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Analysis

Discuss about the Tesco Performance Management for Performance and Productivity.

In recent times, Human Resource Management has emerged as a critical business function. With time, organisation have realized the benefits that performance management system can have. Simply defined, Performance management is a process by which managers and employees work together to plan, monitor and review an employee's work objectives and overall contribution to the organisation. The objective of this report is to discuss the performance management system of Tesco. The company was established in 1919 and since then it has expanded in different parts of the world (Zhao, 2014). Tesco is the largest retailer in UK with a revenue of more than 60 billion pounds (Wrigley, 2014).

It is important that the organisations would be able to achieve a good growth rate only when there is a direct mapping between personal goals and objectives of employees and professional goals and objectives. The presence of a performance management system helps organisations to manage strategic and operational goals (Renwick, 2009). The performance management system for Tesco is a critical HRM function that helps the management to develop future growth strategy.

The performance management system for Tesco is a medium to ensure that the business goals are meet by the employees. It is a strategic tool for the company that helps it to focus on employees and organisation as a whole (Kourtit, 2013). The management of Tesco, as a whole, believes that a company might have a world-class performance management system in place, but the system is only as effective as the managers who implement it. Performance management for Tesco is an all-inclusive process which encompasses organisation’s strategic goal, and individuals and group’s performance and competencies objective (Rigby, 2015). Once these critical factors being defined, then the next procedure is how to be synchronized organisation’s goal into Human resource management where all the entitlement, rewards, and other criteria are embedded for the success of the organisations to achieve its goal. In the process of implementing performance management, one has to be seriously considered is an “integrated training facility” which provides essential training based on the employee’s status and responsibilities to attain the performance management goal. There are six components of performance management system for Tesco. These components can be discussed as:

The performance planning component that is the first step and most important component of performance management system

Performance appraisal and review that happens between managers and employees

Performance Management for Tesco

Feedback mechanism on the performance of employees. The feedback is provided by the managers and supervisors

Pay and Reward system component that focuses on performance linked plan, bonuses, annual compensation, rewards and perks, etc.

Performance improvement plans for employees that includes the need of training, coaching and mentoring.

Future or potential appraisal of employees that includes the promotion and future growth plan of employees.

The key driver of performance management system for Tesco is the need to synchronize the business goals with human resource goals. The management of Tesco realizes that employees are the greatest assets and they would be able to contribute towards organisational goals and objectives only when they can align their personal goals with organisational strategic goals. Aguinis, (2013) mention the importance of getting an effective PMS in place in order to improve the organisation and its business practice.  However, if not relevant and effective it may lead to poor performance instead.  The confusion of goals and targets and along with the lack of buy in from the employees can be more detrimental to the organisation in the long run. Sometimes, the support of top management of organisation for administration of performance management is often more necessary to implementing a successful PM system than well designed PM system without commitment with the leadership of the organisation (Houy, 2009). It has been noted that the top management involvement and strong support for PM system implementation goes a long way to affirm its usefulness to the organisation and determine its ultimate effectiveness. Without strong top management backing, the system, no matter how well designed, is doomed to fail. Serious commitment is required not lip service.

There are seven key features of the performance management system for Tesco. These key attributes or features can be discussed as:

Using annual goals setting. At Tesco, every employees has to discuss his yearly goals and the same are used to track the performance of employees. These goals are linked with the business strategy of Tesco.

Involve staff in the goals setting process to increase the ownership. The management of Tesco would develop the goals with the inputs collected from different employees.

High commitment, support and ownership from the top management, senior management, and line management. The ownership, support and commitment from the top management and senior leadership is be more than HR ownership (Saravanja, 2011).

Train the appraisee and appraiser on the PMS and appraisal system. Tesco has invested a lot on training and development programs for appraisee and appraiser. The focus on training and development programs has helped the company to have a standardize performance management system in place.

Drivers of performance management system

Appraisal meeting is separated than development discusses meeting and is done before the later.

The focus on availability of good managers with strong leadership mindsets. Tesco realizes that it must have leaders and not managers to focus on the path of sustainable development.

PMS is supported and integrated with other HR function such as training, development and rewards.

The impact of performance management system has been positive for Tesco. Often times, performance management system remains ineffectual and inefficient because it is be driven by Human Resources department responsibility and it is usually considered as a seasonal ritual of less importance to many managers who considers their core obligation in the company as top priority and rather result to abrasives filling of one directional forms with little or no feedback from other members of the teams or organisational. (Aguinis, 2013). However, this is not the case with Tesco. The performance management system has emerged as a critical business function for Tesco with high impact.

With established performance management system, the employees are able to work with high level of motivation and productivity. It has helped employees to define the goals and work to achieve these goals. The impact of performance management system is positive for organisation as well. Tesco has been able to manage its employees well with the established performance management system. It has helped Tesco to achieve its goals and objectives (Moore, 2013). It can be said that both organisation and employees has positive vibes for performance management system and it is expected that this impact would remain positive for Tesco and its employees.

One of the negative impacts of this system is an increase in the competition among employees. The performance based reward system is the part of Tesco’s performance management system. With this system, employees have to work hard to perform better than other employees. The solution to this problem is to develop an organizational culture where employees understand and realize the benefits of performance based reward system.

Conclusion

It would be correct to say that the companies that want to increase organisational and employee performance and productivity should invest in getting the right managers in place and support them in engaging their employees. For Tesco, performance management system is an ongoing process, the commitment of leadership of Tesco should not be seen as one time pass but also continuous and repetitive. This is because Tesco started well with backing of the top management of the organisation and along the line drop their support by relaxing their commitment and this resulted into poor implementation of performance management system. However, gaining support of performance management system can be enhance with well-designed system that not failed to carry all the categories of employees along in their preliminary consideration. Many times reasons for the performance systems are well laid out and the workforce misconstrue the aim and objectives of the top management or department of human resources who hands are not too busy compare to other technical department like operations or accounts. For performance management system to gain support and commitment of employees in Tesco, involvement in the design of the system might give more light into grey areas which mar the whole effort of the system. Nankervis & Compton (2006) asserted this view that one way of increasing the acceptance and commitment to performance management system in an organisation is initiate the participation of the employees all levels including the managerial and non-managerial, supervisors and non-supervisors. Employee involvement can also be beneficial in identifying possible problems or weaknesses in a system and in coming up with suggestions for improvement.

References

Aguinis, H., (2013) Performance management. 3rd ed. Upper Saddle River, NJ: Pearson/Prentice Hall.

Beauvallet, G., & Houy, T. (2009). Research on HRM and lean management: a literature survey. International Journal of Human Resources Development and Management, 10(1), 14-33.

Burke, R.J. & Cooper, C.L. (2005) Reinventing Human Resource Management: Challenges and New Directions. London. Routledge, Taylor & Francis Group

Brannen, M. Y., Moore, F., & Mughan, T. (2013, September). Strategic ethnography and reinvigorating Tesco Plc: Leveraging inside/out bicultural bridging in multicultural teams. In Ethnographic Praxis in Industry Conference Proceedings (Vol. 2013, No. 1, pp. 282-299).

Haddock-Millar, J., & Rigby, C. (2015, January). Business Strategy and the Environment: Tesco Plc's Declining Financial Performance and Underlying Issues. In Global Conference on Business & Finance Proceedings (Vol. 10, No. 1, p. 127). Institute for Business & Finance Research.

Hunter, W., & Renwick, D. (2009). Involving British line managers in HRM in a small non-profit work organisation. Employee Relations, 31(4), 398-411.

Nankervis, R. A., & Compton, R. L. (2006) .Performance management: theory in practice? Asia Pacific Journal of Human Resources, 44 (1), pp. 83-101

Saravanja, M. (2011) 10 Reasons Why Performance Management Fails and how to remedy them, Regenesys. [Online] Available from: https://regenesys.co.za/2011/03/10-reasons-why-performance-management-fails-and-how-to-remedy-them/ (Accessed: 21 March 2016).

Waal, A. & Kourtit, K. (2013) ‘Performance Measurement and Management in Practice’, International Journal of Productivity and Performance Management, 62(5), pp. 446-473.

Wood, S., Coe, N. M., & Wrigley, N. (2014). Multi-scalar localization and capability transference: exploring embeddedness in the Asian retail expansion of Tesco. Regional Studies, 1-21.

Zhao, S. (2014). Analyzing and Evaluating Critically Tesco's Current Operations Managemen. Journal of Management and Sustainability, 4(4), 184.

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