Ratings – Can be numbers or key words with definitions for performance only or for performance and development. e.g.
'); document.write ('Under performing - Meets no or only a few objectives and/or no or only a few of the appropriate competency levels.
'); document.write ('Achieving most - Achieves most of their objectives and/or most of the appropriate competency levels.
'); document.write ('Achieving all - Met ALL objectives and displayed the appropriate level of
');
document.write ('Behaviours in the competencies required.
Exceeding - Exceeded expectations in most of the objectives and displayed the appropriate level of behaviours in the competencies required.
'); document.write ('Outstanding – Excels at all levels of expectations including competencies and may be ready for promotion. This rating only applies to staff that are at least fully developed in the role.
'); document.write ('New – New to the role and at the beginning of their development
'); document.write ('Developing – Progressing in the role but not yet fully competent
'); document.write ('Fully Competent– Fully developed and meeting all requirements
'); document.write ('Advancing – Developed beyond requirements of the role
'); document.write ('Expert – Demonstrates mastery of the role
'); document.write ('Objective assessment - requires the manager to describe the colleague’s performance or contribution in his own words using tools as an aide.
'); document.write ('Generally, companies only implement that latter of these two options when they have been using a rating system for some time and their managers and employees are experienced in performance reviews. After a few years of assessment with ratings, the annual review becomes very emotional with all or most emphasis on the rating. This then detracts from the main focus of the review to provide feedback and concentrate on developing the employee to their full potential.
');
document.write ('
Many companies use statistical probability to establish whether or not their Performance Development System is being applied properly. In a sample of at least 125 employees, there should be a “normal distribution” around the rating “Achieving All” described above i.e. the statistical probability of what ratings employees should get is graphically represented by a bell curve, with most employees receiving achieving all and least employees receiving underperforming or outstanding.
'); document.write ('Some companies enforce this distribution by making managers rate staff accordingly despite team size. This obviously leads to a perfect normal distribution of ratings but results in some staff being over rated and some staff being under rated. Staff fairly quickly loose faith in this system as the ratings don’t truly reflect performance. If performance is not truly reflected how can Performance Pay truly reflect performance and how can it be fair?
'); document.write ('The best practice approach is to adopt a “grandfather system” to Performance Development and distribution of ratings. This means that when objectives are being set they are reviewed by the line manager’s manager. This ensures a consistent approach to performance planning and then before ratings are discussed with employees, proposed performance ratings are reviewed by the line manager’s manager. All ratings have to be justified and the grandfather can see whether a manager has been overly soft or overly harsh.
');
document.write ('
There are two ways of allocating the budget to managers or functions;
'); document.write ('The fairest and best practice way is to divide the budget up according to performance, so that the employees that are currently paid the least and are performing the best get the highest budget and those currently paid the most and are the poorest performers get the lowest budget.
'); document.write ('How much say should managers have in deciding how the performance pay budget should be split up amongst their staff?
'); document.write ('Amongst companies with a Performance Pay System, the degree of devolvement of pay decisions to managers usually is directly correlated with the number of years Performance Pay has been in place i.e. the amount of experience and understanding of the system the Managers have.
'); document.write ('Internal transfer and promotions guidelines
'); document.write ('To allow a flexible approach to setting salaries for employees who move internally or are promoted, it is proposed that the new salary should be set at least at the minimum of the pay range but can be much higher depending on experience.
'); document.write ('Six Month Reviews
'); document.write ('This is designed to ensure new colleagues who join GHA or those who are promoted or transferred internally are fairly rewarded for their contribution.
');
document.write ('A review of these colleagues will take place six months after they begin their new role. If they are performing at a higher level than the salary originally set for them then this can be reviewed at that time and any adjustments made.
');
document.write ('The costs for making these changes can be incorporated into the salary budget however will need to be agreed and managed by the budget holder.
Mid Year Reviews
'); document.write ('Mid year reviews fairly reward exceptional performers, high potential employees, and employees in key roles where retention issues might exist ensuring they continue to be both rewarded and motivated.
');
document.write ('Should a salary increase be warranted it could be made at this time. The costs for making these changes can be incorporated into the salary budget however will need to be agreed and managed by the budget holder.
Non-consolidated Awards
'); document.write ('In a Performance Pay system, some employees who are regularly performing as Outstanding or Exceeding receive no pay increase at the annual review because they sit at the top end of their pay range. Best practice dictates that these individuals receive non-consolidated awards (approx 5% of salary). These are one off payments not incorporated into basic pay.