Sample Essay on Report on Performance Management

Summary of Case

HJ Heinz Company Australia has dismissed a sales manager who refused to engage in performance management. The sales manager, who goes by the name Moretti, had refused to engage in the activity as he suspected that the whole process was being utilized to ensure he could exit from the company. Fair Work Australia (FWA) investigated the process and established that the whole process had been unfair to Moretti, and it was wrong for the company to dismiss him. Brendan McCarthy, the deputy president of FWA, ordered that Moretti be reinstated since the performance grounds that were utilized for his dismissal were imperfectly and carelessly formed (Moray & Agnew Lawyers 2012).

During the hearing, Heinz suggested the individual performance management plan for Moretti because he had scored lowly in his annual review. Ironically, though, the low score by Moretti was fallacious because the company had scored lowly in its review of all company employees. If all employees score lowly in their annual review, it is unfair to subject only Moretti to an individual performance rating. Moretti got wind of the plan to dismiss him from work in June during a meeting with the retail sales manager. The manager informed Moretti that there was no longer a job for him, and it would be prudent for him to resign or gotten rid of by performance management. Heinz provided no evidence that contradicted Moretti’s assertions.

In the subsequent months, Heinz engaged in a series of meetings with Moretti informing him that they have particular concerns about his performance. They therefore needed him to sign an individual performance management plan by 17th August or risk being dismissed. Moretti sensed foul play in this initiative, and he did not sign the document. The company argued that they did not have an option other than dismiss Moretti. McCarthy argued otherwise stating that probably there were alternative options that needed to be considered. Moretti had a good reason not to sign since he was suspicious of the company’s intentions. From previous experiences, no other managers had gone through performance management and if at all they were carried out before it was for the sole intention of dismissing them. Heinz company did not convince McCarthy on the impossibility of reinstatement and ordered Moretti be appointed to a similar position, if not better, and he be compensated fully for lost time (Moray & Agnew Lawyers 2012).

Performance Management Practices at Heinz, Australia

Heinz Company is a multinational company that markets and manufactures branded foods. The company is mainly recognized for the ketchup it produces, but it has a comprehensive presence in other foods like tuna, soup, and condiments. The company is based in the U.S, but has subsidiaries in most countries that take on brand leadership in market position in their countries of operation. One such subsidiary is Heinz Company, Australia which has taken a leadership role in the region for the quality it delivers its goods and services. However, the company has come under intense scrutiny over its human resource practices essentially because of employee dismissals during performance management reviews.

The company has implemented a laid down procedure for employee development and performance management since 2010. Heinz Company, Australia encourages all employees to endeavor in maximizing their performance at their workstations. In order to provide an incentive towards this, a set of tools and benefits have been developed that could provide adequate direction towards improving performance. The management asserts that the management of performance is an ongoing process that is carried out throughout the year either through formal or informal mechanisms (HJ Heinz Co Australia Ltd 2010). It is a structured system that is quite essential to operations within the human resource department in the corporation.

The performance management and development plan at Heinz have been structured in such a way that it attains certain objectives. The first objective is to ensure that individual goals are stretched outside the basic job requirements. Employees should be able to outperform at their duties and be self-oriented towards ensuring they attain more at their roles in the workplace. The other objective is to ensure that employees work towards outcomes that are aligned with departmental and organizational goals. Employees should endeavor to achieve targeted goals and ensure they are able at the minimum meet them if not surpass them. The third objective of performance management policy is to ensure that all employees identify core role competencies that are necessary to ensure the company can move forward and achieve more in the future. By integrating the three objectives, the performance management process becomes a collaborative process between employees and managers for the sole interest of the organization as a whole (HJ Heinz Co Australia Ltd 2010). Both managers and employees can assess performance and establish the sectors that might need improvement and the possibility of more training.

Essentially, the performance management process at Heinz Australia consists of three stages that are considered paramount towards establishing credible performance standards. The first step is establishing corporate objectives often carried out during the period of March to April. At this time, the managing director will set corporate objectives for the coming year that are in tandem with that of the headquarters of the company. After the corporate objectives being set, departmental goals can be structured, and this trickles down to individuals who define their specific goals. The second stage takes place in May where the performance management plan sets five personal goals that need to be met. It is at this point that workers often engage actively with managers to establish what they attained in the previous year and what their objectives are for the current year. This is when a performance management score can be developed to establish their achievements and failures so far. The third step in the process often takes place in May where a review is conducted on the performance of the employee throughout the year. A thorough analysis is done during this time and recommendations are made on how performances can be improved in the next fiscal year.

Significance of Strategic Performance Management

Performance management can be defined as the process by which a strategic and integrated approach is made towards delivering sustained success. This can be achieved by improving the performances of individuals working in organizations and developing capabilities of individual contributors and teams (Abubakar Tabiu 2013). Strategic performance management is concerned with ensuring the business can function effectively and can be more profitable in the end. The main resolve of performance management is to provide a more integrated approach towards performance enhancement. It is based on the principle of management by agreement rather than being commanded to meet a particular objective. The process emphasizes that there is a need to integrate individual and corporate objectives to achieve the objectives of the process entirely. Initiation of self-learning and individual development plans is paramount in establishing the process. However, performance management is greatly discouraged as a point of consideration when rating on merit and in performance appraisal schemes (Boselie 2000).

Performance management aims at providing a means for better results to be obtained from individuals, teams, and the organization as a whole. It achieves this by encouraging a platform where an undertaking can be made on achieving individual goals, standards, and competency requirements. Often the process models employees to increase the possibility of success in their activities either in the long run or short term basis. This is a crucial role of the human resource department as it increases the motivation of employees and strengthens their commitment towards developing abilities, increasing job satisfaction, and achievement of full potentials to the improvement of both themselves and the organization as a whole. Opportunities for personnel evaluation should never be utilized as a means to declare redundancy rather it should point out weaknesses of both the system and employees and endeavor to improve them by investing credible resources in training and upgrading company amenities (Voorde 2000).

Strategic performance management should not be utilized as a form of appraising people due to their previous achievements and punishment for prior failures. It is a process that can not be utilized in the generation of information that influences payment decisions. The process should be carried out in a strategic way that is forward-looking and focused on the development of the corporation. It is a transformational process that provides a framework where managers and employees are more concerned about refining their working conditions so as to meet set objectives of the company. It can never be an appraisal system since such discourages collaboration and only encourages internal competition that can be detrimental to business operations (C. Lobo 2000). Organizations that can implement performance management systems effectively often perform better financially and non-financially because they are management driven.

The Invalidity of Heinz Approach to Moretti’s Job

Heinz approach to Moretti’s job was invalid on many facets as regards to strategic performance management, appraisal, and employee feedback mechanism. It was totally reckless and utterly unfair to utilize performance management as a channel of firing Moretti. This is because it does not adhere to set down standards on the significance and purpose of performance reviews. Performance management should focus on improving the relationships in the company and endeavor to ensure employees set goals and put in place strategies towards achieving them. Heinz was not focused at all on building a long term relationship with Moretti in an effort to encourage positive contribution towards the corporation in the long run. It appears that the company was forcing Moretti to go through the performance review so that they could establish a credible basis to fire him. When they realized he was not going to sign it, they opted to fire him citing unruly behavior. However, Moretti was right in not signing the performance review because he had credible doubts about the company’s intentions. His dismissal was unfair and not guided by human resource principles.

There is a need for Heinz, Australia to revise the way it conducts its performance management process. Performance management can never be utilized to facilitate termination of employees (Collins 2003). The performance review is not to be utilized in employee appraisal. A balanced scorecard should be the right document that is utilized towards achieving this. Employees should be able to be guided by what their duties and responsibilities are and the expectations that the company has towards the same. The balanced scorecard provides an opportunity for the company to monitor the performance of the employee and his achievements and failures (C. Lobo 2000). If at all the employee is not performing as expected then credible action can be taken that could establish why the expectations are not being met and what needs to be done in order for them to be met. If the employee responsible for the failure, then he should be talked to and asked why their act is not at par with the expectations at hand. The employee should be warned against the trend, and if he does not improve then dismissal on redundancy would be appropriate. In Moretti’s case, this did not take place, and the dismissal process was not efficient.

The feedback process that was utilized during performance review was not appropriate and was uncalled for. A performance review should be voluntary and should be carried out across the board and not on a particular employee like it was in Moretti’s case (Caliskan 2010). The feedback mechanism utilized was threatening in that Moretti was informed that he either participates in the process or risk getting fired. Whatever option Moretti chose he was to get fired, and this should never be the option that a performance review offers to employees. The feedback mechanism in a performance review should be collaborative and encourage employees towards meeting the objectives of the company. It should provide inspiration for them to engage passionately in business operations and ensure they outperform in their duties. It is entirely wrong to threaten employees during the process as Heinz did.

Impact of Organizational Performance Management

A proper organizational performance management system brings many benefits to the organization that can sustain growth and development within the corporation. When performance management is carried out accordingly, it contributes to goal accomplishments and the survival of the corporation. Employees can be able to share in the objectives of the business and purpose to achieve the goals that need to be met (Armstrong 2003). Therefore, it supports the successful implementation of business strategies within the company. When employees can deliver on their responsibilities efficiently, it naturally creates an environment within the corporation that ensures the establishment can maintain a competitive advantage in the industry. Active performance management techniques can increase the responsiveness of the corporation to innovation. Essentially the performance management review improves partnerships and core relations within the company through facilitating an avenue where the human resource department and line managers can partner in meeting specified goals of the organization (Wall 2011).

There are critical areas within the human resource department practice areas that performance management plays a crucial role in. Proper performance management takes into consideration the fact that it has to attract, develop, and retain high-quality individuals within the corporation. By conducting the review, management can ensure there is a delivery of superior performance within the organization and high levels of personal care can be attained (Boxall 2007). The working environment can also be developed to provide critical values and balance in the workplace that ensures the workstation is a safe environment to work in. Talent management is of critical concern and performance reviews offer a proper platform where talent can be recognized in the organization and greatly enhanced to meet company objectives. The primary goal of a performance review should be to increase motivation commitment and role engagement to the tasks at hand (Kuvaas 2008). It should encourage people to identify themselves with the core values of the corporation and willingly contribute to achievements of organizational goals. Performance reviews develop a climate in the workplace where cooperation and trust are encouraged among everyone. Furthermore, it offers higher performance management in specific areas of the organization as pertains to profits, productivity, levels of growth, increased shareholder value, and more levels of customer service (D’Annunzio-Green, et al. 2002).

The Unreliability of Heinz Approach to Performance Management

Heinz approach does not encourage talent acquisition and retention within the organization. It, in fact, discourages it since employees can be dismissed through being performance managed out. This is an unreliable system that encourages hatred and mistrust among employees. The perception at Heinz is that when an individual is asked to take part in a performance management then the organization is deliberately engaging in that action so as to dismiss the employees. This establishes enough grounds to ascertain that performance management at Heinz does not meet specified objectives and does more harm to the corporation as opposed to contributing positively to its business performance.

The performance management system does not provide employees with an opportunity to share in the goals and objectives of the company. This is because it takes the form of a test with guaranteed failure that leads to dismissal. When such a setting is established in the business, there can be no growth, and subsequently the corporation will experience a less competitive environment and more likelihood of low performance in the industry (Christen 2003). Core relationships and partnerships in the corporation end up getting affected, and goals cannot be met because of failure to work as a team. The overall consequence of the poor performance management at Heinz is that employees do not identify with the objectives of the company and, therefore, do not endeavor to partake positively in meeting them (Grigore Ana-Maria 2008). Cooperation and trust are discouraged, and employees end up performing at their minimum in an effort to retain their jobs. If the performance management at Heinz Australia is not carefully reviewed, then in the long run profits will be lowered, there will be increased employee turnover, negative publicity as with Moretti’s case, decreased shareholder value, and ultimately the corporation will collapse due to non-performance.

Recommendations on Improvements of Heinz Employee Performance Management

Various improvements can be made to the strategic performance management utilized by Heinz Corporation, Australia. The first initiative would be to ensure that the performance management is offered to all employees working at the establishment. By implementing this on a universal platform, the company does away with the notion that performance management is only carried out as a means to getting rid of employees from the organization. When that is implemented, all employees will be happy to participate in the process and actively engage in all the activities that are involved in the process (Saks 2006). The company could initiate such a mechanism by establishing certain periods within the year that every employee can undertake the performance management. When all employees take part in the activity, they get to interact positively with each other and stimulate one another towards achieving the objectives of the company. The initiative to implement performance management ensures that the organization can stimulate everyone to adhere passionately to standards that have been set.

The other factor that the corporation could implement within the novice performance management system is to educate its employees on the importance of performance management. The training could ensure that all employees get to comprehend the significance of the process completely and actively engage in it. This would involve training engagements with every employee in the company and a challenge to them to take a keener interest in the process as a whole. When employees are educated on the process, then they will understand the process of performance management and get to understand the activities involved completely. If Heinz carried out the process, then employees will get completely to comprehend the core values of the company. They will be in a better situation to actively participate in the core values of the company and passionately undertake to achieve set goals in the best interest of the corporation.


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