form a vision strategy andtake necessary initiatives through mobilization the workers to takeproper actions.
Moresteps include enlisting a volunteer army that will help incommunicating the vision of change to the employees. Thecommunication should be simple for understanding to prevail.Additionally, the organization can enable action by barrier removal.This step involves dealing with obstacles that can block the processof change. It includes formal structures that make it hard foremployees to take action, lack of skills needed, information orpersonnel systems, and supervisors who might be interfering withchange implementation. The frim can also generate short-term wins.Opportunities that lead to short-term scores are more appealing.Other steps could include Sustaining acceleration and Institutingchange. The former involves using early achievements as a foundationfor greater challenges. This is the last stage, and it involvesanchoring innovative tactics to the culture to ensure successfulcontinuity of the adopted culture. The appropriate strategy fororganization change in the case of Wave Tech Company is downsizingthe company employees.
RiskManagement and Organizational Change: OrganizationalChange
Tosum up, we have noted that despite the successful implementation ofdownsizing, as a change initiative being difficult, the process canbe easily accelerated when conducted successfully. The method is alsocost effective compared to merger and acquisition methods oforganization change. This is because a large amount of money will berequired during merger and acquisition of processes as buying ofother organizations will be necessary. Besides, after merger andacquisition, the company will require spending more cash while doingemployees reduction and relocation. This makes merger and acquisitiona double task process of organization change.
Companiesshould detect new opportunities and challenges in the changingenvironment. In addition, they should get strategies to work on themfor their success. They should listen to their customers so that theycan appreciate their present and future needs. Besides, they shouldevaluate their strengths and weaknesses before venturing into a newterritory. For WeaveTech to implement a new strategic workforce plan,it should consider come up with strategies that align with itsmission, vision, and goals. Based on the above information, thecompany should retain its employees for the proposed plan to succeed.
Companiesshould ensure good customer relations with the company and even morewith the employees of the company who are responsible for handlingthe customers. Employees should be well compensated regarding extraeffort, and skills put directly towards the improvement of thecompany. They should listen to their customers so that they canappreciate their present and future needs. Besides, they shouldevaluate their strengths and weaknesses before venturing into a newterritory. For WeaveTech to implement a new strategic workforce plan,it should consider come up with strategies that align with itsmission, vision, and goals.
Buckingham,M., & Goodall, A. (2015). Reinventingperformance management.London:Pocket Books.
Elsner,P., Seyfarth, F., Sonsmann, F., John, S. M., Diepgen, T., &Schliemann, S. (2014). Development of a standardized procedure fortesting the efficacy of workplace cleansers. Contactdermatitis, 70(1),35-43.
Hitt,M. A., Ireland, R. D., & Hoskisson, R. E. (2016). StrategicManagement.Boston, MA: Cengage Learning.
Kaplan,R. & Norton, D. (2016). Strategic learning & the balancedscorecard. Strategy& Leadership,24(5),18-24. http://dx.doi.org/10.1108/eb054566
Manson,B. J. (2014). Downsizingissues: the impact on employee morale and productivity.Routledge.
Niehaus,R. J. (2013). Bottomline results from strategic human resource planning.New York: Springer Science & Business Media.
Saundry,R., McArdle, L., & Thomas, P. (2013). Reframing workplacerelations? Conflict resolution and mediation in a primary caretrust. Work,employment and society, 27(2),213-231.
Wood,S., Saundry, R., & Latreille, P. (2014). Analysis of the nature,extent and impact of grievance and disciplinary procedures andworkplace mediation using WERS2011. AcasResearch Papers, 10,14.