Performance App and Compensation - Pouxa

Performance Appraisal

        Pouxa performs performance appraisal, a formal system of review and evaluation of individual or team task performance, to help establish compensation guidelines. Performance appraisal and compensation should be directly tied to one another and it is the best way to reward exemplary job performances. Another purpose for performance appraisal is for training and development among the employees at Pouxa. And lastly, it is important to perform performance appraisal to determine whether we need more recruitments and selection in the company.

        Pouxa’s performance appraisal process is to first, identify specific goals. The goals for Pouxa employees are to have great attendance and punctuality, creativity and problem solving, customer service, management and supervision, and sales skills. Secondly, we need to establish different performance criteria for each position in the company relying on the traits, behaviors, competencies and goal achievement. Third of the performance appraisal process is that we will examine the work performed throughout the year. Fourth, Pouxa will appraise the results when the end of the year or time period has come. And the last step of the performance appraisal process is to discuss the appraisal with each employee. Pouxa’s performance appraisal will be managed by the supervisors.

        There are several performance appraisal methods that Pouxa will follow. We will use the 360 degree feedback. The 360 degree feedback is input from multiple sources such as supervisors, subordinates, peers, and customers. A pro of the 360 degree feedback is that shifting responsibility to multiple sources helps to reduce or eliminate common appraisal errors and this process is more legally defensive. Pouxa will follow the 360 degree feedback using sources from peers, subordinates and supervisors for a more accurate appraisal. Pouxa will use the comparison system as another method of performance appraisal. The comparison system evaluates an employee’s performance against that of another. Commonly, a comparison system will rank employees form the best performer to the poorest performer. The supervisors judge overall performance or specific ones. A variation of ranking method that Pouxa will use form the comparison system is paired comparison. Paired comparison, is comparing performance of each employee with every other employee in groups. And lastly, Pouxa will use the behavioral system method. The behavioral system rates extent to which employees display successful job performance behaviors. A method from the behavioral system that Pouxa will follow is the Critical Incident Technique. This appraisal method is most likely to cover the entire evaluation period and not focus on the last few weeks or months. It also requires for managers to keep written records of highly favorable and unfavorable work actions.

        To make sure that Pouxa’s performance appraisal is effective to have a job-related criteria and standard. It is also important for managers and subordinates to agree on performance expectations advance of each appraisal period. It is significant to do so that way employees will be able to understand the expectations and make timely adjustments. Pouxa will have equal standardization for all employees in the same category. To make the company more effective is to have trained appraisers, who will continue to have ongoing training and understand how to rate employees and conduct appraisal interviews. Having an open communication with employees will be beneficial so employees will know how strong they are performing. Setting time aside for performance reviews is a formal discussion of an employee’s performance. Performance reviews allows employees to detect any errors or omissions in appraisal.

Direct and Indirect Financial Compensation

        There are three types of financial compensation. The first is direct compensation, pay received in the form of wages, salaries, bonuses and commissions. The second is indirect financial compensation, which is all financial rewards that are not included in the direct financial compensation. The third compensation is the nonfinancial compensation, which is the satisfaction that a person receives from the job itself. Pouxa will use all three of the financial compensations to reward our employees. To determine how we will compensate our employees, there are four factors of organization, labor market, job, and employee that we will use to determine the pay. As organization is a factor of the financial compensation, it is important that we have compensation policies that we follow. A compensation policy that Pouxa will follow is the market match policy. The market match policy pays what most employers pay for the same job. Secondly, the labor market will help determined the potential employees in each geographic area and whether the pay rate is the same. The job itself continues to be a factor, Pouxa will look at the certain duties, responsibilities, and other job related factors such as working condition for each job. Lastly, Pouxa will look at the employees as a factor to determined financial compensation according to the performance, skills, competencies, seniority, experience and potential of each employee.

        Pouxa will follow the Fair Labor Standards Act of 1938 to compensate employees for overtime payment. The Fair Labor Standards Act is the most significant law affecting compensation. The law establishes minimum wage, requires overtime pay and record keeping, and it provides standards for child labor. Those who will receive overtime pay is the nonexempt employees, those who are not categorized as executive, administrative, professional employees and outside salespersons.

        Pouxa’s job evaluation, which is the process that determines the relative value of one job in relation to another, will include the ranking method, classification method, factor comparison and point method. The ranking method is arranging the jobs according to their value in the company. The classification method is defining the number of classes or grades to describe groups of jobs, also comparing the job description to class description. The factor comparison, Pouxa will not solely rate employees on just the job but also mental requirements, physical requirements, skills, responsibilities and working conditions. Lastly, the point method is using numerical values assigned to specific job components. The sum of values gives quantitative assessment of job’s relative worth.