Performance Management in Pepsico

ASSIGNMENT OF PERFORMANCE MANAGEMENT SYSTEM

COMPANY TAKEN - SHELL

IDENTIFY THE WEAKNESS OF THE PERFORMANCE MANAGEMENT STRATEGY OF SHELL

Some of the performance appraisal methods that dutch shell uses are Straight Ranking Method, Grading method and Forced Choice Distribution Method. These methods has a lot of weaknesses in measuring the performance appraisal of the organisation. The straight line method creates a lot of difficulties in measuring the performance of a particular employee with other employee having different behavioral traits and job requirements. This method only tells us how a man stands different from another in a group but not tells us how he/she is different from one another. The Grading method also as such proves to be a demotivator in a group of employees who got 50%-60% from who got 80%-90% points.The forced choice distribution method also has many such weakness in shell as it creates irritation and conflicts between the raters because they are not trusted by the authorities and most of the time rater doesn't go into the detail and the result of evaluation doesn't prove valuable for the training.

How ever performance appraisal system in Shell is quite satisfactory so management should take extra steps to make it more and more better because the world is changing day by day very fast and one cannot bear to have the old systems in the organization as research n development is a very important in the prosperity of the company that leads to the innovation. So after achieving the stage of satisfaction the company should move forward to gain more excellence so that to make itself more compatible in the market for a long period of time because being on the top is first step of the success but to sustain the position is the real success for the company.

An example of Shell's training activities is shown as follows: Tailored training program is offered to all new employees and includes inductions and specific program namely "shell life". This training is available to only new employees and not to every staff employees. They train the employees about life in shell and also the newest technologies which other staff members are not aware off. Shell Life is a course that is highly experiential and interactive designed for university graduates to develop their leadership potentials.

SUGGESTED PERFORMANCE MANAGEMENT MODULE

HUMAN RESOURCE (COST) ACCOUNTING METHOD

Human Resource accounting method analyses an employee's performance through the monetary benefits he/she yields to the company. It is obtained by comparing the cost of retaining an employee and the monetary benefits an organisation has ascertained from that particular employee.

When an employee's performance is evaluated from cost accounting method factors like unit-wise average service value, quality, overhead cost, inter-personal relationships and more taken into account.

This is the method that i would suggest for dutch shell performance management system because with the changing environment and changing technology the performance evaluation system should also keep changing to keep an eye on the performance of the organisation as a whole and not on a particular area or on a specific employee.This method analyses in an unbiased way. For the growth of any organisation the main emphasis is to be paid to Human Resource Department because it analyses and interacts with each and every department of the organisation as a whole so keep in view of this aspect , the Human Resource Accounting Method is the best performance appraisal method for the companies like Dutch Shell.

DISADVANTAGES OF HUMAN RESOURCE ACCOUNTING METHOD

• There is no specific guideline for measuring the cost and value of human resources.

• While valuing the Human Assets, demand for rewards and compensation might be higher.

• The nature of amortisation to be followed is yet to be fixed up.

• Tax laws do not recognise Human Assets and in that sense it might be theoritically only.

• It is a difficult task to value human asset.

• Employees and Unions may not like the ideas.

• The life of a human being is uncertain. So its value is also uncertain.

• Human Resource Accounting is full of measurement problems.

• It lacks empirical evidence.