A strong and effective performance management system “enables a business to sustain profitability and performance by linking the employees' pay to competency and contribution. It provides opportunities for concerted personal development and career growth. It brings all the employees under a single strategic umbrella. Most importantly, it gives supervisors and subordinates an equal opportunity to express themselves under structured conditions”. (Slideshare, 2012)
Freeport-McMoRan needed a performance management system because of the change in the market in 2006. In today's business environment, the companies with strong business performance have strong performance management. When developing a performance management system, Freeport-McMoRan should “make it sure that the system is not too complex and easy to implement and cost administer, is completely understood and considered fair by the employees” (Heathfield, 2013), and should be closely aligned with the organizational mission, vision and goals.
I do not think that a pen-and-paper performance management system would be as effective as the electronic system that Freeport-McMoRan adopted; mostly because they employ nearly 30,000 workers over four different continents. In a time of fiscal responsibility the cost alone to gather, quantify and report would be fiscally irresponsible. By going with the electronic system they obtain a fuller response and in real time. The cost is negligible and they only have to hire a few analysts to present the data obtained.
Total reward systems can be used to identify the quantum and type of rewards that will prove to be the most effective in terms of motivating and driving the performance level of employees. For example, employees at lower levels will be driven by monetary awards such as incentives and bonuses while senior employees will be more motivated by rewards such as recognition, paid holidays, etc. An extensive
References: Freeport-McMoRan. (2013). Who We Are. Retrieved Aug 29, 2013, from http://www.fcx.com/company/who.htm Heathfield, S. M. (2013). Performance Management Process Checklist. Retrieved Aug 29, 2013, from About.com Human Resources: http://humanresources.about.com/od/performancemanagement/a/perfmgmt.htm Martin, J. (2008). Human Resource Management. London: Cengage Learning. Price, A. (2011). Human Resource Management. Hampshire: Cengage Learning. Slideshare. (2012, Mar 31). Retrieved Aug 28, 2013, from http://www.slideshare.net/tsheten/performance-management-system-12238903 Snell, S., & Bohlander, G. (2013). Managing Human Resources. Canada: South-Western.