Rethinking Performance Management - Essay Example

? Rethinking Performance Management AFFILIATION: Table of Contents Table of Contents 2 Introduction To Performance Management 3 Implementation of Performance Management System in an organization 8 Performance Management: Foundations 10 Leadership and Managerial Styles 10 Key Elements of Performance Management Process 11 Reflections on my developmental needs 15 References 17 Introduction To Performance Management Businesses now-a-days are affected by many factors such as globalization, increased competitions, changing age and competency profile of the employees. There are some functions which are immune to such changes but the Human Resource department of an organization has to proactively respond to such changes as human capital is recognized as a valuable asset which has a significant impact on an organization’s sustained competitive advantage (Burke and Cooper, 2008; Millmore, 2003; Sriprabba and Krishnaveni, 2009). To achieve competitiveness, two things are very important i.e. managing the efficiency plus building employees skills, abilities, capabilities and behavior. To improve performance at the organizational level it is essential to create a culture and situation of continuous learning of employees and of the organization (van der Sluis, 2007). The Human Resource Development (HRD) is an evolving concept and it addresses the challenge of managing performance of employees for the organizations. HRD is an important developmental program to ensure that the organization has an institutionalized way of developing, utilizing and committing human resources in order to meet current and future organizational challenges (van der Sluis, 2007). The views of these different authors clearly indicate that effective strategy for Human Resource development contributes to the enhanced performance of the organization by preparing the employees to tackle both current and future challenges by equipping them with the required skills and capabilities. It is important to create a learning environment so that a firm’s efficacy can be developed which in turn depends on the firm’s ability to assist its employees in enhancing their skills and competencies (Adhikari, 2010). Organizations have to face a lot of challenges in managing performance and the most important aspect being the continuous development of human capital. Since the work requirements are changing, the traditional methods of training are inadequate to deal with the rapid change and increased complexity of work (Casey, 2005) thus, placing demands on organizations to facilitate new approaches to training (Garavan et al., 2002). Human resources are currently the foremost source of competitive advantage because all other potential competitive advantages (e.g. technology, capital, and products) can be either bought or copied (Burke and Cooper, 2008 and Pineda, 2010). At present, organizations are facing shortage of talented and adequately equipped employees with required skills and capabilities in order to reach at the eminent level of performance (Burke and Cooper, 2008). Rao (2002) for example is in favor of an “OCTAPACE” culture (openness, collaboration, trust and trustworthiness, authenticity, pro-action, autonomy, confrontation and experimentation) to create a HRD climate in the organization for improved performance. Organizations with better learning, training and development systems, reward and recognition, and information systems and quality orientation in terms of career planning, performance guidance and development, role efficacy, and reward and recognition systems promoted HRD climate (Hassan et al., 2006). From the figure, it can be said that Human Resource Development encompasses two key ingredients i.e. Training and Development (T&D) and Organization Development (OD). Training and Development focuses on individuals and then links with the organization whereas Organization Development basically focuses at the organization level first and then links with individuals. Additionally, there are three essential functional areas that HRD incorporate individual development, career development, and quality. Researches state that habitual utilization of Performance Management (PM) will result in improved outcomes (Ahn, 2001). PM is related to a number of things like specification of requirements of given tasks and responsibilities, caring behavior at work, increase in job involvement, raising individual and team commitment and engagement, increasing job satisfaction and etc; this all leads to a satisfactory level of employees’ performance and competitiveness protecting and ensuring the growth of a firm in an industry. Performance could be quantitative, qualitative or both. Quantitative performance is related to use of resources such as budget, number of outputs produced or number of assignments undertaken in a given time. The qualitative performance is projected against operational quality such as accuracy and error. Being qualitative or quantitative, performance certainly depends on diverse factors like personality, leadership, team, system and the context. It is supposed that performance enhances when employees work both harder as well as smarter. De Wall (2007) argues that “therefore it is imperative that organizations pay attention to the instrumental and the behavioral side of performance management.” The classic behavioral attributes of an employee at the time of bad or downward performance are reduction in job involvement, lower job satisfaction, decreasing their effort, increased accidents and larger turnover (Bruke, 2005). Organizational performance framework shows that organizational performance is affected by three major factors; organization motivation to achieve the performance objectives, influence and impact of the external environment and organizational capacity to achieve the desired performance. Organization motivation is composed of the employees’ understanding and integration of the company’s mission, of the link between the company’s history and its current strategy, of the alignment between the company’s culture and its strategy, and of the degree to which the employees, compensation motivates them to implement the company’s strategy (Conway, 2005). The influence and the impact of the external environment are the opportunities and threats of the external environment. The organizational performance is affected by the degree to which the organization interacts with the external environment. Performance will be increased by understanding the external environment and by using this knowledge to influence the environment in favour of the company’s strategy. The organizational capacity to deliver the performance starts with the capacity of each function to be current and to deliver against objectives. On top of this is the company’s leadership to lead the organization to strategic success. Source: Daud (2006) Hassan et al. (2006), cited the work of various authors and emphasized the of that Performance Management System concludes affirmative organizational and individual results as improvement in performance (Sandberg, 2000); maintained competitive competitiveness (Winterton and Winterton, 1996 Nordhaug, 1998); greater quality individual and organization problem solving (Schroder, 1989); improved career strategy and employability (Weick, 1996; Raider and Burt, 1996); greater organizational commitment (Iles et al., 1990) and better retention (Robertson et al., 1991). The relationship between HR practices and firm’s outcome is built on the foundation that enhanced deployment and utilization of HR practices must show a correlation with healthier firm’s performance (Ulrich, 1997). Implementation of Performance Management System in an organization Performance Management (PM) is a process for establishing a shared understanding about what needs to be achieved. It is an approach to managing people that increases the level of personal performance and business success. It can be represented by the following figure “The Excelling Manager Framework”: Hence, it is important for the managers to work in collaboration with their subordinates so that they can ensure that the individual competencies complement the job requirements. The managers need to ensure that their management style also supports friendly and co-operative work environment. Performance Management: Foundations The Performance Management Process involves planning, monitoring, feedback, coaching and reviewing. There are many factors that enable Performance Management to be accepted and add value to the business. These enablers need to be in place to ensure success e.g. climate, managerial ability etc. Leadership and Managerial Styles Managerial styles and leadership can be described as the patterns of behavior that the leader or managers adopt to do planning, organizing, motivating and controlling the employees. The style also determines the extent to which the manager listens, sets the goals and standards, develop action plans, gives direction to the subordinates, gives rewards or punishments, assist people in their development and establish relations with their subordinates (Suff, 2009). The styles are important as they represent the key mechanisms that the leaders attempt to influence the performance of employees. The major leadership styles as determined by Houldsworth and Jiransinghe (2006) are: 1. Coercive style - “Do it the way I tell you” - obtaining immediate compliance. 2. Affiliative style - “People first, task second” - creating harmony among people, positive emotions. 3. Coaching style - “Learning & development” - focus on long term development of people. 4. Pacesetting style - “Watch me - I’m best” - accomplishing tasks to high standards; leading by example. 5. Authoritative style - “Firm but fair” - providing long term direction, vision, standards and the rationale for change. 6. Democratic style - “Participative” - building commitment & generating new ideas, through consensus & delegation. Key Elements of Performance Management Process The performance management systems need to be developed in a way that two-way feedback mechanism is developed. All systems must have a All of the performance management design a performance appraisal review meeting between the Manager and the Employee at the end of the performance period. This should be a two-way process and should be fully documented so that the employee is well-aware of his performance. If performance has been managed thoroughly during the performance period then there should be no “new news” presented to the Employee at this meeting. If agreement cannot be reached as to the level of performance that has been delivered by the Employee during the performance period then the Manager’s Manager, in association with HR, should arbitrate. The performance rating should not be communicated to the employee at this time because it may be altered during the consistency process. According to Cunnenn (2006), the best performance management process is one which ensures that once the performance review meetings between Managers and Employees are complete, HR department employees facilitate a number of meetings to ensure that the performance rating standards have been applied consistently and equitably. HR may impose a distribution of performance ratings upon the organisation. It is recommended that two assessors involved in performance appraisal process which is usually the Employee’s Manager and the Employee’s Manager’s Manager. However, the best practice assumes only one assessor – the Employee’s Manager. This places the accountability for subordinate performance clearly with the Manager and contributes towards the creation of a high performance, accountable organisation culture. Hence, the key elements of Performance Management process can be concluded as: 1. The organizations need to create a shared vision of organization’s Strategic Business Objectives (S.B.Os). 2. The performance objectives should be established for individuals, divisions and departments and they should be derived from organization’s S. B. Os. 3. The formal review process should be reviewed to evaluate the progress of individual, divisional and departmental towards goal achievement. 4. The performance evaluation, employee development and reward must be linked to motivate and reinforce desired behavior. Performance can be managed From the researches of various researchers and articles published in the journals, it can be concluded that performance of the employees can be managed if proper performance management functions are properly implemented. Following are some of the key aspects that need to be taken into consideration when developing the performance management system for the employees: 1. The goals of each employee must be set after discussion with them. Hence, the setting up of SMART (Specific, Measurable, Attainable, Realistic and Time-bounded) goals are more likely to induce employees to perform at much higher level. It is better than simply telling the employees to Do Your Best. 2. The goal setting alongwith employees’ participations will ensure that higher goals are set as compared to when the manager unilaterally sets them. 3. Employees need to be given frequent feedbacks so that they know about the progress of their performance. 4. The employees will set higher goals if they are rewarded on the performance rather than simply focusing on goal attainment. 5. Employee’s performance should be evaluated on the basis of his performance and not on the factors on which they have no control. Hence, the managers need to maintain performance appraisal record so that the performance ratings and superior comments on the employees’ performance and it is a valuable tool for defining clear levels of performance, facilitating job performance review discussions between the managers and employees, identify potential needs for training and development, discriminate between high and low performing employees and reward the high performing employees. After doing performance evaluation of the employees, the managers need to do some preparation for Performance Review Meeting so that the manager is able to communicate with the employees properly and the meeting results in a fruitful and meaningful discussion between the two parties. In simpler terms, Performance Review Meeting can be defined as the process in which the manger and subordinate with mutual consensus review the employee’s performance and compare it with the responsibilities as described in the job description alongwith career goals and performance improvement techniques. The three key factors mandatory for producing effective performance appraisal interview are knowledge of the manager about the employee’s job and performance, support given to the employee by the manager and most importantly manager’s involvement in the discussion with employee. Here are some of the mandatory preparations that the managers will have to do so that the employees feel positive about their performance appraisal: 1. The job description of employees must be reviewed. 2. The last performance appraisal report of the employees must be reviewed. 3. The current performance of employees must be checked with the goals set at the start of year and documented in his performance appraisal document. 4. The employees must be informed in advance about the performance review that will be held with his manager so that he can do necessary preparation. 5. Make a list of the key points that will be discusses in the meeting. 6. The managers must make sure that sufficient time is available for discussion. Hence, the managers will have to make sure that there are no hard feelings developed and the discussion is done in a positive way. Some word of cautions are that the problems should not be discussed as criticisms and must be treated as problems; the discussion must not be destructive and should be constructive; the performance appraisal discussion should never be used as a source of attacking the employee’s personality; enough space should be given to the employees to talk and discuss his viewpoint and the managers should avoid using authoritative tone. It is rightly stated by Pulakos (2004) that performance management system can be referred to as Achilles’ heel of HRM. When the system is used for decision-making purposes i.e. the hard model of HRM, the information gathered from appraisal system is used as a basis of increasing the pay, promotions, assignments, projects, transfer, reductions in force or other desired administrative HR actions. When the system is used as a soft model of HRM, it is used for employee development purposes; the developmental needs identified via the appraisal system will be used to guide the mentoring, coaching, training and job experiences or other developmental activities that will allow the employees to develop their capabilities. Hence, with the proper designing and implementation of appropriate performance management system, the discrimination between high and low performing employees can be easily made. The underperformers can be given the opportunity to improve while high performers can be encouraged by giving rewards. Hence, the employees who contribute to high performances towards the achievement of SBOs should receive greatest rewards. If the underperformers don’t improve, then they can be transferred, demotioned or terminated. Reflections on my developmental needs According to Eller College (2010), the marketing field has become very competitive in the near future and the graduates will have to do a lot of efforts to achieve their desired positions. In order to have a competitive edge, the graduates should start gathering information about the skills that they will need to make a prospering career in the competitive marketing field. The foremost thing that will be needed to get qualified for the marketing job is the educational fulfillment i.e. four-year’s degree from a well-reputed and popular business school. The majors that should be studied during the four-year bachelor’s program are communications, advertising, marketing, public relations and international marketing (All Business Schools, 2010). The communication skills are the vital requirement for the professionals who want to enter the marketing field as they will have to work well along with the team so that the marketing plans are properly developed and implemented. The marketing department people do not work in isolation so they will have to effectively communicate with other departments’ employees as well. In order to make a dynamic career, the graduates must try to get internships in the organizations so that they can develop a good foundation for their work experience (Moon, 2009). Since I have opted to make my career as a marketing manager in brand and product development, so I have gathered sufficient information about the knowledge, skills and competencies required for the professionals at this designation. It is clearly stated in Eller College (2010) careers in marketing report that the professional for this position will need to understand the whole process of managing the product or service. Since I am aiming to enter FMCG industry, I will have to deal with all aspects of my product which will include planning, developing and directing the consumer marketing efforts of the product. As a marketing manager of the product development, I will have to be proficient in managing the time constraints, communicate with my team members effectively and able to present the ideas to top management clearly and concisely. As many organizations also conduct group discussion test to judge the prospective employees, it is important that the job applicants are aware of the points that need to be taken care of so that the rules are properly followed. During my learning process, I learnt that while the group discussion is going on it is better to listen to other people, never dominate others, carefully evaluate other people’s opinions, make valuable contributions in the discussions and most importantly make sure that the discussion remains on track. As a marketing manager, it is important to encourage the team members to participate, show them appreciation for their ideas and let them do some work on their own. Therefore, the marketing manager needs to learn the art of taking the team on the same track and making sure that everyone is in the same loop. Hence, I am assured that I will be able to prosper in my career by working on my strengths and acquiring the skills and knowledge that are mandatory to move ahead in the career ladder in my workplace. References Adhikari, D.R., 2010. Human Resource Development for Performance Management: The case of Nepalese organizations. International Journal of Productivity and Performance Management, 59 (4), pp. 306-324. Ahn, H., 2001. Applying the balance scorecard concept: an experience report. Long Range Planning, 34 (4), pp. 441-61. All Business Schools, 2010. Marketing Career. 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