The Role of Personal Development Plans, Dissertation – Literature Example
Words: 4935Dissertation - Literature
One cannot imagine the modern professional life without individual development. Individual development plans (IDP) or personal development plans (PDP) (in this paper, the terms IDP and PDP are interchangeable) have become essential action plans based on the person’s reflection, awareness, and planning for individual development within a different context: education, career, and self-improvement. In the business context (for example, a business organization, company, or enterprise), PDPs reflect an employee’s aspirations, professional interests, competencies, strengths, and career goals. For this reason, IDPs occupy an exceptionally significant role in different workplaces.
It is necessary to discuss several crucial points and issues in the present literature review. Through the authors’ books and articles concerning the research problem (the effectiveness of IDPs in the workplace), one may get to know all necessary information about the history of PDPs, their role in a business world, and connection with financial success. The researchers’ opinions about PDPs help to evaluate the effectiveness of these action plans from different perspectives that exist in the workplace. In addition, the literature review reveals the different ways of annual raises: however, only one of them is relevant for the present paper. Finally, the review presents a research value for the present study ecause it reflects all essential points of the work needed for further analysis of the problem.
The History of Personal Development Plans, and their Essence for Employees and Business Organizations
Many authors in the relevant literature have discussed the history, role, and peculiarities of IDPs in the workplace. The need for PDPs is primarily rooted in the education system that has always been interested in the student development. Student person development planning became an ordinary practice in higher education of the most countries. For example, in the UK, “the change agenda has been driven by state” through higher education (Välimaa et al., 2006, p. 232). In the school, teachers became to emphasize the necessity for PDPs as those documents that help to form valuable skills in a personality. A PDP became a reflective practice in higher education pedagogy. Välimaa (2006) noted that in the end of XX century, an IDP was “presented as an aspect of student learning which entails student thinking about, discussing, recording and learning from their own practice (academic and otherwise) so as to gain new perspectives and approaches to future practice” (Välimaa et al., 2006, p. 233).
Besides, higher education institutes have always encouraged students’ creativity, self-awareness, critical thinking, motivation, self-direction, and interpersonal competence. In addition, educators implemented PDPs in business degree implementing. Nowadays, students’ portfolios and diaries are proposed as suitable tools that encourage personal development. These portfolios focus students’ attention on the domains of learning, knowledge and skills that can facilitate the achievement of professional goals. For this reason, PDPs entered in the educational system as an essential practice aimed to prepare a student for a future professional life (Välimaa et al., 2006).
Since the 80s of the last century, there appeared “key skills” movement to meet employer demands (Välimaa et al., 2006, p. 232). The field of graduate improvement became to support PDPs because IDPs cultivate in young people the accurate sense of their identity, and aim them to the development of required competencies and key skills. Today, the education institutions and recruitment agencies continue to develop the idea that post-graduate students should learn how “to sell themselves” to potential employees with the help of IDPs (Välimaa et al., 2006, p. 234).
The curriculum of the US universities and colleges implies students’ PDPs designing as well. For the teaching staff and students, “it may be useful to reflect on the perception of evaluation of training and development in higher education” (Thakwray, 1998, p. 133). Educational developers agree on the assumption that a PDP plays a highly essential role in student’s self-evaluation. Besides, an IDP makes a person think of the skills, knowledge and expertise he or she may offer the world. A student should perceive a PDP as the evidence of the lifelong progress. Designing PDPs, a student may see what is achieved and what should be achieved to meet personal or professional goals (Thakwray, 1998).
When PDPs appeared in the education sphere, they soon moved into the employment field. HR managers considered them as the essential personal documents that enhance adult learning and development in the workplace. It is believed that a PDP provides a learning action plan for which employees are responsible with the support of their organization (namely, managers). In the end of XX century, personal development learning, as an effective HR management practice, rooted itself in the workplace. Business organizations became to encourage preparation and implementation of employees’ IDPs (Armstrong, 2006).
According to Benson’s article (2004), a corporate sphere, business management, and company’s leaders have always been interested in employees’ career development. Nevertheless, the necessity for effective PDPs grew when business entered into the era of tight economy (Benson, 2004). It was the market economy (appeared and developed in a post-war time, in the second half of XX century) that made business leaders pay attention to employees’ PDPs. Since the end of the last century until nowadays, challengeable conditions of tight market economy change the face of the job market. It became obvious in XXI century that the tough economic environment requires particular expertise and personal qualities from employees. The success of job seekers, employees, and organizations relies on the individuals’ skills, goals, career ambitions, and needs. Benson (2004) noted:
“The key to that success is knowing the hot areas for potential career growth, and how to set your strategy – being flexible to economic changes, knowing how to pitch your skills to harmonize with trends, and always keeping your mind on career development” (Benson, 2004, p. 62).
In XXI century, recruiters think that job seekers should rely on their expertise, not particular industries. For this reason, Benson (2004) believed that “skills are transferable” (Benson, 2004, p. 62). However, every industry has such important areas as sales and marketing, finance, technology, and operations. Therefore, employees’ expertise in these core areas is essential for different organizations. At the same time, in the context of new dynamic economy, international business became extremely popular sphere. Benson underlines that the business area demands not only the relevant educational background, but employees’ competence in various spheres (namely, in finance, marketing, and management) and skills (especially foreign language and communications skills) as well. The author of the journal article (2004) concludes that young professionals need to design their PDPs that should be frequently checked (Benson, 2004).
Boer (2006) believed that personal development is an indispensable and integral part of life and work. PDPs exist either “in the form of structured continuing professional development plan…or simply a person action plan designed to improve your own skills, experience and career aspirations” (Boer, 2006, p. 6). According to the author, SWOT (the abbreviation from Strengths, Weaknesses, Opportunities, and Threats) analysis matrix proves to be very helpful as it assists in creating good IDP.
SWOT concerns four basic aspects of environment and individual characteristics: strengths, weaknesses, opportunities, and threats. SWOT refers to internal and external aspects of personal profile: strengths and weaknesses are considered the internal aspects; opportunities and threats are external ones. The matrix should reflect one’s strengths and weaknesses in terms of personal skills, experience, and attitude. At the same time, one’s opportunities and threats should be considered in terms of different factors: the sector or industry in which a person works, his or her capabilities, aspirations. With the lapse of time, a person tends to accumulate new knowledge, gain new experience, and improve skills. Thus, this SWOT matrix is a flexible document because one should revisit and update it (Boer, 2006).
Sometimes, one may need a PDP based on particular timescales and goals. Boer (2006) offers to use the template that presents the structured areas that give answers on the essential questions. For example, it should include the objectives, the tools and supportive resources used by a person to achieve the goals, a successful criteria that should be followed, and timescale needed to complete the plan (Boer, 2006).
PDPs are an integral part of HRM, interested in the creation of learning and development strategies. Organization’s managers should encourage the development of employees, and support them in this process. Mayo (2004) noted that an ideal manager-developer is characterized by “ensuring each person has a personal development plan that is realistic and agreed” and “providing time and money for agreed development plans to be implemented” (Mayo, 2004, p. 88). It means that a manager-developer is responsible for successful realization of an employee’s PDP. The author underlined that “the wheel of people development” relies on several stakeholder groups that participate in the complex process of human resource development (Mayo, 2004, p. 89). They are the following ones: managers, learners, senior management, suppliers, subordinates, and learner colleagues. Systems thinking reveals the value of the groups’ different roles, and their connection in the achievement of the common goal. Following systems thinking, each of these groups should be perceived as a separate part that interacts with other ones.
According to Crown Business Group (2006), the business environment of XXI century is focused on particular employees’ skills. Among the numerous necessary professional and personal skills, nine following skills are pointed out: communicating, planning, monitoring, decision-making, information management, problem solving, leadership, evaluating, and consulting. In order to achieve excellent performance in these areas, one should take into consideration some crucial points. The Crown Business Group (2006) offers its advice on what practices may lead to the mentioned skills needed for excellent performance in the business environment. For an employee, it is necessary to
- obtain information on customers and competitors and actively use the information to support your business;
- monitor and evaluate trends and developments inside and outside the business;
- identity and prioritize the strengths, weaknesses, opportunities and threats of the business;
- explore and assess a range of future scenarios that your business may operate in;
- organize information and knowledge in a way that supports effective planning (Crown Business Group, 2006, p. 2).
These practices are of high value for those employees who want to gain necessary skills needed for the business organizations. Besides, the Crown Business Group (2006) drew attention to the strengths appreciated in the modern business sphere. The list of skills one may excel in includes strategic and systems thinking, negotiating, risk management, learning, managing conflict, etc. Nevertheless, even if one has all these skills and strengths, he or she needs to practice different ways aimed at personal improvement and development. For example, it is believed to be very helpful to promote equality and diversity, encourage innovation, develop working relationships, and implement positive changes (Crown Business Group, 2006).
An effective IDP is a part of effective succession planning (enables an organization to identify, develop employees, and encourage them to fill important business positions in a company), talent management (the process of attraction of skilled workers, integration of new workers, and retention of the current workforce to meet business company’s objectives), and the learning process. Rothwell (2010) believed that an IDP “results from a comparison of individual strengths and weaknesses on the current job and individual potential for possible advancement to future key positions” (Rothwell, 2010, p. 249). Personal development plans suppose learning contract; in other words, a PDP proves that a person agrees to learn. Contract learning seeks a balance between individual career needs and organizational interests. In this context, the theory of adult learning should be examined in order to understand why individual development planning is inseparably connected with learning.
Adult Learning Theory
For Merriam (2010), adult learning is a lifelong education practice. Even after graduation there is always something to be learnt by an adult person for his or her life and work. The workplace may become a lifelong learning center for an employee who needs to improve professional skills and expertise that allow adapting to changes in the job environment. The theory of adult learning can be understood from this perspective. Merriam (2010) noted that learning experience helps adults to learn something new. Besides, special learning programs carried out by different organizations enable employees to gain new knowledge, experience, competence, and develop their personality. Any workplace is full of cognitive operations making an individual to perform different operations connected with complex processes: synthesis, analysis, memorizing, etc. It is essential to remember that most of the company’s employees learn through their direct experience. Direct experience is believed to be a critical component of adult learning (Merriam, 2010).
The adult learning theoryxplains how adults gain new skills and information. According to Knowles (2005) and Vella (2004), it “focuses on the idea that adults learn best when they talk to others about their life experiences and relate these experiences to the learning process” (‘Adult Learning Theory’, n.d., p. 2). Thus, to benefit from personal experience is a key to successful adult learning. However, it is necessary to identify principal adult learning factors that provide adults with all conditions for effective learning, namely, respect, immediacy, safety, engagement, and relevancy.
First of all, adult learners need to be respected, and free to decide what exactly they should learn. Immediacy refers to the idea that adult learners need to see immediate usefulness of their learning; for this reason, they should not waste their time. The next factor, safety, suggests the idea that adult learners should feel safe learning environment: positive, trustful, and comfortable atmosphere. Besides, one should know that adults do not like to be judged or depicted in an unfavorable light; instead of it, they want to be affirmed and recognized. Then, adult learners need to be actively engaged in the learning process (participate in all learning activities, discussions, etc.). Finally, learning should be relevant to the adult learners’ lives and personal experience. The learners need to have an opportunity to apply everything they learnt to their work or family lives (‘Adult Learning Theory’, n.d.).
Besides the mentioned factors, there are some other things that ensure effective adult learning. According to Knowles (2005), an adult learner should be motivated. In this context, there exist such concepts as “intrinsic value” and “personal payoff”; they provide a person with strong motivation (Knowles et al., 2005, p. 4). Each person sees different intrinsic value in the learning process: an opportunity to practice theoretic knowledge in a real life (family, work, or private lives), to increase one’s erudition, to improve and develop the self, etc. Moreover, “adults tend to be more motivated toward learning that helps them solve in their lives or results in internal payoffs” (Knowles et al., 2005, p. 149). However, it does not mean that external payoffs (for example, salary increase) are not important for an adult. The most valuable internal payoffs are new skills and knowledge that should lead to person’s success.
Only motivated learners are able to make positive changes in their lives. According to the adult learning theory, people can be involved in either active or passive learning. Passive learning enables a person to gain information by hearing, seeing, or reading something. Nevertheless, it is the least effective method of learning because “we tend to forget much of what we learn passively” (‘Adult Learning Theory’, n.d., p. 7). Only active learning leads to desirable results. By participating in discussions, performing a role play, and helping colleagues and friends to learn, an adult is actively involved in the learning process. One may agree that “we tend to remember most of what we learn through active learning” (‘Adult Learning Theory’, n.d., p. 7). Thus, engaging employees in active learning, an organization increases the quality of their performance that will influence the company’s success.
A successfully realized PDP influences an employee’s financial status. Often, companies tend to award successful employees with pay raises. With the help of special pay systems, on organization rewards personal development with pay development. For example, some organizations apply a “pay-for-performance” system (Lipshitz et al., 2007, p. 154). Following this system, an employee gets his or her pay for excellent performance. Sometimes, pay raise is accompanied with promotion that influences an employee’s salary and life quality. In its turn, it motivates an employee to improve the professional and personal identity further. Designing of new IDPs, active involvement in continuing learning, gaining new skills and knowledge and other elements constitute a lifelong development process of a personality.
The Connection of Personal Development Plan and a Merit Pay System
There are several pay systems in the world for organizational employees. The first way for a pay raise is through cost of living adjustment or allowance (COLA): it “is a non-taxable supplemental pay allowance, designed to offset overseas prices of non-housing goods and services” (The Defense Travel Management Office, 2011, p. 1). In other words, COLA is an extra pay or stipends provided to service employees in different organizations. This non-taxable pay is given in addition to their base pay. Being a standard, COLA equalizes purchasing power of people in such a way that an employee who is temporarily relocated may buy goods and service of the same level. However, in the context of the present paper, another type of a pay raise is relevant to the topic.
The second way of a pay raise is a merit pay or a performance-related pay. Usually, those organizations that use a performance-based pay system welcome this type of a pay. If the employee’s job is effective, he or she gets bonuses for good performance. There are some reasons for a merit pay system in organizations. For example, according to economic and psychological theories, “the linking of pay to performance should lead to improved performance because motivation is increased. In turn, this increase in performance helps organizations maximize profits” (Heneman & Werner, 2005, p. 53). Nevertheless, merit pay may have its own potential pitfalls. These drawbacks include decreases in self-esteem, perceived equity, satisfaction, cooperation, and even intrinsic motivation (Heneman & Werner, 2005).
As it was mentioned, a PDP has a certain relation to pay raises because it may reflect a person’s individual working success. If a PDP is an individual plan that describes a person’s strengths, weaknesses, goals, aspirations, etc., merits should be an important reason for a pay raise. In other words, an employee’s well-realized IDP may lead to a merit pay and promotion by reason of a person’s qualities that contribute to organization success. In Redman and Wilkinson’s book (2002), it is said that performance-related pay “has historically been seen as a way to incentivize white-collar workers” (Redman & Wilkinson, 2002, p. 190). In this context, the COLA index does not take into account employees’ merits. Following this pay system, an employee gets an additional pay to the base pay in accordance with the established order. However, an employee’s performance-related pay means that he or she is worthy in the organization, and deserves a reward for high working results.
A performance-related pay (or a merit pay) system rewards employee’s performance; it is not an incentive pay scheme aimed to stimulate employee’s performance. Since its appearance in the 80s of the last century, a performance-pay system has served to develop a performance-oriented culture. Traditionally, this pay system has oriented to the workers which associate themselves with corporate culture and goals. The annual increment, linked to an employee’s performance is a common form of a merit pay system (Redman & Wilkinson, 2002).
Such things as effort, initiative, attendance, time-keeping, and PDPs can be included in the criteria used to measure employee’s performance and merits. Redman and Wilkinson believe that “this type of pay system can help to maintain employee morale in flatter organizations when it is not always possible to reward good performance with promotion” (Redman & Wilkinson, 2002, p. 190). Pope (2005) noted that a merit pay system was created to attract and retain high performers through merit pay increases and individual incentives. However, this system may demotivate current employees. For this reason, merit pay programs often fail. Nevertheless, it is this pay system considered most effective when an organization wants to give a successful employee an incentive to improve the quality of work. In this context, a merit pay system usually appears when organizations pay attention to PDPs that are indicators of employee’s development and reflect his or her real performance (Pope, 2005).
It is necessary to examine a PDP in the context of a merit pay system to understand how it may influence an employee’s deserved pay raise. According to Redman and Wilkinson (2002), PDPs or IDPs have become popular in recent years in organizations that encourage self-development of their employees. Although they are “the documentation emanating from self-development initiatives”, they are welcomed by every organization (Redman & Wilkinson, 2002, p.190).
A PDP supposes that an employee should complete his or her development action plan. Of course, personal development is a complex process that may include training activities, self-study, project work, action learning, distance learning, secondments, etc. Although a PDP is an individual’s responsibility, HRM supports the process of individual development among workers in organizations. For example, HR managers may take on mentoring or coaching role (Redman & Wilkinson, 2002).
The role of PDPs within an organization cannot be underestimated. PDPs are a part of the appraisal system of a person. They are person-centered, and concentrate upon career and life issues. However, “the degree of organizational intervention in PDPs is variable” (Redman & Wilkinson, 2002, p. 191). There is an opinion that some tight organizations control individual issues, and do not support self-managed learning and the spirit of self-development. Nevertheless, most of modern organizations welcome a PDP approach. The introduction of PDPs is a voluntary and a well-considered process. All necessary information about PDPs, their values and advantages for corporate individuals should be given to the organization’s employees in details. Besides, the issues of honesty and confidentiality should be addressed. A PDP approach is full of benefits for both an employee and an organization. Consequently, the employees should be well-informed about the role of PDPs in a corporate sphere (Redman & Wilkinson, 2002).
Although the PDP approach has become a valuable part of learning organization philosophy, there are some arguments against employees’ PDPs. According to some opinions, the effectiveness of PDPs cannot be truly evaluated. Besides, there is an assumption that individual goals cannot contradict organizational ones. It sounds rather naïve; nevertheless, many modern organizations consider PDPs an effective practice that has become a part of learning organization ethos. Redman and Wilkinson (2002) believe that this ethos “implies that individuals and teams are consistently looking for better ways of doing things, may require a formalized approach such as PDP to capture enthusiasm and good ideas” (Redman & Wilkinson, 2002, p. 191). The following best practice of successful performance management proves the positive effects of PDPs in the context of a merit pay system. Pope (2005) studied the case of Wisconsin’s Gustave L. Company that practices performance management following four main steps (Pope, 2005).
The first step of the performance management process is called “performance planning” (starts in October, and lasts till the end of December) (Pope, 2005, p. 5). During this period, an employee and a manager draft a performance plan for the forthcoming calendar year. They need to identify core competencies that relate to the organization success. Also, they agree on an employee’s PDP, goals, and specific expectations (Pope, 2005). A manager in this case plays a role of a mentor for an employee who provides on-the-job guidance that supports to the completion of the developed PDP. Usually, a mentor is a more-experienced worker of the company; he or she is more expert in a specific area.
The following step is a “performance evaluation” period (starts in January, and lasts till the end of February) (Pope, 2005, p. 6). One or two weeks before the formal meeting, an employee should submit the self-assessment form to the manager. Then, the manager prepares evaluation form that allows evaluating the company’s employee on personal development goals, skills, performance goals, and core competencies. For each company of the review, there is a performance score needed to be calculated (1 to 5). In a formal one-hour meeting, the manager and company’s employee discuss the evaluation. Also, the manager determines a merit increase in accordance with the evaluation of the employee’s performance. This point is not discussed with the employee, but he or she gets a performance pay raise resulting from successful performance and merits considered as positive outcomes of a well-developed and agreed PDP (Pope, 2005).
The third step is marked by the so-called “merit pay review” (takes place in March) (Pope, 2005, p. 6). The brief meeting held by the manager is dedicated to the discussion of the employee’s merit pay increase. Although it becomes effective only in April, the merit pay review gives the employee an opportunity to discuss the following forms of compensation: benefits, incentives, etc. (Pope, 2005).
The last performance management step consists in the year-round “performance review meetings” (Pope, 2005, p. 6). They occur on an ongoing basis throughout the performance review cycle. These meeting give an opportunity to discuss different issues of importance (for example, employee’s progress on performance goals). Usually, performance review meetings occur on a quarterly basis, and last nearly 30 minutes. An additional component of this company’s system is optional 360-degree evaluations based on 31 employee’s core competencies. The results of this evaluation system can be added to an employee’s overall performance evaluation score (Pope, 2005).
In the modern HR management, the connection of PDPs and a merit based pay system is evident. A well-developed IDP leads to employee’s professional development through certain activities. In its turn, the success of an employee influences the overall organizational success. A PDP is a beneficial process for both a company and an employee. On the one hand, an employee achieves individual goals, improves performance, and gains new skills and invaluable experience; on the other hand, a company maximizes its profits and achieves organizational aims. For this reason, strategic HRM is inseparable from performance management. Performance management is interested in employee’s rewards, career development, and promotion (Taticchi, 2010).
Taking into consideration everything mentioned, one may see that performance appraisal is an effective organizational practice aimed to identify and reward talented workers and high performers by providing them with annual pay raises or promotions. Naturally, PDPs play an extremely important role in this process. Moreover, employee’s personal development has a positive effect on the organizational development. In Jensen’s article (1997), the author underlined that
“performance appraisal can promote both the institutional development of the organization and the personal development of the people working within it. Integrating personal goals and organizational goals is an elusive but desirable objective, especially at a time when many workers feel alienated” (Jensen, 1997, p. 2).
Undoubtedly, performance appraisals encourage employees’ career growth and development. The performance appraisal system suggests the idea that advancement is related to performance. To show good performance, it is necessary to develop a detailed PDP. When the IDP is successfully realized, an employee has the right to expect a pay raise or promotion. Good performance is rewarded with a merit pay resulting from employee’s work quality that contributed to the organizational success. Jensen (1997) noted that an automatic pay system with scheduled salary increases helps identify “unsatisfactory employees who demoralize others” (Jensen, 1997, p. 3). Well-developed PDPs lead to high performance and employee’s financial success.
One cannot but agree with Jensen’s (1997) assumption that a merit (or performance related) pay system maintains employees’ intrinsic motivation that stimulates them to further professional development. In this context, different organizations should use a performance appraisal system. In addition, HRM of such companies relies on PDPs of their employees (Jensen, 1997). A PDP shows the individuality of an employee: the person’s strengths, weaknesses, opportunities, skills, and aspirations. An IDP is embodied in an employee’s gained skills and real actions aimed to achieve both personal and organizational goals. At the same time, well-developed and realized PDPs are connected with employee’s salary progression. It is thus obvious that a merit pay system is an effective tool of organizational HRM. Thus, a PDP occupies an extremely essential place in a merit pay system aimed to reward and motivate talented workers and high performers interested in personal and organizational growth as well as development.
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