Performance Management: The Dynamics of Change - Essay Example

? PERFORMANCE MANAGEMENT THE DYNAMICS OF CHANGE The incidence of Organisational culture upon the performance of employees and organisations- in the micro sense and the economy as a whole-in the macro perspective is a manifestation of the criticality of this function. The globalisation effect has also ensured that the interlinked organisations, businesses and economies tend to reap the benefits or face the trouble for this concept. The concept of Organisational culture is a bit troublesome, given the fact that there is no concrete definition for the word ‘culture’, except a broad based reflection on a the of values, ideals and customs of a particular set of people. According to Hofstede, organisational culture is the collective programming of the mind which distinguishes the members of an organisation from another and generally consists of set of practices unique to a particular organisation. (Black 2003) Thus a positive organisational culture that promotes growth and kinship among the employees across verticals and locations is one that ultimately transforms itself in better performance and higher profits. It is a cinch to understand the reverse is equally effective as a stagnant organisational culture results in higher attrition, poor employee morale and bad balance sheets. The best example of both can be seen in the performance history of IBM. In the eighties, IBM was a dominant market leader with more than 80% of market control and yet they suffered major losses between the period of late eighties to early nineties due to the short sightedness and complacency that was getting to the employees from top down. The failure of some key projects pushed the company back by some millions and also gave mileage to the strongest competitor-Microsoft. Fortunately IBM revamped its policies to realign its corporate goals and started harvesting a performance centric organisational culture which reaped huge benefits by pushing it back on the list of top companies. The testament to the strength of cultivating good organisational culture is apparent as both companies- Microsoft as well as IBM have featured in Fortune’s ‘Most admired company list’ this year. (Fortune.com 2011)Thus it is an omnipresent fact that good organisational culture reaps huge benefits in terms of employee and customer goodwill as apparent from the cases. The next step would be to understand if the change in organisational culture can actually help in changing the fortunes of the company. Ideally it is better to establish a good corporate culture from the nascent stages of a company but as in the case of IBM it is possible that a company with a good organisational culture can also suffer due to overconfidence. Once the need for a policy revamp is established it becomes imperative on the part of the organisations to do some introspection to understand the best way to channel the mechanism of change. A good example of this is the found in the case of Hewlett Packard (HP) which faced bad corporate culture and managed to force a change for the better. Some years back the attrition rate in one of its branches rose to 20% then 50%. The employee morale was very low and there were multiple complaints of “excessive pressure”. HP managed to turn the situation around by asking employees to focus on personal goals as well as corporate ones. The employees receive recognition for achieving the personal targets and despite the reduced hours of work, the company had achieved better results in performance and employee retention. (Sadri G & Lees B 2001) As the need for change in organisational culture is established it becomes necessary for the senior management to take action steps to ensure things get back on track. The achievement of a good organisational culture is brought about by a top down approach as the senior management which has the authority to start new processes or change redundant policies, needs to develop action steps to achieve tangible results as seen in the case above. For affecting the process of change it is necessary to identify the organisational culture that is in practice currently in the organisation and the good and bad points about it. The best way to understand the present culture is to take surveys and ask for employee feedback on the issues and problems facing the organisation. The free-flow of communication can be achieved by keeping the window open for maintaining anonymity by establishing channels for whistleblowers, if so required. Once the employee perceptions on the organisational issues, goals, values and missions are gathered they need to be analysed and streamlined for the process of prioritization. Then concrete action steps need to be formulated which should be aligned according to the business environment that the organisation operates in. The fact is the stronger the organisational culture in practice the more difficult it would be for them to accept change. (Brenton AL and Driskill GW) A good strategy in this case would be to ensure the support of the leaders for necessitating the change mechanism. The role of HR managers in facilitating the necessary changes in the organisation cannot be overemphasized. The HR managers are the harbingers of the change charted out by senior management and it is their responsibility to enforce the new rules and policies for the betterment of the organisation and handhold the resources through the process of transition. The HR needs to put the rules in clear codified manner that is in grasp of all levels in the organisation. Organizations with clearly codified and enforced cultures enjoy great employee and customer loyalty, in large part because they are effective in either altering ineffective behaviours or disengaging from values-challenged employees in a timely manner. ( Hessket Sasser and Wheeler 2008) Thus the role of HR manager would involve establishing clearly codifies rule across the verticals in sync with the organisational goals. The culture is enduring and dynamic and new processes however beneficial take time to be incorporated. Leaders must adhere to the rules they hope to establish and ‘be the change’. They must set examples by honing to the key aspects of organisational culture-values, behaviours, measures and actions. The functionalities of the HR is to understand the business to formulate key strategies, continue focus on the key business goals, measure the change in performance by use of metrics and prepare for future by mode of strategic planning. Strategic HR management helps in identifying core competencies and enhancing organisational effectiveness by strategic handling of organisational processes, customer service and feedback and financial contributions. (Jackson and Mathis 2008) Thus HR helps in identifying and nurturing the core competencies of the resources and this is critical to increase organisational effectiveness as in the case of technical or speciality oriented organisations it is vital for the organisations survival to tap and utilise each resource to its full potential. In the case of global organisations there are various issues that can only be tackled by having a dedicated HR team. The issues of time difference, language gap and culture gap can play havoc in the larger organisations with matrix organisational reporting structure as is common in today’s corporate scenario and the HR managers effectively reduce errors and ensure proper knowledge management to maximise employee performance and profitability. Thus the HR leadership has to play a vital role in ensuring smooth functioning of the organisation. The case becomes even more complicated when there are mergers or acquisitions that take place and only HR has potential to bridge the gap between both the organisations to establish a common goal and boost employee morale. The organisations may face difficult times due to host of internal or external factors as apparent during GFC in the recent past and it is the combination of different HR strategies that the organisation can survive and sustain through these times. Coaching Culture and Impact The common sense approach to maximising performance of an organisation reflects that the success of any organisation, irrespective of its size, resources, origin is directly proportional to the strength of the leadership. Effective leadership produces magnificent results and bad leadership sinks the ship irrespective of the skill of the crew. Thus the vital element here is also the type of leadership as well as the mode of it. The conventional leadership models tended to be more autocratic that leaned heavily on the McGregor Theory X model with the managers practically using methods of scare tactics at their disposal to extract the best out of the employees. The model emphasises on the autocratic role of the manager due to fundamental belief in aversion of work on the part of the employees. It stresses on higher degree of control as according to its tenets the employees have natural aversion to work and they need to be coerced, controlled, threatened or directed to get them to achieve organisational objectives. (Clark Donald n.d) This sort of culture is unfortunately still rampant in many countries and organisations and as is obvious it goes against the fundamental beliefs in employee welfare and also transforms itself into loss of productivity and business. Thus this process is one where the organisation stands to lose the valuable resources and bear losses on the financial front as well. The coaching culture that came into being recently has much to offer in terms of results and is quickly gaining popularity across organisations all over the globe. The coaching culture is one which negates the Theory X’s underlying belief that people are fundamentally lazy and need to coerced to work . Instead this concept believes that employees are basically hardworking and helpful directions from the ‘coaches’ or seniors can help them to achieve their potential. As in sports, the players have natural talent and potential and the coaches hone this talent to extract the best out of each player thereby ensuring the win. The coach acts as the friend, philosopher and guide for the employee by nudging them in the direction of individual growth thereby attaining the alignment with organisational growth. The coaching culture is one where the leaders and managers try to pull out the best from the employees by assessing their potential in the past or fresh interaction with them, initiating dialogue to understand key issues, provoke a questioning attitude to the issue, creating scope for issue resolution by honest feedback and handholding through their errors. The leadership needs to be firm and the leaders should emulate the rules themselves to serve as good role models. The process of coaching is not a baby-sitting enterprise; rather the manager should challenge the resource to find ways to objectively handle the situation thereby developing critical thinking ability. It is essential to find a balance between being an assertive manager and also retain patience and friendly nature of exchange so as to retain trust of the employee. Thus the coaching manager is one who uses coaching to develop talent in their business unit, in order to achieve business or organisational goals. The issue of performance management is concerning with minimising the gap between actual results and desired results. As Daniels points out, the Performance management is achieved by proper performance appraisal, performance planning and coaching. (Daniels 2006) The coaching culture ensures dramatic impact upon the performance management as it deals with realising actual performance and coaching the resource to achieve the desired potential. In the case I would be in an organisation under autocratic management, I would definitely ensure that the management is notified the benefits of coaching culture in abstract and real terms. The pressure to increase performance would only serve as an opportunity to enforce proper performance management system across verticals. Due to the obvious obstacles in an autocratic management, firstly the leaders would need to be apprised of the benefits of coaching culture. Their feedback on the possibility and necessities to make necessary changes would have to be taken into account. The incentive structure in terms of better financial gain, rise in employee motivation and finally better compensation by virtue of trickle down effect needs to be emphasized. Once the leaders are on-board the task becomes relatively easier as they would start performance planning by charting the goals and targets to be achieved. The case studies of organisations like HP and IBM which has successfully employed this culture needs to be presented to motivate the leaders. The leaders would then need to put this to use in their individual units. The individual improvements that are desirable need to be charted and effective dialogue should be taken up to decide on steps to achieve them. By analysing and listing the individual resources that would benefit from performance coaching the process is taken forward. The results should be monitored to mark the impact by modes of 3600appraisals and feedbacks of employees. Feedback should also be taken from the customers to judge whether there has been a difference in service and the areas where further improvements are essential. The employees who have efficiently managed to cover the performance gap need to be given proper recognition to boost morale. Thus the implementation of performance management systems ensures rise in performance levels across the organisation and transforms into tangible results in terms of higher employee and customer satisfaction, stronger organisation culture that propels alignment of resources with the organisational goals and targets and achieving all round improvement in overall performance and profitability. Works Cited Black, Richard. Organisational Culture: Creating the Influence Needed for Strategic Success. 2003 Brenton, Angela Laird and Driskill, Gerald W. Organizational Culture in Action: A Cultural Analysis Workbook California: Sage Publications. 2011. Clark, Donald R. “Leadership & Human Behaviour” n.d. Web. 30April 2011. . Daniels A. & J. Daniels. Performance Management: Changing Behavior That Drives Organizational Effectiveness, Performance Management Publications. 2006.  Heskett, James L. Sasser, WE. and Wheeler Joe. “10 Reasons to Design a Better Corporate Culture” HBS Working Knowledge. HBS.edu 22 December 2008. Web.30 April 2011 < http://hbswk.hbs.edu/item/5917.html > Hunt, James M. and Weintraub, Joseph R. The Coaching Manager: Developing Top Talent in Business Jackson, John H. and Mathis Robert L. Human Resource Management, Mason: Thompson Learning, 2008. Sadri, Golnaz. and Lees, Brian. "Developing corporate culture as a competitive advantage", Journal of Management Development, Vol. 20 No.10, 853: 2001. Print Read More