Applied Payroll Management Monitoring and Appraising Performance Tula Equipment Scenario Six months ago Nora was hired as Payroll Manager by Tula Equipment, a manufacturing company that has 7 employees in the payroll department. Nora's predecessor had retired after 30 years with the company. When she was hired, Nora was told the payroll function worked smoothly, but she should get used to employees who were always complaining about their cheques. "Don't let it bother you," the Vice- President told her, "they tend to be impatient and the previous Payroll Manager didn't let the complaints get to her." This view of the Vice-President may not be shared by the other executives, as they may have been hoping for reform in the payroll department. After all, Nora was hired externally when there were seven potential internal candidates who knew the payroll function. Though nothing has been said to Nora, bringing her own management style to the department may send a message that she is the proactive Payroll Manager the company was seeking. Over her first few months in the position, Nora noticed a few behaviours that surprised her. Peter was responsible for answering employee enquiries. If Peter was on a break at his desk, he would ignore employees who had come into the payroll area with a question. Peter also muted the phone's ringtone when he was at lunch or was busy. Charles was enthusiastic and ambitious. He often stayed late to troubleshoot some problem that occurred. Nora sometimes saw Charles help employees who came to the office, even though that service was Peter's responsibility. Nora has also learned that Charles is taking courses to improve his knowledge of payroll. Mona is often close to tears because the U.S. employees complain by email about the pays she has processed for the New York branch plant that was opened three months ago. Canadian Payroll Association Monitoring and Appraising Performance Scenario Page 1 of 6
This morning Nora received a memo from Human Resources that all performance appraisals were due in two weeks. Nora reviewed the performance appraisal form she was sent with the memo: 1. Ability to do the job 2. Attendance 3. Ability to get along with colleagues 4. Meets deadlines Unsatisfactory Satisfactory Excellent Comments She reviewed the previous performance appraisals for the payroll employees and saw that every member of the department consistently received a rating of 'Satisfactory' and the comments section was always blank. During the lunch break, Nora went for a walk and contemplated what she has to do to introduce an effective performance appraisal process to the department. She has many questions about the company s approach and attitude toward effective performance management and measurement. Develop a plan for implementing performance measurement tools and an effective performance appraisal process for the department. Notes 1. Students should read The Case Study, available on the Supplemental Resources site, for more information on the decision-making process to be used when developing their responses. 2. The student s response should be based on an understanding of the course material and personal and professional experiences. 3. The following is an example of one approach to this scenario. Students may come up with other approaches. Canadian Payroll Association Monitoring and Appraising Performance Scenario Page 2 of 6
Issue Nora must present performance appraisals for her employees within two weeks. Analysis (Barriers, Resources, Stakeholders) There are many things about the company we do not know: Are there stated corporate goals? How flexible is the performance appraisal form? Do other departments have performance standards and do other departments use appraisal forms that set measureable performance standards? Is there a training budget? Does the company have a professional development or career planning strategy? Nora can easily find the answers to these questions by contacting the Human Resources Department. She can integrate whatever resources are available into the performance appraisal discussions with her employees. The appraisal form does not present measurable performance standards and is therefore an unhelpful feedback tool. It also appears that the previous Payroll Manager did not take the appraisals seriously since everyone received the same rating and there were no comments to indicate feedback on performance or recommendations for development. The Vice-President's comment that the Payroll Department runs smoothly and the company s employees are an irritant, reflects a lack of knowledge of the operations of the payroll department. Perhaps the previous Payroll Manager had convinced the Vice- President that the department was extremely efficient. If there are no internal performance standards, the Vice-President would not have any point of comparison to indicate if the employees were being well-served. Nora has observed at least three areas for improvement: 1. There is no protocol for answering employee inquiries, whether they are in person, by email or by phone. Peter has given employee enquiries low priority. Such behaviour may reflect a lack of interest or dedication on Peter's part, or it may indicate the absence of performance standards. One performance standard could be that employee enquiries receive attention before all other activities. Another standard could prioritize customer service, for example, an in-person gets attention before a phone is answered. Canadian Payroll Association Monitoring and Appraising Performance Scenario Page 3 of 6
There does not appear to be a service standard that will insure that the enquiries are answered during lunch breaks. If the department does not have the resources to answer employees enquiries when Peter is on a break or having lunch, a voice message and sign in the office can indicate the hours a team member is available to respond to enquiries. Without measurable performance standards to serve as a guideline, Peter may think he is doing an excellent job, while Nora may feel he is lazy and inefficient, which are more likely to be perceived as comments on his character instead of his performance. 2. Charles shows initiative and appears to perform beyond the level expected, yet his performance appraisals does not reflect this extra effort. Nora should explore if the company supports his studies with financial assistance and/or time off to study. He may be doing all this professional development on his own. If there is no acknowledgement of his efforts, and no clear pathway to advancement, Charles may look for opportunities at other companies. 3. Mona is being very emotional about the complaints she receives from employees at the U.S. plant. Without performance standards, it is not possible to determine if her performance is acceptable. How many mistakes are acceptable? Without performance standards, there is usually a temptation to focus on character and personality. If Mona is so emotional, does this mean she does not have the emotional stamina to perform her duties? Nora should explore if Mona has received any training on the payroll requirements for the U.S.-based employees. Mona may think that she is supposed to know all the rules and is trying to hide her lack of knowledge. She may fear the loss of her job if the complaints continue. There are no indications that the employees have ever been asked an opinion about the operations of the department. With the exception of Charles answering employee enquiries, the payroll department employees appear to operate independent of each other. Charles has not approached Nora about his ambitions; Peter has not alerted her of the inadequate resources dedicated to customer service and Mona does not appear to have asked anyone for help in dealing with the payroll legislation of a new jurisdiction. Canadian Payroll Association Monitoring and Appraising Performance Scenario Page 4 of 6
Alternatives 1. Do nothing Nora can ignore the request for performance appraisals. If asked why she has not delivered them, she can respond that she has not been in the position long enough and will need more time. 2. Replicate the performance appraisals of her predecessor. These forms have been accepted for years and will likely be accepted this time and filed away. The impression may be that all is well in payroll. 3. Nora can meet with her employees as a group and then individually, to set performance targets and control loops for monitoring performance. For example, as a group, the employees can set an achievable target response time for each employee enquiry. Peter may say he could easily answer all enquiries within five minutes, but no one has ever asked him to make customer service a priority. Or, Peter might say the department needs more resources to handle the volume of enquiries, in which case Nora can use this information to request more resources for the department. The team may also tell Nora that the high enquiry rate is the result of lack of training. They may tell her that they do not have access to training to keep them up-to-date on changes in legislation or on how to most effectively use the company's payroll system, and that is why they make mistakes. Nora can use the open discussion to develop a SWOT analysis of the department's performance targets: strengths (employees who try to do their jobs to the best of their abilities) weaknesses (lack of training and set performance expectations) opportunities (could Charles provide peer training for other members of the employees?) threats within the department (will Charles leave?) Together, the team can set targets for the payroll department, establish standards and measure their own performance. Nora's performance appraisals would indicate the goals of each individual, how they would be measured and the resources needed to achieve those goals. Canadian Payroll Association Monitoring and Appraising Performance Scenario Page 5 of 6
Action Plan The first thing Nora should do is gather information about the company's corporate objectives, performance standards, training and development policies and programs. She should find out if the company has a policy of benchmarking performance against similar functions in other companies in the same industry. Any of these elements will provide guidance and resources to establish a performance appraisal system for her department. While alternatives (1) and (2) are easy options to pursue, they demonstrate poor leadership. Alternative (3) provides Nora and her team with information on areas of weakness and strength within the department. While setting up goals and performance measures is an on-going process, Nora can provide Human Resources with valuable feedback within the two-week deadline. She can use the comment section of the performance appraisal form to indicate the achievements of each individual (Mona has taken on the responsibility of the U.S. payroll) as well as point out the resources needed to improve performance (Mona requires training on the legislative payroll requirements of the state where the plant is located). Each team member can participate in the appraisal to ensure that their needs are addressed. The needs highlighted by the appraisal review will form the foundation for Nora to develop a professional development plan for each member of her team and a performance improvement plan for the payroll department. Canadian Payroll Association Monitoring and Appraising Performance Scenario Page 6 of 6