Behavioural Factors and Performance Management in Manufacturing Firms - Essay Example

1. INTRODUCTION/BACKGROUND TO THE STUDY 2. OBJECTIVE: i. Determine the role of employees’ perceptions regarding career advancement opportunities embedded in PM practice in increase their level of involvement in performance management implementation ii. Examine how democratic leadership style contributes to action orientation towards and performance management among organisational members iii. Examine the effects of manager-employee relationship on employees’ participation in goal-setting and expectations clarification/agreement, and whether it is linked to employee performance and productivity. iv. Determine the effects of accountability systems to poor performance management systems and how they affect employee goals and organisational objectives v. Examine the effects of downward communication on employee satisfaction and performance relative to the powers of immediate supervisors vi. Determine a link between employee perceptions about the outcomes and the purpose of performance management 3. RESEARCH QUESTIONS: i. What are the roles of employees’ perceptions regarding career advancement opportunities embedded in PM practice and their effects on their level of involvement in performance management implementation? ii. Does democratic leadership style contributes to action orientation towards and performance management among organisational members? iii. What are the effects of manager-employee relationship on employees’ participation in goal-setting and expectations clarification/agreement? iv. What are the effects of accountability systems to poor performance management systems and employee goals and organisational objectives? v. What are the effects of downward communication on employee satisfaction and performance relative to the powers of immediate supervisors? vi. What is the relationship between employee perceptions about the outcomes and the purpose of performance management? 4. PROBLEM STATEMENT (Any theoretical and empirical gaps) 5. SIGNIFICANCE OF STUDY (How the study will contribute to theoretical and empirical knowledge) LITERATURE REVIEW (A) Accountability According Reform support Network (2014), accountability implies arriving at decisions intended to continue, enhance as well as end practices rooted in data, and in turn implementing incentives linked to performance. According to Mosoge and Pilane (2014), accountability requires that results have to be engaging and be communicated to both the inside and external stakeholders. In an earlier review by Martinez (2000), the researcher examined a culture of accountability at civil service organisations in Zambia, Mozambique, and Ghana. He concluded that a prevalent culture in organisations that attempt performance management is as significant as the leadership and management systems in places. The researcher was however concerned with the effects of behavioural factors on employee accountability, and how it affects performance management in public service organisations. He established that the key barrier to satisfactory performance management is the attitudes of the employees, in this case the civil servants. The hierarchical nature of decision-making and power was another factor. A surprising finding, however, was the idea that civil service organisation were highly self-centred leading to employees who were less client-oriented, hence affecting their performance management (Mosoge & Pilane, 2014). Mosoge and Pilane (2014) also linked his findings to accountability. In his review, the tendency for the civil servants to become self-centred and less client-oriented is aggravated by elongated ineffectual appraisal systems that focus on employee behaviour instead of their performance. What this shows is that ineffectual accountability systems lead to unconstructive employee behaviours that ultimately low their performance. Still, his assertion is however not supported by empirical findings. Hwang (2013), on the other hand, defines accountability as a social relationship where an actor feels the obligation to provide details justifying and explaining his actions or inactions. Hwang (2013) also argues that accountability may be as well defined based on the institutional, political, social, and cultural conditions. In his view, for public organizations to explain and to validate their actions, they have to provide information regarding their actions. For this reason, accountability has the outcome of ensuring “transparency” of information, which leads to positive employee behaviour. The dimension of transparency has been earlier discussed by Koppell’s (2008), who provides a useful framework for understanding the concept of accountability. Koppell suggested five dimensions of accountability that reveal multiple features of accountability. The five include liability, transparency, responsiveness, in addition to responsibility, (see Table 1). Liability and Transparency could be viewed as forming the basis underpinning accountability. The same applies to the remaining substantive conceptions of accountability, such as responsiveness, controllability, responsibility. At any rate, asking questions with these dimensions in consideration reveals the level of accountability. Effect of Accountability on Performance Management The Reform Support Network (2014), an initiative started by the U.S. Department of Education, also examined the issue of accountability and how it is linked to performance management in civil service organisations. The underlying assumption for the study was that implementation of incentives is linked to performance. This is however effective when results are communicated and employees are engaged. At any rate, there is a general consensus among related studies that accountability for results leads to improved performance management practices. This assumption appears to be valid and is widely supported by current literature (Smither & London, 2009). According to the Reform support Network (2014), the ability of organisations to drive change is contingent on the capacity of its performance management system to influence work and evaluate advancement. In their study, it was concluded that employees could only accept accountability for results once the purpose and outcomes of their work is clarified. Similar results were replicated in the states of Hawaii, Delaware, Tennessee and Massachusetts. Therefore, accountability potentially enhances or hinders performance. This assumption was proved by Ossege (2012) in his review of the link between accountability and performance management. Ossege (2012) was of the view that accountability is a complex variable capable of interacting with features of the decision maker and some aspects of task environment to generate a range of beneficial effects, such as effective performance management. In a related study that examined the accountability concepts among civil servants in England by Lupson and Partington (2011), the researchers identified the manner in which people tended to understand and practice accountability. However, the study was only centred on accountability, which also means that the accurate link between accountability and performance may not be effectively explained by evidences of ‘accountability for performance. While an instinctive link exists between performance and accountability in certain studies, such as by Kim and Lee (2010), the relationship still needs to be examined empirically and to the extent to which accountability influences performance. Some researchers like Dubnick and Frederickson (2011) and Macha et al (2011), however, are strongly convinced that greater levels of accountability results to greater performance. Put differently, employees who are accountable tend to yield greater productivity. As regards the impact of accountability on performance, there still exists significant debate regarding the link as it is rarely challenged. An exception was provided by Hwang’s (2013) inquiry into the manner in which the construct of accountability influences an array of public organisation’s performance. While a number of empirical studies have examined the positive influences of accountability, as evident from the above review, it still remains unclear when as well as what kinds of accountability mechanisms contribute to desirable behavioural factors or employee behaviours that contribute to better performance (Mosoge & Pilane, 2014). An underlying reason for such scepticism regarding accountability is the complex yet usually self-contradictory nature of performance, as Hwang (2013) reveals. For instance, accountability inflicts pressures on what the employee perceive their work performance. This can minimise the likelihood of completing a task satisfactorily in an organisation. Hwang (2013) argues that the level of accountability is what affects the level of performance. This confirms a remark by the Reform Support Network (2014) that while accountability is good, having greater degree of accountability may not ensure better performance as it can prevent an organization from attaining its missions. (B) Communication Effects of internal communication to attain organisational goals According to Balakrishnan and Masthan (2013), internal communication refers to the exchange of information by formal and informal among the employees as well as between the employees and the management. This shows that organizational communication centres on linking individual employees, organization, and groups of employees with the management to foster attainment of common interests as well as to influence spontaneous interaction and collaboration. Similar remarks are shared by Kawar (2012) when he reveals that communication implies effectively responding to the execution of expectations during the process of exchanging message leading pleasant, satisfying experience. Femi (2014) views communication as entailing the process of exchanging ideas, opinions, and even emotions using symbols or words among two or more entities. A simpler definition of communication within the context of an organisation is provided by Widhiastuti (2012) as he describes it as a means through which information on how tasks and resources should be organised to undertake assignment is made known to the management and the subordinates. Clearly, from these definitions, it can be assumed that the multidimensional aspects of the concept of communication together with it analyses from divergent perspective influence its definition. Still, the definitions lead to the assumption that communication consists of processes associated with transferring of a message from an individual to the other. Hence, effective communication would entail transferring of messages, leading to subsequent response or feedback from the receiver to the sender. The feedback, in this case, indicates the receiver has understood the message. Beyond this, Widhiastuti’s (2012) idea that communication reduces uncertainty through the exchange of meanings is treated as vital in understanding the concept of communication. A large number of studies that attempted to address the effects of communication on performance influenced by the extent to which the staff is furnished with information. They also examined the extent to which the direction of communication influences performance. A general consensus was that communication forms the basis for effective functioning of an organization (Tariszka- Semegine, 2012). Tariszka- Semegine (2012) characterizes communication in terms of their direction, such as horizontal or vertical. In his view, vertical Communication happens between two individuals who are hierarchically positioned. Still, it can either be upward or downward communication flow. Tariszka- Semegine (2012) posits that downward communication tends to be highly effective when the managers at the top engage in direct communication with immediate supervisors, who subsequently communicate with the members of staff in their teams. In his review of literature, Tariszka- Semegine (2012) acknowledged an existing wealth of evidence showing that downward communication can lead to better employee satisfaction and performance when the powers of immediate supervisors are increased. In another study, Lekovi and Berber (2014) examined the significance of Communication in Contemporary Business and reviewed published literature from the Central and Eastern Europe (CEE) region. Their findings indicated that effective communication with employees is a critical dimension that all human resource managers should consider. In a related study by Tariszka- Semegine (2012), the effectiveness of internal communication as a means for enhancing organisational efficiency was examined. The findings reflected that of Lekovi and Berber (2014), hence confirming the finding that an effective communication with employees is a critical dimension that all human resource managers should consider. Tariszka- Semegine (2012) rated effective communication as critical for effective performance management. In respect to upward communication, findings by Tariszka- Semegine (2012) indicated that employee satisfaction and performance is likely to be lower when strategies for upward communication are used in an organisation, such as employee grievance programs, and employee surveys. Tariszka- Semegine (2012) failed to provide reasons for this although explained that the low level of employee satisfaction and performance was due to the fact that the upward communication fail to involve two-way communication. Regarding lateral communication, Tariszka- Semegine (2012) explains that it consists of communication among individuals who are not in the same hierarchical relation with one another. A review of literature on the effects of lateral communication on performance shows that the current trends aimed at flattening organizations have facilitated an understanding of the significance of lateral communications. A relatively valid study by Widhiastuti (2012) showed that lateral communication among the managers enhance greater satisfaction and performance. However, lateral communication among managers with different functional divisions brought about organizational dysfunction, hence reducing organisational performance. Effect of Communication on Performance Management Studies have showed that effective communication contributes to better organisational performance, while poor communication leads to lower levels of employee commitment, which in turn contributes to poor organisational performance (Widhiastuti, 2012; Balakrishnan & Masthan, 2013). Widhiastuti (2012) advises that having clearly communicated performance standards and expectations, in addition to providing and evaluating feedback, and work appraisals can enable an organisation to attain optimal results by managing employee performance. This could be explained by Balakrishnan and Masthan (2013) idea that communication enable employees to perform tasks that are aligned to the organization objectives and roles. Hence, communication is lined to employee performance and performance management. From these, it could be assumed that effective communication may trigger desirable behavioural factors that lead to effective performance. Indeed, as earlier confirmed by Widhiastuti (2012), organisational communication is helpful in fostering supportive employees. The question of whether internal communication leads to effective organisational performance was examined by Balakrishnan and Masthan (2013) in his review of the effects of internal communication on engagement of employees at the Delhi International Airport in India. The researchers established a strong relationship between effective employee communication and better organisational performance. The findings justify significance of communication and its direct link to every day work. What these show is that the management may cause greater levels of employee commitment to an organization when they improve the quality of communication. (C) MANAGERIAL /LEADERSHIP STYLES According to Obiwuru et al (2011), leadership refers the individual behaviour that guides a group to attain a goal. Koech and Namusonge’s (2012) review of leadership literature reveal that the studies on performance and leadership may be generally grouped into several significant phases. The researchers centred on identifying the personality traits that define effective leaders using trait theories and concluded that the difficulty in grouping and justifying these characteristics triggered extensive criticism of the trait approach as tending to indicate the need for behavioural‟ approaches to leadership rather than style. Some behavioural and style theorists have shifted from concentrating on leader’s characteristics to leader’s behaviours (Lunenburg, 2011). In the same way as the trait theories, a key limitation of style and behavioural theories is its tendency to disregard the significant role that situational factors play while determining the effectiveness of leaders. Lynch et al (2011) agrees that it is such a weakness that validates the need to use contingency and situational leadership theories. A key of the contingency and situational theories is that the effectiveness of leadership depends on the extent to which a leader understand the analysis and understanding of situational factors, in addition to implementing the suitable styles to address each adverse circumstance. Still, current studies on leadership do contrast transformational leadership and transactional leadership. In Koech and Namusonge’s (2012) view, transactional leaders tend to be instrumental and focused on facilitating an exchange relationship with the employees. On the other hand, transformational leaders tend to be enthusiastic and visionary and motivating to the subordinates While the above review provides evidence suggesting that studies into leadership have provided consistent results indicating the contrast transformational leadership and transactional leadership, current interests are into the significance of the leadership to organisational performance. A consistent finding by Mostovicz (2009) provides a discourse on the significance of leadership in his argument that the effective leader is a key determinant of the performance. Indeed, there are related findings where organisations have had to contend with the increased volatility of the external environment through leadership training and development programs leaders in addition to equipping the with the right skills to ensures they exhibit desirable behaviours (Obiwuru et al, 2011). Such a claim shows a direct relationship between organizational performance and leadership. This hints to the relevance of organizational behaviour and leadership in enabling performance, leadership is a significant dimension when it comes to organizational behaviour. Simply put, the management’s capacity to implement “collaborated effort” is contingent on leadership styles and capability. Obiwuru et al (2011) opines that the effective leader inspires subordinates’ potential to improve on their efficiency and to attain organizational goals. Obiwuru et al (2011) used this premise to argue that effective leadership styles, such as transformational leadership, may inspire motive as well as improve the employee’s potential for development and growth. They provided various reasons for this, including the relationship between organizational performance and leadership style. Indeed, studies have showed that effective leadership behaviours enhance improved performance whenever an organization encounters challenges (Iqbal et al, 2015). Conversely, organizational performance describes an organisation’s capacity to attain key objectives like higher profits, better quality of products, greater market share, and good financial outcomes (Obiwuru et al, 2011). Obiwuru et al (2011) further explains that organizational performance could be perceived as concerned with how an organisation performs in respect to the level of profit, product quality and market share. For this reason, it reflects the productivity of employees within the enterprise, which could be measured based on the profit, revenue, growth, organizational expansion, and development. For this reason, leadership has significant impact on performance as leadership is perceived to be a key driver for improving an organisation’s performance. Indeed, another study by Belonio (2012) also provided valid evidence indicating that effective leadership is a potential source of employee development and an organisation’s long-term competitive advantage, which translates to improved organizational performance. An example of such a scenario includes where transactional leadership assists an organization to attain its current objectives effectively by linking work performance to the rewards that employee’s value, while simultaneously ensuring that the employees are provided by sufficient resources to perform the tasks at hand. (D) SUPERVISOR-EMPLOYEE RELATIONS The supervisor-subordinate relationship is central to effective employee work environment. According to Thisera (2013), supervisor-subordinate relationship is among the critical factors that affect employee performance yet arise within the organizational context. Thisera (2013) adds that the role of the supervisor is crucial the organization as he in charge of guiding the subordinate towards attaining the organizational objectives and goals. In his study of the supervisor-subordinate relationship, Thisera (2013) found that a bad supervisor-subordinate relationship causes employee de-motivation, dissatisfaction, and ultimately poor performance. Ultimately, this results to goal setting, and lack of feedback, and performance management implementation. There is however a paucity of research in these area to validate In a related study by Afolabi et al. (2008), it was also established that the supervisor-subordinate relationship is critical in job performance and career commitment. He added that the relationship is the most significant communication link in the organization and therefore facilitates implementation of performance management systems. Krot and Lewicka (2012) argues effective supervisor-subordinate relationship fosters better performance management as it encourages trust between the employee and the employer, hence causing a sense of satisfaction. In an earlier study, Vignaswaran et al (2005) attempted to establish a link between performance appraisal and implementation of performance systems, and supervisor-subordinate relationship. Their findings indicated that when the supervisor is supportive to the subordinates, it results to favourable outcomes in the areas of performance appraisal and implementation of performance systems. The issue of appraisal and feedback was also examined by Thisera (2013). His findings indicated that supervisors play an instrumental role in providing informal feedback regarding job performance as they are organisational agents who direct and evaluate subordinates. (E) EMPLOYEE PERCEPTIONS AND ATTITUDES Boachie-Mensah and Seidu (2012) examined the employee attitudes and perceptions towards components of performance management systems such as performance appraisals. They concluded that since perceptions influence employee’s judgement and attitudes towards certain phenomena, employees are likely to hold diverse opinions regarding performance appraisal systems. In a related study, Katsaros’s et al (2014) argued that employee perceptions about the outcomes and purpose of performance management would only be beneficial depending on when they perceive it as a critical source of useful feedback to enable them to improve their performance. For instance, employees will tend to contribute meaningfully to a particular performance management when they view it as providing an opportunity for promotion. The issues of employee attitudes and trust also can limit the effectiveness of performance management systems and implementation. When the employees have a poor attitude towards their supervisor, Akhtar and Khattak (2013) contend that they are likely to get dissatisfied with the performance management system, reject the feedback and resists its implementation. Katsaros’s et al (2014) research also suggests that positive job-related attitudes affect employee perceptions of supervisory support, their career development may, and the role of performance management. They promote positive influence employee perceptions towards performance management systems, leading to their effective implementation. THEORETICAL FRAMEWORK The Competency Model Theory The Leadership Competency Model was suggested by Pulakos (2009) in 2009 to assist organisations to promote effective performance. The theory proposes that an organisation’s performance would be improved when the needs and competencies in addition to employee’s abilities are identified. It proposes a framework, from strategic thinking to collaborating with others as shown in the figure below, which when followed by the management and the employees, ensure effective work performance by modelling employees behaviours to conform to organisational goals and objectives (Saudi, 2014). Figure 1: Leadership Competency Model (2009) Its key advantage is that it provides the workforce with an occasion to re-evaluate the organisation’s key mission and intention, hence enabling employees to pursue personal interests and career progress consistent with the organisational goals and objectives (Saudi, 2014). The Behavioural Theory The Behavioural Theory applies to employee attitudes and behaviour. The theory was developed founded on the assessment of employee behaviours and attitudes. According to Mosoge and Pilane (2014), performance management system should serve a device or tool for controlling employee behaviours and attitudes within the organisation. For this reason, employee attitude is seen to be a mechanism for evaluating and predicting the capabilities of employees while they perform tasks. The theory suggests that the role of employees’ behaviours can mediate the link between organisational performance and performance management. Maslow’s Hierarchy of Needs Theory, which was proposed in 1943, is a behavioural theory that applied to employee behaviour and performance management. The theory points out that the definitive goals of self-actualization are influenced by the dynamic need for satisfaction, where employees constantly look to fulfil needs (Saudi, 2014). Hence, the degree to which this needs are satisfied influenced the employee behaviours and the level of performance. While its key advantage is its potential to provide an insight into employees behaviours and how these behaviours influence their performance, its key weakness is that it assumes a level of freedom on the part of the employees. This means that the employees cannot be forced to learn new things despite being forced to comply with the key performance indicators (KPI) (Saudi, 2014). 8. SAMPLE HYPOTHESES i. Positive perceptions regarding career advancement opportunities embedded in PM practice increase the level of employee involvement in performance management implementation, which lead to better organisational performance ii. The greater the element of democratic leadership style in the organisation the greater is the level of action orientation towards performance information use stimulated among organisational members , which contribute to better employee performance iii. The more harmonious is the manager-employee relationship the higher the level of employees’ participation in goal-setting and expectations clarification/agreement, leading to better employee performance and productivity. iv. Ineffectual accountability systems lead to poor performance management systems and poor understanding of employee behaviours, which lead to a mismatch between employee goals and organisational objectives and ultimately poor organisational performance. v. Downward communication can lead to better employee satisfaction and performance when the powers of immediate supervisors are increased, hence leading to better organisational performance vi. Employee perceptions about the outcomes and purpose of performance management are only beneficial depending on when they perceive it as a critical source of useful feedback to enable them to improve their performance. References Akhtar, T. & Khattak, S. (2013). Employee Acceptability of Performance Appraisals: Issues of Fairness and Justice. World Applied Sciences Journal 24 (4): 507-518 Balakrishnan, C. & Masthan, D. (2013). Impact of Internal Communication on Employee Engagement – A Study at Delhi International Airport. 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