The History Of Performance Management System Business Essay

People Resourcing



Table of Contents

Introducing a Performance Management System 4

Benefits of Performance Management System 5

Benefits to the Employee 6

Benefits to the manager 6

Benefits to the organization 6

Procedure for effective dismissal 9

Redundancy and Dismissal Policies of Coca Cola Company 9

Recommendations on Redundancy and Dismissal 11

Conclusion 12


Coca Cola Company is a multinational American company producing non- alcoholic drinks. Asa Griggs Candler established the company in 1886 and the headquarters are based at Atlanta, Georgia, U.S. It has been involved in many acquisitions. Like most companies and organization, The Coca Cola Company practices performance management and has various policies regarding the same. Performance management involves the organization establishing parameters, which will help it towards attaining the set objectives. Performance appraisal on the other hand involves evaluating staff based on their qualitative and quantitative output towards the success of the organization. Coca Cola Company usually set their objectives at the beginning of the year then towards when the year ends; they evaluate their employees and reward them accordingly depending on how well they meet the company’s goals and objectives. This strategy is used to ensure that the staffs are highly motivated and stay loyal to the company’s mission of being among the best beverage company across the globe. Some of the reward tactics employed by Coca Cola include increasing employee salary, increasing an employee’s work grade, assigning a job of higher rank and many more incentive plans. The above strategies employed by Coca Cola enable it to stay on top of its competitors in this very highly competitive beverage industry. At Coca Cola, they set the standard and actually find out whether the particular employee has met them or not.

Performance Management System

Performance management system refers to systematic manner in which the output of an organization can be improved by improving performance of individuals within the framework of the organization. It maybe thought as a cycle consisting of performance planning where goals are thought of and determined. Entails performance coaching where the manager intervenes and gives feedback. Finally, it also consists of performance appraisal whereby the individual’s performance is documented and feedback given. Performance management system includes the following activities:

Developing clear job descriptions and specific tasks together with performance indicators.

Using an appropriate selection system to find the best group of individuals best suited.

Evaluating employee’s performance against the predefined benchmarks.

Providing the necessary coaching and guidance during the process of service delivery.

Incorporating effective programs to improve business performance.

Holding regular performance discussions to find out performance against set objectives.

Providing effective remuneration to motivate employees.

Providing attractive promotional packages to employees who meet the set targets.

Enabling and providing exit interviews for discontented employees thereby allowing them to exit the organization.

Introducing a Performance Management System

As the company, Coca Cola incessantly expands with the increasing number of workers, it is crucial to introduce an effective performance management system in order to enable proper management of the employees. This will allow better service delivery and efficiency. Certain criteria have to be followed to ensure proper functioning of the system. Some of them include:

The employees should have a say in creation of the system and they must evaluate its fairness level. This makes them feel part of the organization.

The company should set both individual and team goals to improve output of the employees.

Employees should have that freedom to review the way he or she is being led. This would promote loyalty towards the organization’s goals and objectives

Any development agenda should have a chance of being fulfilled. This will prevent unrealistic projects that would waste money without being completed.

There should be consistently in the manner in which the system operates and the managers in charge should meet regularly to deliberate on how the comparison is to be done.

It is also crucial to review the system constantly to remove weak areas and during this process, the employees should be involved deeply

Performance management system tries to ensure that the employee makes the greatest contribution possible to the success of the organization

Benefits of Performance Management System

This system is crucial to any organization and as such, several benefits are bound to occur to any organization and to Coca Cola to be specific if its use is employed. Benefits that accrue can be divided into three broad categories, ones to the employee, others to the manager and finally others to the company itself.

Benefits to the Employee

To the employee, there is increased motivation due to the various incentives thereby improving their morale to produce. Whenever there is genuine feedback to the employee and an opportunity is given for improvement, most employees would take it positively leading to improved self-confidence. The duties are more clearly outlined with this type of system allowing the employees to perform exactly what is required of them. This provides a sense of direction among the employees. Moreover, it provides an opportunity for development among the employees especially because there will be a strong urge to deliver due to the incentives, not forgetting that it would improve transparency and promote employee involvement in organization’s obligations.

Benefits to the manager

Performance management system to the manager will help in improving contact and will enhance manager’s understanding of his/her employees since there would be performance of staff appraisals. This system also improves team and individual productivity thereby enhancing the manager’s performance and rating. It would also help in aligning the organization directly behind the manager due to the expected benefits that would accrue by doing that.

Benefits to the organization

The organization would enjoy most benefits due to proper performance management system. An organization exists solely to make profit and survive and proper implementation system would allow that. To the organization, it would enhance better communication of the company’s goals and objectives and everybody will be aligning towards one direction of achieving the company’s goals and objectives. It would also promote sale of many products since most employees will be committed to their works. The organization is also expected to register high profits thereby allowing the organization to expand and even acquire other businesses for instance like what Coca Cola has on several occasions done. It acquired Minute Maid in 1960 and the Indian Cola brand thums up in 1993. Due to performance appraisal and incentives provided, an organization which practices this system will attract qualified individuals thereby driving the organization to higher levels of production since success of an organization is determined by the quality of human resource available to perform the task.

Redundancy and Dismissal

Dismissal occurs when a fixed contract that is not renewed ends. There are several reasons for dismissal and they vary from case to case. However, the main reason for this type of dismissal is redundancy of some sort. This simply means that the duties that were being done by this staff ceases to exist or maybe if it were a research work maybe funding could have been cut off leading to redundancy. In summary, redundancy means being laid off because the services that one used to offer is no longer needed. Several forms of dismissal exists, others may be lawful while others are lawful. They include:

Summary dismissal- Refers to dismissal without notice and usually occurs in gross misconduct.

Unfair dismissal- The refers to a scenario whereby dismissal is carried out without proper reason for doing the same.

Constructive dismissal- In this type, the employees usually resign before their contract is terminated by the employer. In most cases, this happens due to the employer’s uncouth behavior towards the employee or the employee could just leave voluntarily due to greener pastures.

Wrongful dismissal- This happens when the terms and conditions of the letter of employment has been breached.

In all these types of dismissal, if the procedure for dismissal is illegal then the employee could apply to an employment tribunal and could even end up getting compensation for the damage caused. Some cases could even lead to reinstatement. Any employee undergoing redundancy is subject to certain rights, which must not be violated. These rights include:

Right to pay for period worked before redundancy

Right to be given notice

Must be given a right to consult with your employer

Must have the option of moving to a different job

Must be allowed time off to look for another job

Right not to be dismissed on the basis of age, gender or even ethnic affiliation

Employees are protected from unfair dismissal by a particular law, Fair Work Regulations 2009. An employ can protest unfair dismissal if they have worked for the minimum employment period and above. It is usually 6months for an employee. In addition, the employee must meet at least one of the criteria mentioned below

The employ should be covered by a modern award

The employee should be part of the enterprise agreement

Employee’s rate of earning should be less than the high income threshold which is determined in accordance with the law.

Procedure for effective dismissal

During the process of dismissing an employ, specific procedure is expected in order to maintain professionalism of the same. The procedure contains seven major steps as follows:

Inform the employee who is underperforming of your intention to do that and the reason why you have to do that for example.

Tell the employee your points of concern and one can also suggest to the employees the issue of appealing to a senior personnel in the organization.

Hold meetings with the intention of reviewing. If it is the last meeting, one can be firm enough and tell the employee boldly that he/she has been terminated.

If it is not the last meeting, you can always give the employee the benefit of doubt hoping that improvements will be made. Give the employee an opportunity to improve.

Document the issues of concern from that meeting and send a copy to Human Resource department and to whoever is concern.

Organize for another review meeting to find out if the issues agreed upon are improved on or not with them aim of determining the next cause of action.

Once again you document the meeting and give outcome

Redundancy and Dismissal Policies of Coca Cola Company

The Coca Cola Company understands vividly that the success of the organization depends on its proper management of staff. As such they are determined to provide conditions that favour workers and their rights where all employees are respected and valued. They therefore have work place policy that reflects their commitment towards protecting employees’ rights. The work place right is guided by international human rights principles including the United Nations Declaration of Human Rights and International Labour Organization Declaration on Fundamental principles and Rights at work. Annually the managers are expected to familiarize themselves with the company’s Human Rights Statements and work place Rights policy. This is done to ensure that redundancy and dismissal if it must be done should follow the right channel and procedure to prevent violation of human rights. The managers also receive regular training on these policies and any employee who feels violated should appeal and The Coca Cola Company has established a toll free line to receive such complains.

The Alliance of Coca Cola unions in Philippines is however not happy with the company since most workers are losing their security of tenure, regular jobs are being constantly replaced by contractual jobs, this would lead to lack of commitment in the organization since the employee would be in that particular organization for only a certain period of time. According to the union, the company is also promoting early retirement among its workers and this is not received well among the workforce. This is not fair especially after toiling so hard to be in a particular position and when you are supposed to enjoy the fruits of your labour, you are expected to retire. More recently, Coca Cola has introduced a program known as P3, Performance, Participation and Presence. This program is ruining the future of some of their employees and dependants. Some of the clauses that Alliance of Coca Cola unions in Philippines, Accup is against are the provision that increase in wage to be performance-based. This simply means that even with the tightening economic times, in the event that your output is low, your salary will remain constant. It is discriminative and should not be practiced in an organization that claims to value its employees. A better way of implementing that would be to annually increase salary and also perform performance appraisal to award extra cash to the employee who meet the goals and expectations of the employer.

Under this P3 program, employees are subjected to performance reviews every two months and ones who do not meet the target are subjected to dismissal. This is an unfair dismissal and violates the rights of individuals. Instead, the organization should introduce performance appraisal to encourage the workers to work harder rather than subjecting them to unnecessary stress of undergoing performance reviews every two months.

Recommendations on Redundancy and Dismissal

Even though recession has caused redundancy rates to soar, it should be performed in a particular manner that does not violate an individual’s right. It is clear knowledge that even the most qualified employees are facing redundancy. Certain scenarios are not just pleasing, if an organization realizes that a particular employee is pregnant, some are usually faced with redundancy. This is clearly unfair and unjust and the organization should develop a particular mechanism whereby those who are in that position can get leave and come back when they have recovered without undergoing redundancy or dismissal. It is necessary therefore that before any redundancy is done; the employer should understand what is laid down in the Employment Rights Act. According to the Act, an employer can only make you redundant once certain facts have been confirmed. He/she should prove beyond reasonable doubt that there is a plan to stop doing what the employer was hired to do and as such, the services would not be required by the organization. The employer should confirm that the skills are no longer needed in the organization and that they ceased to be required. Redundancy should also only take place when the operations of the organization are being moved to an area where the employee cannot access or commute if they do not wish to move. Another scenario where redundancy can take place is when the organization stops to operate which could happen due to a number of reasons including collapsing. Coca Cola Company should also strive to maintain the regular jobs instead of contractual ones in order to avoid making employees redundant. Instead of performing performance appraisal with the aim of laying off some workers, the Coca Cola organization should improve on their deal with the employees. It should be done targeting a different agenda. Performance appraisal should be aimed at getting that employee who works hard towards achieving the organization’s goals and objectives. They are supposed to be rewarded in order to act as an incentive and also to encourage the rest to follow suit hence increasing output of the organizations. Doing it with the aim of dismissing some employees is punitive and is not very good to the business’ growth and popularity since it could lead to employees eschewing the organization yet they are deemed the backbone of the organization.

The organization should also outline clearly the expectation from each worker and the factors that can lead to dismissal so that everyone is aware and therefore works towards the same. This would help in curbing summary dismissal whereby one is dismissed without notice as it helps the person to be aware.


The high inflation rate is forcing many large organizations to lay off some workers. This is in some situations inevitable but there are certain rules and legislations that should govern this. Having an over-sized personnel would put strain on the organization’s financial resources and therefore most organizations are trying to do away with this even by violating the rights of the workers. Certain rules and regulations have been formulated to ensure that the workers are protected and that dismissal is not performed without a good reason. This catastrophe affects even large multinational companies like Coca Cola. In Coca Cola for instance, there is complaints that most of the jobs, which used to be on permanent basis is now being contractual. This is really harming many employees who depend solely on the organization. Another issue that has been received negatively is the wage increment, which is based on performance. In Coca Cola, Accup complained of the fact that performance reviews are done every two months with the aim of dismissing employees who do not meet the objectives of the organization.

Performance management system forms a very crucial part of business success. Well-trained and motivated staff forms the very backbone of a strong organization and as such, incentives must be provided in order to motivate the employees to increase their output towards the organization. Rewarding employees annually based on their input to the organization would go a long way in improving employee performance. In Coca Cola for instance because of their in depth understanding of this enables them to use this strategy well for the benefit of the organization. It is therefore very necessary that any organization that wishes to expand should employ this very effectively.