Performance Management - Essay Example

?Table of contents 0 Background 2.0 Introduction of Performance Management Systems at RBS 2 Advantages of PIMMS to RBS 3.0 Modules of the PIMMS systems at RBS and linked objectives 4.0 Execution of PMMIS system at RBS 5.0 Employee training and cultural development 6.0 Project benefits 7.0 Conclusion 8.0 References 1.0 Background With a market capitalization of more than ?50bn, the Royal Bank of Scotland is the eighth largest bank around the globe and the main areas of operation of the bank are mainly the US, UK and Europe. However, out of the three, Europe is the main source of the bank’s income and asset generation. The RBS employs a strong employee force of over 28,000 employees distributed over 92 locations across the world and ten different business areas. The mainstream of RBS, the UK banking operations employ a ‘back office’ approach for their operations. Operations when carried on at such a large scale require that the performance levels of these operations are measured with the help of efficient methods, the flow of work is optimized and processes are effectively managed. In the past, companies found it quite difficult to quantify and compare the performances of its systems and assess the effect of application of improvement techniques. The need of acknowledging a common business supporting system that provides the required flexibility, information management and measurement of performances was required. Performance management is one of the most important drives of effective and strategic HRM development in any company. The concept of performance management was initiated in the late 1990’s and has been largely admired and adopted by HR departments across the globe. Performance management has assisted the companies to understand that the employee talent, motivation, expertise and retention is the main driver of the business growth prospects and profits, (Kaplan, Robert and David Norton, 1996). 2.0 Introduction of Performance Management Systems at RBS The main aim behind introducing a performance management at the RBS was to enhance the efficiency and affectivity of the existing people and process management techniques by employing high quality performance management systems. The Royal Bank of Scotland initiated the performance management system strategy to measure the effect of human capital on its bottom line financial metrics in the year 2000. With the HR executive Greig Aitken at the helm of all the project activities related to successful implementation of performance systems at RBS. The main strategy focused upon the use of PIMMS systems utilizes online software which assists the HR department of the RBS bank to measure the performance of its employees, assess the impact of performance systems on employee performance and business results, and at the same time introduce and implement specific systems as per the requirement of the business. In the same year - 2000, the Royal bank of Scotland introduced a new performance management system with the help of a basic Microsoft Access database at about five of its centers and monitored over 1500 staff employees. The PMS systems which was known as the Productivity Improvement Measurement and Management System proved to be quite a success at RBS and gave considerable advantages to the management in measuring employee performances and processes, (Boris, 2007). However due to its standalone nature, the system could not be applied on a larger scale and expansion of this PIMMS system was rather restricted to the initial 5 sites only. Looking at the vast applicability and usage of the system, the RBS developed the PIMMS systems in a span of 1.5 years and expanded its usage with the help of the company’s intranet system. The system now caters to 15,000 staff employees located on over 85 RBS locations around the globe. 2.1 Advantages of PIMMS to RBS The RBS designed the PIMMS system as a capacity planning and operations management system, which easily allows integrating a number of issues in one system. The new PIMMS system is able to incorporate the following into a single system: List of Staff employees and their and nonattendance; List of skills possessed by employees at the time of joining RBS List of skills developed by employees during their serving period at RBS Calculating efficiency of the employee according to the output based time and quality The amount of work scheduled to each employee in terms of volumes – this is divided into 3 categories – received work, percentage of completed work and percentage of work remaining Regular process-measurement with the help of predetermined administrative-data system Predictive volume forecasting New initiatives by employees The above issues and concerns are all complied into one system – PIMMS. This integrated database allows the managers to take faster, accurate and efficient decisions while giving responsibility to staff members and their subsequent appraisal and promotion, (Roden, 2010). This new PIMMS system was structured from the bottom up approach and with the help of internal resources of RBS. No other external part of software assistance was taken to set up the system. Apart from the above listed major advantages of providing crucial information to managers, PIMMS system at RBS has helped to increase the attentiveness of the management towards maintaining efficient costs, working environment, employee needs, and importance of internal data management systems for effective business handling. The PIMMS system has become an indispensible tool for implementing and evaluating improvement activities. The management is assisted with rich and ready information regarding the overall business targets set by the company. PIMMS makes use of the common measurement and targeting techniques which helps the managers to spot any chances of improvement, and subsequently drive for constant improvement techniques to avoid any waste of resources, (Wright, Patrick and Snell, 1991). 3.0 Modules of the PIMMS systems at RBS and linked objectives In order to continuously meet the varying needs of its customers and maintain competitive advantages from its competitors, the RBS bank has to focus on constant up-gradation of its business systems. In order that the PIMMS system meets the above mentioned needs of the bank, the designers of the PIMMS system have designed it on a modular basis to offer complete flexibility according to the requirements of the business. This section studies the various phases / modules of the performance management system at RBS and the objectives linked with each module. Employee record module The working hours in RBS worldwide vary as per the operating environments. Employee records were used to be maintained manually using spreadsheets which were different each time in design and quality. These manually entered data were often erroneous, time taking and required high maintenance. Since the working hours vary from 24 hours to normal working of 8 hours per day, there were different schedules which were to be maintained. The entry of PIMMS helps to meet these demands – easier recording of staff employees and their hours, their holiday records, absent dates and skills, (Performance Management Handbook, 2000). Work measurement module  This phase of the PIMMS system helps to maintain a data about the volume of work available within a department / employee, volume of work completed by each employee, and the remaining work. Work report module  The PMMIS system also offers the management to create a set of 52 online work sheet reports that basically speak about the business performance, productivity of employees and departments, progress of work as per schedule. This report also incorporates the employee records as discussed earlier in the section. These reports generated are as per the requirements of managers belonging to different levels in the company, ((Thomson, Jeff and Varley, 1997) . Work forecasting module Forecasting of work schedule earlier is always advantageous for any business. PMMIS offers the benefit of forecasting of work by using recorded data and is able to forecast the work by at least 13 months in advance and on a short notice of 3 months also. The forecast is split into daily forecast and work volumes and staff allocated for the work. This helps the managers to allocate resources in time and provide training to staff the tackle the work. An exceptional characteristic of PIMMS is the capability to coalesce the data enclosed inside the different units into a single reporting collection. This offers the additional advantage of adding KPI (key performance indicators) to these reports which can be managed as per the hierarchy levels, (Schuler, Randall and  Jackson, 1987). Also a search online tool support queries of the users. The main issues that the PMMIS reports cover are: Key performance indicators like total productivity, competence and consumption, of resources; Forecasting of daily work and pre-scheduling of tasks as per responsibilities for as long as 13 months Progress charts of projects and performance levels of employees linked to the projects Volume of work remaining in different departments and by employees Details of individual working hours Matrix related to employees which show their capabilities, work allotted, performances, skills acquired and training requirements as well. 4.0 Execution of PMMIS system at RBS After the benefits were realized on a small scale, the bank decided to implement the Performance management system at its other centers as well. Rapid development of the system by increasing the internal host servers has allowed for execution of PMMIS systems for nearly 16,000 RBS employees. At first, the execution of PMMIS was focused upon the staff records and reporting which showed improvements in employee performance by a significant level. Later on, PMMIS was employed for the process improvements, and other issues like forecasting etc. 5.0 Employee training and cultural development The most important part of the execution and implementation phase of the performance management system PMMIS at RBS was the training of the staff and employees. Also, the change in culture coupled with the implementation of PMMIS was another target of the RBS management. A proper channelized face to face detailed training of the PMMIS system to the employees was imparted by the management. As employees were the actual end users of the system, they were given a through training of how the system worked and what were its advantages in supporting the daily activities and easy channeling the work responsibilities. The training team consisted of executives from the design team and they visited all the business areas of RBS sites and made sure that the employees learnt the correct method of using the tool, generating reports, interpreting reports and improve the results obtained. The design team elaborated the importance of integrating the system working into their daily tasks to obtain enhanced operational activities, (Symes, 2011). This approach to training has improved the operational awareness of staff by embedding the business processes surrounding PIMMS into their working day. Use of PMMIS has also driven a vast cultural change in the working environment of the company. Access to rich information at the right time and place has helped the managers to take faster and accurate decisions for themselves, employees and the management. This has in turn boosted the morals of the employees also, (Atkinson, 1997). Hotspots are easily identified before time; risk management approaches finalized before the damage is done are some of the few important benefits that were realized by the RBS employees within a short time of span of PIMMS execution. Till date, more than 15,000 employees are well trained in PIMMS system usage. 6.0 Project benefits With the help of faster and easier access to company and business information has helped the managers to save more costs, implement cost effective methods, introduce new products and services for the clients and also give more time to research and development of business objectives. Moreover, the efforts that were initially used in generating and maintaining client oriented personalized services are reduced due to the automation of many tasks in the operations chain. Removal of many tools within the operational chains functional at RBS also helped to remove a number of non productive activities. Therefore, this system also helped in identifying and quantifying the non-core and non-value-added tasks that existed in the system. Also, PIMMS offered assistance to managers to decide the timing of a particular activity and thus helped to meet the groups’ strategic objective of implementing a universal approach to activity timing. Before the introduction of PIMMS, the RBS management used an external software to decide the standard time required by each activity. For this purpose, the company analysts had to research and gather data from different sources at one place (external system). After this, the management had to match the process times of various activities to get an optimized solution which was a time taking activity. However, with the help of PIMMS all these activities were easier. As the managers were required only to log onto the intranet, upload their work and discuss the result with the operational units on site. This way, waste activities have been reduced. Also, the performance based management system suggests project scheduling and forecasting to improve the planning process. The system also helps to identify any gaps that that exist in the resource planning and subsequently states the demands, (Schuler, 1988). This has also helped the marketing department at RBS as it identifies the market demands and the impact of marketing campaigns on the business performance. 7.0 Conclusion PIMMS has substituted a surplus of methods and practices with an all-inclusive, easily accessible tool. Its achievement is confirmed by its increasing utilization across the various divisions of the RBS group. With the help of a long term financial stability and visibility offered by he PIMMS, the RBS management has started to identify the business needs, and the performance of processes to improve customer service and increase customer satisfaction. 8.0 References 1. U. S. Department of Energy, Office of Procurement and Assistance Management (DOE/PR), Balanced Scorecard Homepage. Available at: http://www1.pr.doe.gov/bsc001.htm 2. U. S. General Accounting Office, Performance Measurement and Evaluation: Definitions and Relationships, GGD-98-26, 1998. Available at: http://www.gao.gov/special.pubs/gg98026.pdf 3. Thomson, Jeff and Steve Varley, Developing a Balanced Scorecard at AT&T, Journal of Strategic Performance Measurement, August/September 1997, Vol. 1, No. 4, p. 14. 4. “Effects of Human Resource Systems on Manufacturing Performance and Turnover,” The Academy of Management Journal 37 (3), pp. 670-687. 5. Organizational design - - case study of RBS, middle East HR summit, 25 OCT, 2010, Neil Roden, Group Direction, Human resources. 6. Royal Bank of Scotland Group: The Human Capital Strategy, by Boris Groysberg, Eliot Sherman, 34 pages.  Publication date: Oct 26, 2007. Prod. #: 408060-PDF-ENG 7. Schuler, Randall S. (1988) “Human Resource Management Choices and Organizational Strategy, “in Readings in Personnel and Human Resource Management 3rd edition, eds. West Publishing. Pp. 24-39 8. Symes, Paul "Productivity improvement survey". Management Services. FindArticles.com. 18 Apr, 2011. http://findarticles.com/p/articles/mi_qa5428/is_199803/ai_n21419680/ 9. Schuler, Randall S. and Susan E. Jackson (1987). “Linking Competitive Strategies with Human Resource Management Practices,” Academy of Management Executive 1, pp. 207-219 10. Performance-Based Management Special Interest Group, The Performance-Based Management Handbook, Volume 5, ?Analyzing And Reviewing Performance Data,” February 2000. Available at: http://www.orau.gov/pbm/pbmhandbook/volume%202.pdf 11. Wright, Patrick and Scott Snell (1991). “Toward an Integrative View of Strategic HumanResourceManagement,” Human Resource Management Review1, 203-225.2 12. Kaplan, Robert and David Norton, The Balanced Scorecard, Harvard Business School Press, 1996. 13. Atkinson, Anthony, Linking Performance Measurement to Strategy, Journal of Strategic Performance Measurement, 1997. Read More