Improving the Performance Management - Case Study Example

?Improving the Performance Management: Case of SMEs in UK List of Contents Introduction ………………………………………………………………………3 Purpose…………………………………………………………………………. 3 The organizations: UK SMEs ………………………………………………….. 4 Why Performance Management (PM) is Important? …………………………… 5 Consideration and High Market Competition ………………………………….. 6 Highly Skilled/Specialist Staff …………………………………………………. 7 Recent Organizational Change………………………………………………….. 7 Business Strategy Adopted……………………………………………………… 8 Challenges, Weakness, Quality and Culture …………………………………… 9 Proposals………………………………………………………………………… 11 Conclusion……………………………………………………………………… 12 List of Figures Figure 1. Key component of performance management…………………………… 5 Figure 2. Porter’s Force of Analysis………………………………………………… 9 Figure 3. Consistency………………………………………………………………….. 10 References ……………………………………………………………………..14-15 Introduction High Performance management is about translating strategic plans to concrete actions. This is the constant challenge in all organization, corporation, and industries that are seeking to scale up profits and widen business operation. Experts posit that an effective organizational management ensures the consistency of effective direction of employees work to make their performance consistent to company’s vision, mission and objectives to meet organizational needs (Mejia, Balkin, & Cardy, 2012). It is an approach to encourage innovative efforts and inspire workers’ initiatives to yield high performance It motivates everyone to be engaging as human resource capital for a company. Purpose This paper aims to correlate performance management (PM) to two business organizations based in United Kingdom. It will also explore some evidences pertaining to some difficulties, challenges, and it’s anent implications. Moreover, the paper will attempt to balance proposals inspired by evidences upholding the significance of performance management to human resource management (HRM). Purcell and Hutchinson (2007) explained that this is because the relationship of PM systems to organizational performance is importantly bridged by employees’ behavior and their separate perspectives. In an attempt to advance PM, both in theory and praxis, as discussion is further deepen with concerns on motivation from their expectations, goals and standard company controls. Specifically, the study aims to complete the following: a. Explore, contrast, and critically evaluate, a business case using performance management standards in two organizations; b. Explore using research evidence, practical difficulties, challenges, and implications of PM within two organization; c. Use research evidences to develop balanced proposals that relates to practical challenges that can be effectively managed in short or strategic terms; d. Demonstrate awareness about potential limitations of your proposals. The organizations: UK SMEs Recent development in the European market depicted the completion of internal market amid improved socio-economic and policy-based environ. Economists in UK perceived that the small and medium-sized enterprise (SME) can only thrive by removing the trade barriers and by the institutionalization of structures that can better market relations (Braun, 2012). SMEs are those small and middle businesses partaking in the manufacturing, wholesale, retail, hotel, restaurants, real estate lease management and the like. An example of this is Dixon, an electric retailer and Virgin Media, a flagship call center. Both of these SMEs are have major based in Sheffield. Like other SMEs in UK., they sought for the diminution of burdens in starting business and the lengthy an costly processes for business registration (Braun, 2012). With improved policies, SMEs are facing the very dynamic and more complex, and overly interconnected commercial and industrialized society. Business experts saw the need to undertake strategic planning and reorganization of their companies to meet the EU standard business scale (Braun, 2012). They also realized the need to upscale their respective workforces to make them more competitive and knowledge-based resources to make them worthy enough to be considered as the backbone of European market. Their nature as small organizations made them vulnerable to rapid developments in the market amid demand for skilled innovation and high technology potentials that must be enjoyed (Braun, 2012). These SMEs are member organization of the CBI, a premier association of business lobbying organization with diverse offices across UK and other offshore countries to assist in developing an organization with career progression (Braun, 2012). Why PM is Important? Amid confrontational challenges of economic downturn and the need for business intelligence to enable companies to manage changes demanded out of rapid developments in the market, companies need to see the significance of adopting systematic performance management of human resources (Ader, 2005; Bounds, Dobbins, & Fowler, 1995). This could assist the organization to explore its potentials through its human resources as teams working toward the achievement of its business goals for tangible benefits and to ascertain the sustainability of its business operations. Through PM, both the company and its workers are clarified of their expectations, roles and purpose of engagement, whether this is stipulated in a contract or merely discussed by the management to its HR (Dewettinck & Van Dijk, 2009). Figure 1. Key component of performance management.. (Mejia, Balkin, & Cardy, 2012). This system seeks to strategize the goals of the company and optimize the core competencies of its workers to attain continuous momentum, otherwise, the company may seek an integrated mechanism that will boost the competence of its human resources to meet the needed skills, behaviors and attitudes in the workplace (Marelli, 2005; McKinney, Bartlett, & Mulvaney, 2007). Thus, the management must have clear organizational development for its effectiveness in hurdling tasks; conduct regular annual evaluations; and, train staffs for their developments or coach or mentor them as significant part of the strategies (Armstrong & Baron, 1998). Its pointed that to accomplish this, the company must have standards for employees’ behaviors and strong commitment for excellence. Consideration and High Market Competition Following the discussion, it is therefore relevant for the company to seriously take into account the implications and demand for corporate leadership and management to ascertain that the company lives up with its expectation to be the organization that is working perpetually in acculturating excellence and business ethics as guide to plans and actions (Mejia, et. al., 2012). Sound business strategy is an expression wanting for positive impact in business management. That also entails discouraging the fast turn-around of employees and motivating its workforce to gain appreciation of diversity as significant in customer relations (O’Reilly & Chatman, 1994). Developing performance culture, just salaries, and cohesion for sustained learning process of HR is therefore important to keep the employees’ high motivation and commitment as drive forces to meet highly competitive business sector (O’Reilly et al., 1994). Highly Skilled/Specialist Staff Continuous opportunity for seminars and trainings on leadership, business management, customer satisfaction, and financial management are important for the organization aside from attained knowledge from formal education. Business management required highly competent specialist staffs are necessary to sustain the organization at its targeted direction and achievement of goals. These skilled staffs are instrument to coach and mentor new workers. As specialists, they can respond to issues and problems of the organization with ease and integrity, thus, can coach them intelligently. This is technically one of the many roles of the HR department. Such office must deliberately maximize the use of its human resources to gain competitiveness and leverage in the marketplace. HR programs and plans must therefore be reasonably fitted to the sensitive constructs in managing employees intelligently. Recent Organizational Change Financial crisis and rapid changes in the market is crucially affecting all business operations. Other drivers of changes are the rise of many companies that are offering similar services or are selling similar products. It’s very crucial that the company can immediately face the environmental or external challenges of the firm. Knowledge on change management can generally improve organizational performance (Fletcher, 2001; Guest, 1987). Diversifying too, depending on the contextual situation of the market, can help the company leverage from the possibility of other company’s dominion. As such, managers need to constantly monitor and conduct political, economic, social, technical, legal and ecological aspect of the market so that alternatives can be easily adopted in case of changes, regardless whether these are positive or negative. Other method of monitoring business development is to regularly read business reports and to join business associations where leaders are constantly engaged in wider discourse. Drivers of change to consider are economic liberalization, information technology, policies, and the market culture. Business Strategy Adopted The business strategies adopted must be consistent to the vision, mission and goals of the company. The business plan should be written using logical framework so that workers and management can easily determine where they are situated in their timeline of workplan. Regular evaluation should be conducted to better the coordination, operation and human resource relation with management. To assist the company in strategically positioning itself, they can adopt the Porter business analysis. The Porter's Five Forces tool help determine the power relations within business situation (Mindtools. 2012). Its conventional use is technically to identify possible profits that can be derived from products and services (Mindtools. 2012). It also helped illuminate the power mapping in many aspects of business relations. The five significant forces are supplier power in driving prices of their indorsed products; the buyers’ power to drive prices down; the competition and rivalry in the market; and the threat of substitution or the capacity of the customer to seek for alternative products of the same quality but of lesser prices (Mindtools. 2012). The fifth force is threat of new entry that can possibly weaken that supposed favorable company’s position in the market. For the management, the company can use the illustration below in conducting their Porter’s analysis (Mindtools. 2012). Figure 2. Porter’s Force of Analysis. (Mindtools, 2012). Challenges, Weakness, Quality and Culture Some of the challenges that the business industry is facing are fluctuation of forex, the need to uphold employees’ health and wellness program, and the effects of climate change due to ecology related concerns. Other challenges are controlling costs, improving quality of services and creating distinction of services. For problems on forex, the company must adopt some hedging mechanism to save its money from losses. On health and wellness concerns, the company must adopt practices and policies that integrates health program for physical and psychological health of employees. Other than offering social security services, health cards and other activities that are contributory to wellness must be upheld. Nowadays, companies are considering the significance of integrating ecology consciousness and adoption of ecology-sensitive policies to heighten the contribution of companies on environmental protection and mitigate the ill-effects disaster. This may mean integration of waste management in its operation and the optimization of information technology to reduce the use of papers in communication. Of course, whatever changes that must be introduced to the companies must be in consistent to its organizational capabilities(Mjia, Balkin, & Cardy, 2012). Figure 3. Consistency. (Mjia, Balkin, & Cardy, 2012) To improve organizational capacity, the companies must align all actions to its VMGs and must constantly work for the achievement of principle-centered and business culture to get rid of lousy performance (Folger, Konovsky, & Cropanzano, 1992; Hunter, 1986) and meaningless management. These have been discussed earlier in the preceding paragraphs. From time to time, depending on needs, the management may downsize its employees (Hinkin & Tracey, 2000) if decentralized functions can be assumed by multi-skilled staffs or if information technology is enough instruments to market products and services. This is a standard company practice to lessen unnecessary operational costs and to improve its bottom line. Organizational restructuring may sometimes be undertaken if this is significant part of the adaptability of the organization to meet the relevant changes (Schmidt, 2010). This is maybe at times perceived as unfair (Jaffee, 2000), but the sustainability of the organization is driven by how it can cope with the changes that will not incur excessive financial bleeding (Waldman, Kelly, Arora, & Smith, 2010). But of course, its always necessary at all times for companies to hold on with its corporate values, business ethics, support mechanism and improve its unique capacity to leverage within the market. Workers must continually work as team and maintain open communication at all times to keep the system well and smooth (Jawahar & Williams, 1997; Marelli, 2005). Proposals The companies must sustain at all times its flexible adaptability to changing relations in the market. PM effectiveness can be enhanced by scaling up formal and informal performance evaluations and by engaging employee’s participation in performance management. Stronger human resource participation can increase the ideals of fairness within the meanings associated under labor standards. PM add values to logical and sequential management of workers’ affairs and is expected to produce more positive outcome. If acculturated within the organization, it can make itself resilient to diverse challenges and changes within the organization. Further, to make its presence more felt in the market and its corporate voice heard by policy makers, the company must maintain a web-based account where they can publicize its best practices, its successes and challenges confronted. Through the web, they can also expand to home-based markets and conduct online business at a lesser cost. The time has come when even business managers need to be stringent on financial flows to lessen operational costs. Moreover, the managers must welcome cultural diversity as edge in business operations. Maintaining open communication and enjoining workers to take part in performance management can reduce potential management barriers (Cardy & Carson, 1996). Legal issues must be consistently addressed by the company while managers should be involved in policy-advocacy too to ascertain that business operations can be undertaken with less bureaucratic maze and of reasonable ease. Conclusions Scholars professed that PM improves performance. Through the systems, the perceptions and attitudes of human resource can alter the positively change their behaviors. DeNisi and Pritchard (2006) and Buchner (2007) asserted that human resources’ sense of motivation must be anchored on expectancy while they’d directed on clearly articulated goals although their behaviors are regulated to conformity to labor standards, corporate policy and business ethics (Klein, 1989). Let their time and energy (based on their description of jobs) be optimized to gain the necessary consequences for satisfaction (DeNisi and Pritchard 2006). The targeted result of action creates expectations to both employers and employees hoping that all are geared to the production of favorable outcome. Thus, if accrued, should be boosted with rewards driven by attainment of service satisfaction. References Adler, L. (2005). The 2X factor: The real cost of bad hiring. China Staff, China. vol. 11 , 27. Armstrong, M. and Baron, A. (2005). Handbook of Strategic HRM. Mumbai: Jaico Publishing House. Cardy, R. L., and Carson, K. P. (1996). Total quality and the abandonment of performance appraisal: Taking a good thing too far? Journal of Quality Management, vol. 1 , pp. 193–206. Braun, S. (2012) . 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