Human Resources Planning and Development >> Performance

A) Performance appraisals and reward management

Our organization will use an appraisal system based on pre-defined objectives for each strategic area, a pay review will be done once a year before the end of the year for the new pay and bonus to be applied in April. The employee and his/her line manager will sit down at the beginning of the year to go through what is required from the employee to achieve a level of performance, during this meeting objectives to complete the job are written down and agree between both parties. The employee will enter these objectives online, and the line manager will need to sign these off also online.

Once these objectives have been set and have been entered and signed off online, the employee will task him/herself to achieving these objectives with the highest performance. These objectives are judged individually on 4 levels: I (Needs Improvement) – this is when the employee hasn’t completed his objectives to a satisfactorily level, G (Good) – this is when the employee has completed all his/her objectives to the standard level, H (High) – this is when the employee has completed all his/her objectives and more has been achieved on top of what was originally agreed, and E (Exceptional) – this is when all objectives have been achieved, much more has been achieved to what was set out and the employee has introduced some type of innovation to make the job better run in the future. Exceptional is the highest level one can achieve and also rewards with the best pay and bonus.

There will be regular meetings between the line manager and the employee to give the employee a view as to current progress and what he/she needs to achieve to complete all objectives. At the end of the year a reward appraisal is completed between the line manager, the employee and HR. During this meeting the employee must prove that all objectives have been completed and at what level. The employee will need to print of documentation, links and emails, which could support the employee’s case for a higher-level rating. The employee will give his/her case and reasoning why he/she should get the rating they want, and the line manager will also put a case forward to what level he/she thinks the level should be.

Once the level has been determined HR are informed and they will enter on the system the results of the pay review. Depending on the level achieved the bonus and pay review will come into effect the following April at the start of the tax year. For most job roles around this organization the pay appraisal review will only occur once a year but all employees should have set objectives to achieve at the beginning of the year.

The main let down is the fact that this kind of pay review occurs only once a year, although objective meetings occur more regularly. This pay appraisal review may be very subjective onn employee who hasn’t completed much work but is good at presenting and talking could get a higher review than someone who isn’t good at ‘showing off’ about his/her work but has actually completed more work. This pay review could also turn out to be a self-justification on the employee’s existence and could turn into a heated argument.

In Centrica all employees need to fill out an online form called the Individual Performance Contract (IPC). This form will contain objectives and competencies for the employee to achieve during the work/project assignment and/or for a calendar year. During meetings with the line manager, an employee can fill this out once direction has been achieved from the line manager in question. This contract forms an informal agreement between the line manager and employee of what is required.

B) Comparison of Exit Procedures used by the two organizations, and explore their pluses and minuses, compare to best practice

At both Centrica and EDS, the exit procedures used by both organizations are very similar at a high level, but do vary at a granular level. The first exit procedure employed by both organizations is ‘serious misconduct’; this is a generalist statement and can cover a wide range of scenarios. At Centrica & EDS misconduct is defined as an employee acting in a way which is deemed to be in breach of policies and which is acting against the interests of the organization. An example could be drug use, alcoholism, sexual harassment and unauthorized absence etc.

Another exit procedure used by both organizations is through a sabbatical. An employee can take a sabbatical away from work for any period between one week and 12 months; this is usually unpaid leave and can only occur if the employee has been employed by the organization for a continuous period of 2 years.

Another exit procedure is via maternal or paternal leave; Centrica and EDS will support all employees financially when the employee is off work due to pregnancy and young children. Redundancy is another exit procedure identified used by both organizations, this is discussed more in detail below.

The final exit procedure used by Centrica is the Continued Education Policy; Centrica supports the further education of employees and allows an employee to go back into full time education, providing they can prove it to be useful for their role and they have been continuously employed for 3 years or more.

Once an exit has been confirmed the HR Manager will conduct an exit interview with the departing employee. According to the NHS in Shetland, the employee will view this as an opportunity to be honest and provide ‘constructive comments’ on the company and the role taken. This interview will be confidential enabling the employee to feedback without any repercussions, and it will be up to the management if they wish to act on this feedback or not. According to the same article ‘all information collected remains confidential and is stored in line with the Data Protection Act 1998’ .

C) Selection Criteria for redundancy and how they fit in the organization

The key components of Centrica’s redundancy policy are as follows:

• Purpose / scope – gives a background and a ‘story’ to the redundancy policy, it also outlines which employees are within scope of the policy;
• Policy – This is a brief blurb on the redundancy policy and confirmation that Centrica’s policy is to avoid redundancy wherever possible. The policy goes onto to state that Centrica will provide as much assistance to employees in seeking a new role within the organization. The policy also states that compensation will be provided depending on salary and term of service;
• Redundancy payments – this states that a few constants will be calculated to work out the total redundancy payment only if suitable alternative roles were found, if the suitable role isn’t taken when offered the employee is no longer entitled to redundancy. The redundancy calculation is dependent on Salary, Length of Service and notice period;
• Selection for redundancy – this states that an employee could be selected depending on requirements (skills/qualification) for the role required. Depending on the changes to the specifications of the job will depend on current staff losing or keeping their roles. This is a poor policy as it doesn’t allow employees to self or re-train themselves to be suitable for the job role; • Alternative Employment – this states that Centrica will as much as possible help employees seek alternative roles and provide suitable training to carry on within the organization;

The policy overall can be improved to take into consideration employees who wish to take voluntary redundancies. There is currently no policy, which will allow employees to take voluntary redundancy at the discretion of Centrica. The policy should also include any allowance for employees who are to be made redundant, time off to search for a new role outside the company.

The redundancy policy listed above is very similar to a model redundancy listed on the voluntary and community action for London. The model redundancy states the principles, which contains the background scope as can be seen above. The model redundancy policy goes onto to state the preventative measures, which goes onto state that every possible action will be taken to prevent a redundancy in the first place and Compulsory Redundancy and this section states that employees will not be made redundant if they belong to select groups. The policy goes onto to list information about the employee rights and appeals process if required. The model redundancy can be found at the Voluntary and community action for London webpage .

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