Improving Organizational Performance - TCS and Air India - Essay Example

? Improving Organizational Performance Table of Contents Introduction 3 Comparison, contrast and evaluation of the business case for the use of high performance in the two organizations 3 Difficulties, challenges and implications encountered by the use of performance management in the two organizations 6 Balanced proposals as to how these difficulties and challenges can be effectively managed and responded to at present and in the long run 8 Limitation and shortcomings of the proposal 10 Conclusion 11 Reference 13 Introduction Performance management is a process of appraising the performance of the employees in the organization and ensuring that employee’s performance provide a support to the company’s strategic aims. Performance management not only means meeting the subordinates once or twice a year in order to review the performance, it means establishing the goals, which meet with the company’s strategic aims. It also means continuous interaction with the employees, which will result to improvement in the employee’s capacity and performance. In short, it is a collaborative and a continuous process conducted between a supervisor and employee in order to plan, develop and evaluate employee’s performance. Effective performance management aligns the efforts of supervisors and the employees by helping the employees to perform at their best to reach their goals and ensures that the performance management system conducted with fairness and transparency. Hence, ongoing performance management of the employees helps the organization to monitor the performance of employee’s achievements goals (University of Virginia, 2010). Comparison, contrast and evaluation of the business case for the use of high performance in the two organizations TCS and Air India are two big Indian organizations, which obviously from their diverse sectors have something in common. However, Air India and TCS have been taken to show the contrast as well as the comparison existing between the two organizations in case of performance management systems. Performance Management system in TCS considered as a velocity centre of an organization. In addition, TCS a private sector enterprise and largest IT Company in India, has a full-bodied appraisal system, where appraisal system based on balance score card, which is conducted at the end of the year or at the end of the project. However, in January 2008 the appraisal system was conducted, it was seen that the employees who received a rating of two in performance improvement plan, which was for a fixed period and based on this plan they were given an additional training in order to improve their performance. In the absence of improvement in performance, employees were given the option to resign (Dezzler & Varkkey, (2009). Performance Appraisal is not implemented as a continuous process in Air India, whereas in TCS the employees gain the advantage of receiving the rewards for their performance for a longer period in terms of achieving its goals. The reason behind the high performance of the employees in TCS is that, the employees performance are being appreciated and recognized by their supervisors which leads to bring the improve productivity in the organization. However, the performance of the employees in the Air India compared to TCS is comparatively low. Various kinds of rewards like long service awards and offering performance based annual increment to the high performers, generally motivates the employees to contribute towards high performance in the workplace. In Air India, reward systems generally related to performance, which was first, introduced at the Senior Executive Service in the organization and Senior Officers were considered the detached employees in the public sector. Therefore, according to Mac, there are many public sector firms, which had taken some long steps in rigorous way while dealing with issues related to performance of the employees (Australian Government, 1968, p.17-18). The main motive behind conducting performance appraisal in TCS is based on the performance of the employee’s and its helps the managers to decide and know their growth in pay scale, which is totally based on their performance, dedication & productivity. The appraisal also helps the managers to assess where they are weak and where they should take training to overcome the weakness so they can give their best performance. According to Mr. S Padmanabhan, executive vice president of TCS "Employees here at TCS who are performing at a low CTC does not means he or she will remain as a poor performer for whole life. Therefore, at TCS every employee is having an equal opportunity to bring their increase productivity and take themselves to higher level”. According to S. Padmanabhan, the Executive Vice President of TCS employees who are performing at a low rate does not mean he or she will remain as a poor performer for whole life. On the contrary, in Air India Key Performance Area appraisal, system is conducted once in a month but this appraisal system survived only for three months. The reason behind the declining performance of Air India was the recruitment process and the performance appraisal system. The Key Performance Area appraisal system conducted through planning the performance, then doing a midyear review and annual assessment of the employees and at last providing feedback and counseling. Therefore, today Air India is trying to gain the knowledge from the various industries in response to government services and meeting the needs of the society. In addition, it relies on its employees in order to provide better service to its customers. Air India focuses on gaining the knowledge in response to government services and meeting the needs of the society. TCS focuses on market competition in terms of sales, creating new products whereas in Air India the market competition does not exist since the government controls the revenue of the enterprise. Today in Air India, the government focusing on only handling government budgets but due to increasing, pressure on government budgets, the companies started facing the increase in employee turnover (Vries, 2001, p.1-3). Difficulties, challenges and implications encountered by the use of performance management in the two organizations The problems faced by the TCS and Air India are quite different. In Air India the recruitment process and performance appraisal lead to extreme failure in the organization since the organization was focusing on employing 600 people to run and maintain only one aircraft, which lead to poor cost strategy and low productivity of the employees. Compared to the Singapore Airlines, rated as number one airlines since its focus, was only on cost leadership strategy. Therefore, the employees do not create all the time problems as because they know the limitation of power of the local management. They just go by lethargic type and unmindful of any improvement of the company. Hence, these people do not come to the workplace with the idea that since it is a government organization, we must give the best of the talent. On the other hand, they take all sorts of privileges to the extent available without any corresponding output, which results to poor performance in Air India. That is why public sector firms like Air India and research areas of the government do not shine which lead to low performance in the working environment. Apart from TCS, there are various industries and organization in private sectors, where we can find in small and medium organization the workers suffers the most. As because, they don’t have any unions or standard government labour department like the western countries so they have to work ten to twelve hours a day in order to perform high and receive incentive for the high performance in the workforce. Therefore, the remuneration depends on bargaining basis and the pay structures are too low when compared to government structure, which is another reason of continuous low performance in the working environment. Thus most of the private sector enterprises like TCS, Toyota faces the appraisal problems such as unclear standards are not met which result in unfair appraisals, halo effect that create the biasness among the team, central tendency error which rates all employees average etc. In order to reduce the conflict, the appraisal system need to put emphasize on creating a proper organizational culture and developing different managerial styles that lead to openness among all the individuals and building of trust among the supervisor and subordinate relationships. However, over the years TCS found the reasons behind continuous decline in productivity is the boredom faced by the employees in the organization, which lead to poor performance (Bracal &Associates, 2006). In Air India, the HR department faces the difficulty in measuring and monitoring the progress of the performance since many organizations do not know how to measure the performance based on various attributes and how to utilize the data while evaluating the performance of the employees. They also face the difficulty in creating the benchmark and adding value in day-to-day activities. The mangers of Air India are facing the difficulty to provide better customer service and lack of discipline among the employees. In case of TCS, we can find that due to boredom employees working for more than two years in the same project; his or her performance tends to fall down which is another reason behind the high employment turnover. On the contrary, Air India through Key Performance appraisal method evaluating the recruitment and the staffing efforts in order to reduce the cost behind employee more than six hundred employees. Cost associated with recruitment and staffing efforts is another challenge to compete with the other private sector enterprises since most of the private companies hire consultancies in order to reduce the recruitment costs (Newman, Lepeak & Davidson, 2007, p.5-6). Air India and TCS will face failure in improving the organizational performance if performance management efforts are not associated with the strategic company’s goals and company’s budget plan. By adopting the leadership role, TCS and Air India organization can bring improvement in the performance but the biggest challenge is whether the leadership will help the performance management process to survive in the changing political environment. In order to encourage high performance among the workers, the HR departments of TCS and Air India have to do an extensive research when applying right tools and techniques to improve the organizational performance. Therefore, based on the balance scorecard technique Air India will be able to gathering the data related to employees performance and regular customers. Thus, it helped the private sector enterprises such as TCS, Samsung to analyze and achieve high performance level in the organization. In Air India, the entire thing was opposite; the customers were treated like as if they are the slaves whereas the employees treating the customers like as if they are the owners. Therefore, this kind of quality service has led the enterprise to survive in the global competitive market (National Partnership for Reinventing Government, 1999). Balanced proposals as to how these difficulties and challenges can be effectively managed and responded to at present and in the long run Today TCS and the Air India need to learn and understand the potential problems faced by employees in the working environments which results to poor performance. The management needs to set clear performance expectations among the employees to help the organization achieve its strategic goals. The expected performance must be specific in the sense to provide better service to organization and observable in terms of behavior that can be measure in qualitative way. Therefore, TCS and Air India need to focus on the employee strengths, which lead to contributing high performance in the work. Positive feedbacks motivate and encourage each individual towards high level of performance and receiving better rewards for continuous improvement in the performance. Financial incentives, appreciation from the supervisors for the performance are the strengths of the employees, which leads to organization growth. In addition, constructive feedback approach will bring improvement in the performance, since this approach provides an opportunity discuss openly on the matters relating to poor performance and even sharing their own viewpoints towards their performance. Hence, TCS and Air India needs to identify the reasons behind declining of an employee’s performance, which results to communication gap between the supervisor and the subordinate and loose of faith and trust among each other’s. It is also necessary to keep in mind that manger should help the employees in improving their performance (Weatherill, n.d., p.8-9). However, in order to overcome from the problems such as manufacturing problem, labour problems etc, TCS and Air India can conduct the 360-degree feedback appraisal process, which will help to determine the pay structure of the employees. In addition, the employees will be able to know the reasons behind their low performance. This feedback appraisal method is also useful for managers to assess the performance of the workers and analyzing the training requirements. In the present and the long run, motivating the employees in terms of offering incentives and different kinds of rewards will help the organization in both the sectors to perform at a high rate. The pay structures designed by both the firms, TCS and Air India need to keep in mind that it should be fair and fulfill the needs and desires of the employees. Therefore, TCS and Air India, management would like to see the highest return of capital invested and even the workers do often fight to get the highest by any means whether by ethical or unethical way. Now, here lies the credibility of the professional management where he might be as tough as anything but again he will be too soft when he will be thinking about the employee’s problem as his own. When the English companies used to exist in India, one thing was common to all the employees’ i.e. same pay scale applied to all the organization whether employing fifty employees or two lakhs. Therefore, the CEO will run his HRD in a very smooth way so that the HR department can bring a discipline workforce in the organization. As a result, to increase the high performance work in the organization the supervisory staff and the managerial staff must be faithful to the organization so that each department can help the organization to achieve its mission and vision statement. The production manager will always see that his daily production does not fall below the target and if the production falls on any day, it will be compensated on the next working day by providing incentives in order to work for extra working hours (Mogultay, n.d.). Hence, in this way TCS and Air India can bring a balance in the organizational climate and profitability of the enterprise by using the performance management system. Limitation and shortcomings of the proposal In TCS, the purpose of using performance management system was to assess the additional training needs of the employees in different areas and to determine the HR practices whether properly implemented in the organization or not. Most of the organizations believe that performance appraisal is a time consuming process since the appraisal is conducted upon more than hundred employees or may be below. On the contrary, in Air India, managers do not observe anything since the appraisal is cost effective and encourage only negative reinforcement rather than positive reinforcement. The main problem in Air India is that employees do not follow the rules and regulation. Moreover, lack of discipline is present in the workforce. For example if the working hours is 10a.m to 5p.m, we can find most of the employees leave before the time. Another main difficulty is that most of the employees engage in politics. They prefer political motivation rather than government rules. In a word, the system does not run on its own, we can find appointments are mostly political. In case of TCS employees working for long hours but receiving poor salary package, extreme pressure in the workforce in order to meet the deadlines, therefore these are the things, which lead the employee to perform at a low rate. When we think about salary increment in the TCS usually the time taken will be long compared to Air India where the promotion opportunities and salary increment is faster. Using of performance management creates internal competition in the organization, which leads to mistrust and communication gap between the employees (Waal & Kourtit, n.d., p.3). In TCS, the performance management is used by the mangers once or twice a year but later Air India adopted the tools and techniques of performance management of TCS in order to bring a disciplined workforce. Therefore, in both the sectors we can find that the people have misused it during the time of performance evaluation, which results in poor performance as mentioned earlier. Hence, from the above discussion we can find that in both the sectors, performance management creates negative reinforcement rather than encouraging the employees towards high performance work. Conclusion Performance Management in private sectors like small and medium groups does not find difficulties in the areas of performance. It also acts as an effective tool for both the private and the public sector in order to manage the better performance of the workforce and improving the low performance of the employees. Performance management is a word, which varies from man to man. It emphasizes only on improving the organization performance by applying various interventions like daily meeting with the staff, once a year conducting performance appraisal etc. When an organization wants to improve its quality of workforce, it needs to find the reason behind the poor performance of the employees and encourage the employees to develop new ideas, which in turn will benefit them to receive better rewards in future. The performance management system helps the organization to shape up the behavior of each individual so that they can shift their interest towards serious work rather than engaging themselves into political activities in the workforce. Reference Australian Government. (1968). Performance Management. [Pdf]. Available at: http://www.apsc.gov.au/publications01/performancemanagement.pdf. [Accessed on April 30, 2012]. Bracal & Associates. (2006). Performance Appraisals and Culture. [Online]. 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