Performance Management Development - Essay Example

? Performance management XXXXXXXXXXXXXXX XXXXXXXXXXXXXX XXXXXXXXXXXXXX XXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXX Introduction Armstrong and Baron (1998) define performance management as both a calculated and incorporated methodology to bringing fruitful outcomes in organizations by refining the performance and increasing the competences of groups and individuals (Kanigher, 2005). It is a wide, complex function, usually carried out by the human resource department, and it incorporates undertakings such as training for enhanced performance, execution of employee growth programs, combined goal setting and recurring communication. Consequently, performance management can be said to be a logical process by which the general performance of an organization can be enriched, starting from individual level to team level. It involves establishment of within reach targets as well as clearly outlining roles (Kanigher, 2005). Development of Performance Management This discipline traces its origin in the 20th century, where managers developed the process to determine whether the remuneration paid to workers was reasonable (Kanigher, 2005). One of the earliest contributors to this theory was Fredrick Taylor, with his scientific management theory, which he developed by studying the work process scientifically. In his work, he studied how work was done and how it affected people productivity (Kanigher, 2005). His findings were that workers and managers need to cooperate with each other, work needs to be simplified for efficient results to be achieved and, he advanced the idea of “a fair day’s pay for a fair day’s work (Kanigher, 2005). This was during the industrialization era, and at that time, factory managers had little contact with workers leaving them to produce on their own. This left workers with poor motivation, because continuation of employment was the only incentive at that time. In his, “time and motion” studies, Taylor concluded that certain workers were suitable for certain jobs, to achieve efficiency (Kanigher, 2005). This is the basis of role definition in the contemporary business environment. This theory concerns itself with managing people’s performance. It attempts to understand the fundamental factors, which enhance employee relations to yield maximum organizational output. Taylor suggestions of presence of certain conditions to improve work performance paved way for future scholars and theorists in understanding what influences performance (Kanigher, 2005). This is the foundation of performance management and there would be no practical application of this concept in the absence of this theory. Douglas McGregor is another major contributor to the development of performance management theory and practical applications in modern business world. In his, “The Human Side of Enterprise” book, he proposed theory X and Y, which was a constructive and modest reminder of the ordinary rules for handling people, which are overlooked under the density of day-to-day business (Koontz & Weihrich, 2007). His ideas suggested there are only two fundamental ways of managing people; one is by treating them as lazy and disliking work, hence they will do anything to avoid work. They ought to be directed, assured job safety in order to consent accountability. This is theory X, which suggests dictatorial management style (Koontz & Weihrich, 2007). Another war regards workers as people devoted to objectives and, they will admit and pursue responsibility. They are self-disciplined and pursue organizational objectives without threat of punishment (Koontz & Weihrich, 2007). He regarded this as theory Y that proposes a democratic management style. Performance management entails understanding people’s behavior. This theory sheds lights on the sophistication side of employees. Though it suggests only two kinds of employee, it paved way for organizations to realize that the human aspect of an enterprise is complex, and exhibits numerous characters. After inception of this theory, managers would integrate Taylor’s findings with findings of this theory, with the aim of achieving optimal organizational performance. Integration of these two theories led to improved performance by employees and more scholars paid attention to organizational performance, which led to the birth of performance management as a discipline on its own. Herzberg’s Maslow theory of motivation is another fundamental contribution to the contemporary performance management practice (King, 2009). After studying the presiding theories on organizational management, Maslow argues that for efficient performance by the human component of an organization, two factors must be taken into consideration: human needs must be classified into classes, and careful consideration should be exercised in understanding how these classes relate to each other (King, 2009). He classified them as shown in the figure below, starting with the most important at the bottom and least important at the peak. This model argues that if an organization can find the level which every employee has reached, then it will be able to reward such an employee with suitable rewards, and in return, the employee will perform duties assigned efficiently (King, 2009). Though this model focuses on employee aspect of an organization, its fundamental concept was finding out what influences performance, and how to provide the condition that enhances optimal performance. By identifying and classifying human needs into classes, this model lay down the guidelines of understanding human needs as exhibited in the contemporary organizational environment. This model contributed to the understanding of the newly incepted performance management discipline, by introducing the concept of classifying human needs which was absent in the previous studies. Critics of this development in understanding performance management, argues that, classification of human needs is impractical in the organizational context. This led to the emergence of management by objectives studies in understanding organizational performance management. Management by objectives emphasizes the prominence of organization goals as an instrument to assist managers in their effective accomplishment of their tasks and duties (King, 2009). This concept is inter-linked with planning concept, and it entails the existence of objectives and the use strategic planning techniques to achieve the objectives (Sapru, 2008). Peter Drunker popularized management by objective concept in his book, where he suggested that organizational objectives should be decided collectively, and not be imposed on subordinates (King, 2009). Achievement of such objectives will be easy, because mutual decision gives them support from every organizational member. It concentrates attention on achievement of objectives through involvement of all concerned individuals (Sapru, 2008). The major assumption of this theory is that people perform well when they recognize what is projected of them, and they can recount their individual goals to organizational goals (Sapru, 2008). Management by objectives presents an autonomous style of administration, which bargains many benefits such as high self-confidence, employee enthusiasm; effective and focused leadership and unblemished objectives beforehand for all concerned parties (King, 2009). Performance management in modern organizational context Various scholars have contributed to the practice of performance management. Some of the practices applied today include, knowledge centered administration, benchmarking, overall excellence mechanism among others (King, 2009). These practices are not traceable to a single scholar finding, rather, they are a combination of various findings, during different era. The observable trend is application of management by objectives, where organizational sets goals and come up with strategies of achieving them (Sapru, 2008). It during setting up of these strategies where various factors suggested by scholars to have an impact on overall organizational performance are incorporated to successfully manages people and deliver results. Another observable aspect of performance management in the contemporary organizational context is creation of various departments within organizations, based on specific skills (Koontz & Weihrich, 2007). These departments allocated tasks with a benchmark, which they should achieve. Non-Financial Performance Indicators These are qualitative measures of either individual or entity performance that are quantifiable. With exemption of Taylor’s theory argument on, “equal pay for a fair day’s work”, the above theories concentrated on non-financial factors that affect organizational performance (King, 2009). They include employee satisfaction, promotions and demotions, employee relations, employee-management relations, management capability among others. Development of Non-Financial Factors These factors have their roots on classical and neo-classical management theories. These factors have always played significant roles in understanding performance management concept. They did not receive much attention until peter drunker, introduced management by objective concept (King, 2009). In his findings, Drunker suggested qualitative aspects, which an organization should pay attention to in order to achieve success. Eventually, these aspects need to be considered in determining an organization worth and considered as non-financial performance measures. .These factors are present in all organizational aspect unconsciously (Goel, 2008). This is so because in practice, non-financial aspects of an organizational are the key determinants of an organizational overall performance. Conclusion Performance management is setting and the implementation of organization strategies, determining the gap between actual and targeted performance and determining organizational effectiveness and operational efficiency. It is evident that management theories, which are the foundation of performance management concept, lay significant importance on the human aspect of the organization (Goel, 2008). This study finds out that the key determinant of organization performance human aspect of an organization, and in a narrower sense, the human/employee relations. From basic knowledge, it is agreeable that human beings are complex beings. With performance management being centered on them, its’ becomes more complex especially when it comes to their relations, making performance management a complex concept (Goel, 2008). This study also concludes that the proponents of management theories concentrated heavily on human aspect of organization and failed to pay attention to diverse cultures, which play important roles in management. For instant, while communist nations may find theory X and Y mocking, because they believe on unity and that all people love work (Goel, 2008). On the other hand, presenting a model where manager’s sets objectives for subordinates and hands them to implement might have dire consequences in Asia continent where people believe in teamwork during decision-making and will shy away from individual rewards and praise. References KOONTZ, H., & WEIHRICH, H. (2007). Essentials of management: an international perspective. New Delhi, Tata McGraw-Hill. GROTE, R. C. (2002). The performance appraisal question and answer book: a survival guide for managers. New York, American Management Association. SAPRU, R. K. (2008). Administrative theories and management thought. New Dehli, PHI Learning. GOEL, D. (2008). Performance appraisal and compensation management. New Dehli, Prentice- Hall of India. KANIGHER, R. (2005). The one best way: Frederick Winslow Taylor and the enigma of efficiency. Cambridge, Mass, MIT Press. KING, P. W. (2009). Climbing Maslow's pyramid. Leicester, Matador. Read More