Performance Management as Instrumental Tool - Essay Example

Performance Management Performance Management Performance management is an instrumental tool which motivates employees. It helps in devising strategies for the employees which can convert their potentiality into excellent performance. Performance management techniques help in accomplishing strategic, management and operational goals of an organization. Foundation of Performance Management The theory of performance management is not a new concept but has evolved gradually over the years. There have been additions to the concept proposed by several theorists, keeping in mind the different business situations (Kandula, 2006, p. 12). Hull’s Drive Reduction Theory This theory believes that motivated behaviour creates unwanted drives and desires in an employee and hampers his/her work equilibrium both externally and internally. Efforts should be made to reduce the unwanted desires/drives of employees (Kandula, 2006, p. 12). Applications of Non Financial Indicators in Performance Management Non Financial Indicators Applications Research and Development This department of the organization should be responsible for innovation. Implementation of the policy would enhance their research skills and would lower the development costs. Management Development Extensive training imparted to the employees improves their creativity and increases their product knowledge. Training imparted to employees increases the efficiency of employees. Work Culture The aim is to increase the diversity in workforce. The policy aims at removing gender-biasness and racism. Environment Companies should aim at saving energy, conserving resources and lowering the emission of Co2 for a healthy environment. This improves the image of the company. Graduate Recruitment Recruitment of fresh graduates increases the zeal of the organization and brings innovation in the organization. Health and Safety Precautions Ensuring health and safety measures taken by the company ensures safety and security of employees. Higher participation in academy programs Education programs should be implemented in an organization so that employees can benefit from the education programs and gain knowledge (Thyssenkrupp, 2011). Benefits of Applications of Non Financial Indicators in Performance Management Non-financial measures have a significant advantage over financial measures. They focus on the long term goals and strategies of the organization rather than the short term goals. They give an insight into, how the company is advancing. They help in evaluating the operational and organizational goals of the company. Non-financial objectives help in strengthening the framework of the company and help in achieving long term operational goals (The Knowledge behind the News, 2000). Applications of Performance Management Sears Holding Corporation is the third largest retailer in the USA. After the company merged with Kmart Corporation, It started following the performance management technique which led to a healthy working atmosphere and increased the leadership skills of the managers and improved the productivity of the employees (Smither, and London, 2009). The company CISCO has introduced a new software called Cisco Application Performance Management (APM) service which helps employees to have unlimited access to wireless Local Area Network and data centres (Cisco, n.d.). This has helped in reducing the operational costs, strategic costs, initial capital outlay and sales turnover Significance of Performance Management Competitiveness The increasing competitiveness among employees and business organizations has steadily increased. The human resource of the organization can only help in achieving its organizational goal and this can be a significant tool in increasing healthy competitiveness among employees. Motivating Employees When an employee is motivated, his/her self actualization and self esteem increases. They excel in their work. Performance management as core of HR Practices such as rewards, career and team building drive human force to work better for the organization. Work Culture The integration of personal and professional goals helps in building up a congenial working environment. Measurable Management The work of the employees becomes measurable and manageable which makes the work of the manager’s easy (Kandula, 2006, p. 06). Techniques/Strategies of Performance Management The devised strategies help in enhancing the skills of the employees. The below mentioned points are some of the techniques used for performance management. Techniques Effectiveness Reward Strategy Incentives, perks give a moral boost to the employees and enhance the skills of the employees. Career Proper career building path of an organization gives clarity to the employees about their professional goals and their job roles. Team Dividing the workforce into smaller teams increases the efficiency of managers and employees, as each team specializes in a particular task. Culture The culture of the organization is congenial and permits creativity to flow among employees. Measurement The performance and work of the employees become quantifiable and measurable. This helps the mangers to check on the consistency levels of the employees. Competency It increases the core competency of the employees. Leadership The leadership skills of the managers are enhanced, as they help in motivating the employees, which results in motivation driven performance (Kandula, 2006, p. 02). Let us take an example and evaluate the effectiveness of performance management. If an employee spends more time in interacting with the clients than spending time in the office, it would enhance their efficiency levels. This is a practical approach which helps the company to achieve its strategic goals. The performance management process includes the following: Pre-requisite Job analysis is a perquisite for performance management. Understanding the job role not only gives clarity to the employees but also a clear understanding of how their performance affects the department. Performance Planning It includes consideration of 1.Results (outcome of the employees), 2.Behaviour (on how a job is done in an organization/department) and 3.Development plan (identifying areas that need improvement and setting goals for each department). Performance Execution Performing the tasks on which goals were set. Performance Assessment Both the employees and manager are responsible for evaluating the extent to which desired behaviours have been displayed (Mitchell, 1996, p. 02). Performance Review A meeting between employee and manager to review and analyze the performance (Rudman, 2003, p. 02). Performance appraisal To make a report on the tasks performed by the employees and assess the performance (Smither, and London, 2009, Why Implement Performance Management System; Harvard Business Press, 2009, p. 09). The above mentioned process improves the effectiveness of the organization as a whole department. Problems in Implementing the Techniques of Performance Management Implementation of performance management strategy requires detailed and cautious planning. 1. Rationalistic approach The strategic and operational goals of a company are not logical. A rationalistic approach should be maintained for attaining them. 2. Engineering alignment The linkage between human process and business strategy is very difficult to implement. To implement effective performance management, the alignment of the above mentioned factors is important. 3. Culture Cultures of different employees are varied in the organization. The challenge of the manager is to implement policies which help the employees to blend easily with each other. 4. HR Competency Successful implementation of this policy requires usage of both qualitative and quantitative methods. A few HR mangers have the skill to blend both the techniques. 5. Utilitarianism concept To attain cheap labour and retaining them, is a huge task for the HR. Most organizations cannot utilize the employees of the organization effectively (Parsons, 2008, p. 41). 6. Accountability Performance Indicators should be created for each department of the organization. So each employee can track their own performance. 7. HR Policy The traditional practices of HR should be discarded and new methodologies should be accepted. 8. Integration An integration of all the activities/policies of the organization should be implemented. This avoids conflicts and confusion among employees. 9. Employee participation Participation of the employees in implementation of this policy is quite weak. There should be equal participation from both the sides (Kandula, 2006, p. 02; Summers and Hyman, 2005, p. 16). Limitations of the techniques of Performance Management Techniques Limitations Reward Incentives may provide a boost to the employees but it may be temporary. It can also decrease productivity levels and morale of the employees (Pulakos, 2009, p. 05). Career The career building path may not provide clarity to the employees. It may create confusion among them. Team The teams of the organization may only focus on themselves and not view the organization as a whole. Culture Since the cultural atmosphere is varied, employees may face difficulty in adapting to the policies of the organization. Measurement Performance Indicators can check the consistency levels of the employees but cannot be quantifiable. Competency Creating a core competency for the organization becomes difficult. Leadership A few managers have good leadership skills. Leaders are born and not created. Conclusion Performance management measures may be effective for both small and big organizations. It gives clarity to the company’s goals, objectives and provides a clear framework to the employees and managers of the organization. Performance management system is being utilized by some of the companies who have benefitted from it. The theory believes in integrating the personal and professional goals of the employees. This leads the employees to view the organization as a whole and not as a separate entity. This theory emphasizes on creating a congenial and positive working environment. References Cisco, n.d. Application Performance Management Service. [online] Available at: < http://www.cisco.com/en/US/netsol/ns670/networking_solutions_solution_category.html> [Accessed 13 February 2013]. Harvard Business Press, 2009. Performance Appraisal: Expert Solutions to Everyday Challenges. Boston: Harvard Business Press. Kandula, S. R., 2006. Performance Management. New Delhi: Prentice Hall of India Pvt. Ltd. Mitchell, R., 1996. Implementing Performance Assessment: Promises, Problems, and Challenges. London: Routledge. Parsons, P., 2008. Ethics in Public Relations: A Guide to Best Practice. Berlin: Kogan Page Publishers. Pulakos, E.D., 2009. Performance Management: A New Approach for Driving Business Results. New Jersey: John Wiley & Sons. Rudman, R. S., 2003. Performance Planning & Review: Making Employee Appraisals Work. South Wales: Allen & Unwin. Smither, J.W., and London, M., 2009. Performance Management: Putting Research into Action. New Jersey: John Wiley & Sons. Summers, J., and Hyman, J., 2005. Employee Participation and Company Performance [pdf] Available at: < http://www.jrf.org.uk/sites/files/jrf/1859352995.pdf > [Accessed 13 February 2013]. The Knowledge behind the News, 2000. Non-financial Performance Measures: What Works and What Doesnt. [online] Available at: < http://knowledge.wharton.upenn.edu/article.cfm?articleid=279> [Accessed 13 February 2013]. Thyssenkrupp, 2011. Non-financial performance indicators. [online] Available at: < http://www.thyssenkrupp.com/financial-reports/10_11/en/non-financial.html> [Accessed 13 February 2013]. Read More