Performance Managment: Coca Cola Company, Hilton Hotels Corporation - Essay Example

Introduction According to Chen , performance management is a procedure or a method by which personnel and managers agree on the goals, responsibilities, and the means of attaining organizational success. Besides, it is a process of driving the organizational workforce to attain excellent performance and strengthening the practical management practices within the organization. Performance management is regarded as a fundamental constituent in human resource management. Performance management is established in areas, such as job analysis, which offers a way of establishing responsibilities of some positions through forming indicators for evaluation. Performance management is also a significant aspect of determining the compensation of employees. Moreover, it also helps the human resource departments in organizations to identify the strengths and weaknesses of employees’ performance and subsequently improve on the weak areas (Newcomer & Caudle 2011). This paper evaluates critically the performance management case studies in two different organizations, the Coca Cola Company in India and Hilton Hotels Corp in China with an aim of exploring its effectiveness, advantages, challenges and implications. It will also propose strategies to handle effectively the challenges of performance management in organizations. An overview of Coca Cola Company, India The Coca Cola Company enjoys a large international market in the beverages and soft drinks industry. The company has a goal of creating a world class organization, which operates with excellence to enhance consumer experience, employee capability, organization profitability, and customer satisfaction. Coca Cola effectively links the mission and the visions of the company to ensure that the company functions excellently. The company practices performance management by applying the performance management systems within the organization. It practices performance management by implementing several objectives in their annual business cycle. The annual performance of the employees and the organization is reviewed, the performance for the next year is planned, and high performing employees are recognized and rewarded. In addition, throughout the performance review process, the results are assessed, key performance indicators are set, and the eventual results reviewed. Performance management in the organization includes the yearly appraisal of the job performance of the employees, the processes used to communicate the expectations of the job, and offer continual performance feedback via end year performance rating. As a result, the performing workers are rewarded through promotions, compensation, and additional decisions agreed upon by the company (Herman, et al. 2002). An overview of Hilton Hotels Corp, China Hotel industry is essential business in China because of the role it plays in the development of national economy and the lives of people in the country. The hotel industry in China has progressively grown because of the advances in technology and the large market in China’s population. Competition is very high in the hotel industry in China where the conventional method of competitive products and technologies are replaced with talent competition. Hilton Hotel Corp is competing to break into the hotel industry in China through attracting, training, developing, and retaining the talented workforce. Further, Hilton Hotel Corp improves the work performance of the organizational employees in order to raise the performance of the hotel. The managers play a very important role in the hotel corporation to ensure that high performance is achieved. The Hilton Corp practices performance management via implementation of performance management programs. The hotel intends to maximize its productivity and enhance the value of the shareholders. In order for the company to improve its effectiveness, several innovations have been made in performance management. There is the emergence of new management tools and models of performance management, such as BSC balance scorecard, the KP model, and 360 performance evaluation models. The hotel has also promoted performance management levels within the organization (Chen, Wang, & Chu 2011). Critical Evaluation of the Business Case for the Use of High Performance Organizations Hilton Corps, China The performance management in Hilton Corps is distinctly characterized by mature operation methods and strict systems. In the systems category, the business performance management system is the basis of performance management statements because it is defined in terms of power position and responsibility. The content of the posts in the system statements are detailed and describe powers and equivalent positions that bear the duty of post mail shot organizational performance management. On the other hand, the mature operation methods are used to make it easier for the organization to attain effectiveness in performance management and organizational objectives. As a result, the hotel finds it easier to measure the key performance indicators to evaluate the performance more effectively and efficiently (Chen, Wang, & Chu 2011). Performance management in the hotel has faced challenges in the management of the workforce and assessment of other soft factors. The management personnel and the leading officers establish organizational code of conduct. Subsequently, the employees in the organization control their behaviour based on the code of conduct of the staff (Smither & London 2009). Through this initiative, the hotel can gauge the areas they have done well and those that they need to improve on. The staff body at the hotel has set out criteria used to assess the effectiveness of the management personnel. The performance management system of the Hilton Corp is a systematic process. The hotel, through the values of the organization, emphasizes active employees’ participation and excellent management offered in form of proper establishment of the working environment (Chen, Wang, & Chu 2011). The human resource department within the organization maintains a continual communication with the organizational employees according to the performance plans implemented under performance assessment. The performance evaluation and assessment of the hotel is an annual process, more specifically carried out as end year appraisal. The assessment feedbacks in terms of poor performance of the workforce are used as a reminder of the set targets and are used to correct, facilitate attainment of the organizational performance targets. The end year performance evaluation of the management personnel is an important element linking the organizational workforce assessment and the goal to be achieved (Chen, Wang, & Chu 2011). The hotel carries out self-identification of its employees by fill out of personal qualification records. In addition, the managers evaluate the organizational employees who subsequently assess themselves. Both the personal views of the staffs and the views of the managers are considered in evaluation and are expected to corroborate. In case of any deviance, sufficient reasons must be given. The results of the performance appraisal in the hotel are used to reward the organizational workforce in terms of salary increments, training of personnel, effecting promotions, and enhance career development (Chen, Wang, & Chu 2011). Coca Cola Inc, India Performance management in Coca Cola Inc is implemented through formulation of organizational goals at different levels; from personnel level to organizational level. The company carries out monthly review of the set targets to check the progress of the implementation. Each department within the organization is tasked with the responsibility of reviewing the performance of the employees and the department against the set targets. Further, during the middle of the year, the organizational goals are realigned and new policies can be designed to help in attaining the set organizational goals. Eventually, during the end of the year, final reviews are done; checks and balances performed, and the actual feedbacks are equated to the defined targets to measure the results. Consequently, the company uses the results from the end year review with greater optimism and productivity to reward the high performing employees. The organizational rewards for high performance management by the employees include promotions and salary increments (Bacal 2011). The performance of the employees and the company in general requires monitoring and considerable direction from the managers in the company (Cardy & Leonard 2011). The pay system of the managers in Coca Cola is highly related to their performance. The human resource management in the company agrees that payment and rewards ought to be given to the employees based on their performance to eliminate cases of bias and ambiguity. Comparing the Performance Management in the Case Studies Both companies use key indicators or key areas as measures and targets for the employees in their duties. The performance appraisals are carried out annually where the individual performance is gauged against the set target to quantify and assess the performance level of the personnel (Pulakos 2009). The end year results of the assessments in both companies are linked to organizational performance. The managers in the two companies are significant elements in the process of performance management. The managers are tasked with the responsibility of monitoring and directing the process of performance management. Similarly, the results of the employees end year appraisals, in both cases, are used to reward employees through salary increments, promotions, and offering career development opportunities for the high performing individuals in the organizations (Cokins 2009). The Contrasts in Performance Management in the Case Studies At Hilton Corps, the performance management criteria involve both the employees and the line managers evaluating the performance of each other. The employees have the opportunity of evaluating their managers as well as performing self-evaluation (Armstrong & Baron 2005). The different evaluations are expected to present same conclusions unless valid reasons are presented. However, at Coca Cola, the departments have the responsibility of reviewing the performance of each employee. The employees within the organization do not have the opportunity of assessing their managers and departmental heads. Moreover, Coca Cola has monthly and mid-year reviews of the workers’ performance to align the results of the performance with the organizational goals and design new policies that may be helpful towards achieving the final year goals and targets (Luecke & Hall 2006). In contrast, at Hilton Corps, evaluation, and assessment of the performance of the employees is carried out only once, during the end of the year. Critical Evaluation of Performance Management in the Case Studies The human resource management practices are used with other combinations of innovation within organizations to influence high performance in employees. The management of these organizations provide their employees with certain degree of control and have established various progressive methods to increase the welfare of the employees in the company. Such approaches include reward systems besides improved training and development to motivate the workforce towards achievement of higher goals (Ramsay, Scholarios, & Harley 2000). The organizations use communication as important tools and strategies to revise and change their expectations. The performance management in these organizations significantly relying on evaluation and monitoring practices carried out by the management. The communication between the organizational employees and the managers improves the design of the systems (Marsden 2007). Organizational managers who evaluate the performance of employees may be biased in their assessment. Biasness can negatively affect performance of an organization and also organizational employees. The ratings of an employee’s performance are affected negatively by the biasness which has a capability of influencing the future incentives given to high performing employees. The biases affect employee performance, and performance improvement (Rolstadas 1995). The managers and organizational leaders in charge of incentive design need to understand effectively the performance implications and the causes of biasness during performance review because this knowledge is important in determining how much discretion to give managers involved in performance-based compensation plans. As a result, this may lead to enhanced incentive contracting in organizations (Bol 2011). Organizational effectiveness can be measured and fostered through managing of the organizational members’ performance. The ability of a company to meet its set goals is directly linked to the effective performance of the staff members in management and service delivery within the organization. The human resource functions are progressively becoming essential elements in shaping organizations (Paladino 2011). The organizational managers control organizational performance by influencing the inputs, such as skills, and the results offered by assessed outputs. The eventual objective of the performance management in organizations is parallel to the individual performance of the employees with the performance of the organization (Seiden & Sowa 2011). Following the analyzed case studies, it is evident that performance management supports the concept that people and not only capital provide companies with a competitive advantage in their businesses. The role of performance organization in companies therefore, is to transform the human resource’s raw potential into effective performance by eliminating the intermediate obstructions, motivating, and invigorating the workforce (Halligan, Bouckaert, & Van Dooren 2010). Building strong organizational personnel, managing them effectively, and developing them can improve the competitive ability of an organization. Excellent organization performance depends on the culture of the organization. A strong and positive organizational culture can influence a low performing employee to perform brilliantly, but weak culture possibly de-motivates high performing individuals (Mujeeb & Ahmad 2011). The Practical Difficulties, Challenges, and Implications Encountered By the Use of Performance Management in Organizations Establishing and setting the desired performance indicators was a challenge to the companies. Establishing key performance areas or indicators is an essential element in the process of performance management. The performance indicators are the pointers to the targets and act as a guide to the organizational employees (English & Lindquist 1998). The companies face difficulties in choosing the performance indicators. Some indicators are offset to the strategic objectives and goals of the organizations because they do not correctly represent the objectives of the organizations. The established indicators may fail to direct effectively the organizational employees towards dedicating their efforts to fully achieving the strategic goals of these organizations (Chen D. 2011). Effective communication between the organizational employees and the managers is also a challenge that these organizations encounter. The organizations need to design performance indicators used for performance appraisal of the employees. However, the managers, at times, do not effectively communicate with the workers and the performance appraisals including personal favours and disfavours of some organizational leaders (Cadwell 2000). This behaviour negatively influences the employees to take the appraisals passively without initiatives and interest for participation. This negates the goals and the efforts made to realize the aims of the performance management process (Chen D. 2011). The employees’ attitude towards performance appraisal process is a challenge in the process of performance management. Some employees within the organization mistake the performance appraisal as a demonstration of non-confidence by the organizations towards the low performing personnel. The employees perceive performance management as a tool used by the organizations to monitor and restrain them, indirectly punishing them, and subsequently reducing their payments (Rao 2004). The organizations receive some mild form of resistance from the personnel in terms of implementing various performance management processes and practices. This is because of the ineffective communication between the managers and the workers, resulting in misunderstanding between these factions. Some employees argue that the managers do not record their daily performances at work and therefore do not have sufficient evidence for the scoring employees. This type of politics in the performance management reduces its effectiveness and the desired results are not easily achieved (Krausert 2009). The problems faced by the employees in their daily activities are not effectively communicated to the managers in time to seek improvements, guidance, and help on how to tackle them (Chen 2011). Both organizations do not effectively offer training to the low performing employees as per the appraisal results. The organizations do not offer regular trainings for their employees on the theories of performance management to ensure the personnel understands the goal of the process and help in accomplishing it. Some workers within the organizations perceive that performance management is all about completing performance appraisals. These organizations do not pay adequate attention to results of the performance appraisals. This is because the outcomes of the performance appraisals in performance management demonstrate the strengths and weaknesses of the workforce. The organizations ought to use these results to offer relevant trainings to employees to update their work methods, enhance their performance at work, and assist the personnel in attaining progressive development at work (Chen 2011). Proposal on How These Practical Challenges Might Be Effectively Managed The organizations ought to confirm their strategic objectives and goals to help in establishing effective performance management. The strategic objectives of an organization are basic elements of the organizational strategy, which is the reason for a company accomplishing its mission and strengthen the organizational mission in some fields. Performance management in organizations ought to be in line with the strategic objectives of an organization. Eventually, performance management should aim at improving the effectiveness of the business process (Halkos & Tzeremes 2009). The organizations should, therefore, design clear strategic goals and objectives, which can further be decomposed into strategic departmental and position objectives to be used in performance management through performance appraisals. On resolving the challenge of setting performance indicators and communicating with the employees, before designing the performance indicators, the managers should communicate effectively with the organizational employees. They should seek their views, and invite employees to participate in the design process, in place of delivering their individual made decisions from top to bottom of the hierarchy. Ambiguous and subjective contents should be eliminated in the appraisals. The indicators must reflect the overall values, philosophy, employees’ quality, and the business needs of the organization. The performance appraisal system should, thus, help the organization in making salary increment decisions, improve work productivity, and help in developing the organization (Bourne, Mura, Franco-Santos, Pavlov, Martinez, & Lucianetti n.d). The elements of organizational performance management are best if they include reasonable and effective incentives. The outcomes of the appraisals should be used to help the workforce to be better employees in future. Besides the link between compensation and the appraisal, there should also be an emphasis on other incentives. Emotional incentives for instance, improve the solidarity and cohesion of an organization (Butler, et al. 2004). Effective performance management involves establishment of organizational strategic objectives, effective communication, and feedback, and appropriate use of the appraisal feedbacks. Quality of both the organizational employees and the managers influence the success and effectiveness of performance management (Biron, Farndale, & Paauwe 2011). Potential Limitations or Shortcomings of the Proposal The implementation of the proposal may lack organizational support it requires to succeed. Since the proposal is a document that affects the entire organization, management, and all employees need to give their support. Without the support of all the needed stakeholders, its success is not guaranteed (Biron, Farndale, & Paauwe 2011). Financial support and assistance needed in effecting and implementing the said changes in the proposal. The management of the organization may not approve the proposal and fail to allocate adequate material and financial resources to actualize the proposals within the organization (Biron, Farndale, & Paauwe 2011). Last, organizational politics may negatively influence the proposal’s implementation. Factions may occur within the organization, others supporting the recommendations whereas others against them. Politicizing the matter may affect the objectives and the goals of the proposals, which may end up failing to meet the desired changes as proposed (Newcomer & Caudle 2011). Conclusion In recent past, organizational managers throughout the world have supported the concept of performance-based management in organizations. This is to enhance program and policy decision-making, accountability, and service delivery’s efficiency. There has been inconsistent feedback about the effectiveness of performance management in organizations regardless of its increasing interest in organizations. 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