Measuring Organizational Performance, Key Performance Indicators - Essay Example

The Running Head: Measuring Organizational Performance   Your name:   Course name:             Professors’ name: Date: Outline Background Performance measure Background Key Performance Indicators (KPI) term is most over-used term and little understood term in management and development in business, but in theory, the term Key Performance Indicators provides a series of measures against investors or managers in the business can judge the business and how it perform in a short or long term. When Key Performance Indicators is properly developed in a business, it will provide employees of the business with clear goals and objectives of the business, and this will be coupled with an understanding of how these objective and goals will relate to the overall success of the business. Key Performance Indicators (KPI) is a tool in business which are used to identify and measure those aspects that determine success in the business. The main focus of Key Performance Indicators is to identify measures that inform the organization how well employees in an organization perform against pre-set success factors in the organization. Key Performance Indicators in any organization follows a number of steps that have been laid down by the organization, these steps are: to identify strategic objectives of the organization, to identify success factors which are based on the objectives of the organization, to define goals of the organization that guide actions of each employee to achieve organization goals, and lastly, what are the results that contribute to the organization’s success. Key Performance Indicators are used as part of Kaplan and Norton’s Balance Scorecard. Performance Measure Record Sheet Measure Recruitment and Job promotion Purpose To Increase job efficiency in the organization Relates to Human resource performance Target After every 3 months in a year Formula To use internal mechanism in Human Resource in recruitment and job promotion. Frequency Quarterly Who measures Vincent, Kim Source of data Contacts with departments Who acts on data Should be Vincent but he should be assisted with departmental heads What do they do They are in charge of recruitment and training in the organization Notes and comments Need to examine business needs Date/Issue number 04/01/2011 Recruitment and promotion opportunities are considered as an important aspect in an organization. Job satisfaction with promotion opportunities in a company are directly and indirectly related to each other and are considered to be a critical factor to be considered in an organization. Employee promotion in a company usually will make a different in influencing an employee from being satisfied. Promotion for employees can be implemented in various forms and its rewards are diverse. For example there are those people who will get promotion for working in a company for a longer period of time, while there are those who will get promotion as a result of his/her achievement in the workplace. But all of this will make an employee to be satisfied with his/her work. Promotion and its reward in an organization may be under the direct control of a company but these two criteria have significant effects on job satisfaction. These two factors can be used as a tool to produce a beneficial outcome for an employee and the company which the employee is working for. Measure Education and self development Purpose To improve employee skills Relates to Human resource performance Target After every 6 months in a year Formula The use of company seminars and other institutions Frequency Half annual Who measures Joseph, Natasha Source of data Random selections of employees in various departments Who acts on data Should be Joseph but he should be assisted with departmental heads What do they do They are in charge of training and company organization. Notes and comments Need to examine business needs Date/Issue number 04/01/2011 Self development: those companies who don’t want to improve its employee’s skills, they risk losing their talented employees to the competition. While those companies who maximize the creativity abilities and talents of its employees, will have an advantage than those companies which don’t. It has been noted in many companies that employees who are engaged in their work have a higher level of performance in the organization and are usually satisfied with their works. According to Dr. Edwards Deming said, “Companies should concentrate on making sure their employees they improve their skills”. Employees may report to work, but are they productive to the company, most employees will be committed and engaged when there is a platform for them to contribute their skills and ideas to the company; this usually gives them a sense of ownership and pride to their work. Another way in which a company can make their employees to be satisfied with their job is through training and education; this usual motivate employees and it make them to be more productive and innovative. For example, at Federal Express, all customer service personnel are given six weeks training before they handle any customer. Organization should realize that learning does not stop and testing for employees will continues throughout their employment tenure in the company. A well trained employee in a company is capable and willing to assume more control over his job and an employee who is well trained is complain less, is more satisfied with his/her job and is more motivated. Most employees will seek work in a different company for the long term rather than monetary compensation; they desire their contribution to be recognized in the company. Measure Communication and reporting Purpose To improve understanding in the company Relates to Human resource performance Target Weekly affairs Formula The use of departmental meetings Frequency Weekly Who measures Joseph, Natasha Source of data From all the employees in the organization Who acts on data Should be Joseph but he should be assisted with departmental heads What do they do They are in charge of organization Notes and comments Need to examine business needs Date/Issue number 04/01/2011 Many of the research that touches on job satisfaction, in the past are asking supervisors to establish priorities on the problems that confront them, and good communication was ranked number one. These findings in this research are not surprising because good communication between employees and employers or employees and employees themselves, will make the company work efficiently. Communication in a company usually determines the direction the company will take and at same time the company motivates and brings understanding to its employees on the purpose and goals of the organization. Sometimes communication in companies is pervasive and often thought to be every employee responsibility. However, it is the duty of the authority in an organization to pinpoint problems that affects communication in the company. Although, communication can be difficult management task, but it is effective to make employees be satisfied in their works. Measure Management leadership and commitment Purpose To improve organization structure in the organization Relates to Human resource performance Target After every 3 months in a year Formula To use internal mechanism in Human Resource in recruitment and job promotion. Frequency Quarterly Who measures Maxwell, Timothy Source of data Contacts with departments Who acts on data Should be Maxwell but he should be assisted with departmental heads What do they do They are in charge of recruitment and training in the organization Notes and comments Need to examine business needs Date/Issue number 04/01/2011 People who are committed to an organization are less likely to quit their jobs and accept other jobs in another organization, at same time they are likely to be tardy or absent from work. As a result of this, the organization will avoid high turnover which is associated with hiring of new employees to replace those who have left the company. Furthermore, the organization will gain from improve customer satisfaction because long-tenure employees in the organization will have better knowledge of how to treat their customers, at same time many customer would like to served with same employees in the organization. Employee being committed to an organization has been found to motivate employees in the organization, and this in return will make the employees to have higher job performance. It has also been seen that employees who are committed in an organization, will exhibit strong leadership qualities in the organization. Measure Organizational culture Purpose To improve understanding in the organization Relates to Human resource performance Target After every 3 months in a year Formula To use various departments to promote understanding Frequency Monthly Who measures Hilda, Jane Source of data Contacts with departments Who acts on data Should be Hilda but he should be assisted with departmental heads What do they do They promote understanding in the company Notes and comments Need to examine business needs Date/Issue number 04/01/2011 An employee may spend more time with those he/she work with, sometimes it is more than what they spend with their families. For an employee in an organization to be content, time must be valuable on his/her part. When an employee is engaged, he/she is safer on his/her job and he/she will be productive and more willing to delight the customers of the organization. It is for these basic reasons that organizational culture in the organization matters; to think about the working environment and working relationship inside the organization. When a company focuses on building an organizational culture, it a way of showing its employees they are the most valuable assets in the company. Nowadays people looking for a new organization are more selective than ever, organizational culture in an organization will be part of package that a prospective employees in an organization will look at when assessing employment in your organization; most of people nowadays will want more than a salary and good benefits in an organization; what they are looking in an organization is their culture. Measure’s strengths and shortcomings Recruitment and Job Promotion: recruitment within an organization can be done either internally; hiring within the organization or externally; hiring from outside the organization. There are advantages of hiring of workers through an internal recruitment; it is more than just cutting costs of advertisement because it will offer opportunities for current employees of organization to further their careers in the organization. Recruiting within an organization is also a way of maintaining and employee who was considering leaving the organization, the organization will save on the cost of saving a new employee at same time the organization will save on cost of advertising outside the organization, internal recruitment is also a fast and less costly because it adds merits because the current employees in an organization will be familiar with the entity, lastly, an organization may recruit from outside the organization but they may discovered later that they may have a member who doesn’t fit well into the general environment and the mission and vision statement of the organization which he/she is current working for. Internal recruitment within an organization has the following disadvantages: first of all the size of prospective applicants is considerably reduced in the organization, external recruitment usually provides the organization with broader skills pool and wider experience, but in the case of internal recruitment all this may be lacking to a person recruited internally, an employee who responds to internal advertised position and he/she is offered the job, the employee might discovered that their fellow employee resent that promotion; this could prove very challenging for an employee in his new position in the company. If an organization will recruit internally, there will be a possibility of having another empty position to be filled within the organization; with this the organization will have to recruit externally to fill this position left vacant. Education and self development: this is a major factor that will determine long term profitability of the organization. For an organization which invests in the development of employee skills and education, they always improve their productivity. Training will help an employee adjust to rapidly changing job requirements in the organization. Education and self development in an organization will create a pool of readily available and adequate replacements in the organization, in case an employee leave or has been promoted to another position in the organization. The organization will be able to enhance it ability because of availability of knowledgeable employees in the organization. Education and self development inside the organization has the following disadvantages: firstly, the organization will lose a lot of time during training of its employees, secondly, the company after training it employees; it’s may lose its qualified employees to another organization. Communication and reporting: this may take through a formal channel of the company structure, and is along the established line of authority in the organization. There is two types of communication in an organization: formal and informal communication. These types of communication have both advantages and disadvantages. The advantages of formal communication are that it helps fix responsibility in the organization and it also help in maintaining authority relationship between individual within the organization. It has limitation which are; it time consuming and cumbersome and at time messages or information may be distorted. In informal communication sometimes it may be difficult for the organization to fix responsibility on the accuracy of information because such information is oral and may be difficult for an employee to pass relevant information. Management leadership and commitment: This leadership is as results of ability of a person to have magical ability to lead an organization and they transform the organization to their favor. The major advantages for a charismatic leadership in the company are that it can make the organization to achieve positive changes and results. But limitation of this type of leadership is that it can be misused for personal gains because of personal charm and charisma of a leader. In Transformational leadership; the organization cares only on growth of the employees in the organization. This type of leadership encourages participation of employees in decision making processes and this will have a positive effect on employees because they will be encouraged and feel wanted in the organization. Limitation for this type of leadership is that sometimes the level of enthusiasm in the organization can wear out employees, and in case the goal attainment of an organization is not achieved, it will have a negative effect on the company. Lastly in Transactional leadership- that rewards and punishment will stimulate employees in an organization to perform. The advantage of this type of leadership is that it reinforces the use of promotion performance among the organization employee. Organizational culture: strong culture in an organization will maximize the ability of an employee for the larger good of the organization. The limitation for organizational culture, organization with weak culture will encourage bureaucracy. Review Recruitment and job promotion can be wonderful events in an employee life in the company, new responsibilities, more pay, and increase benefits. This list can be long depending on where an employee is working in an organization. Sometimes promotion can mean earning few dollars for a lot more work, but some of promotions in an organization can’t be called promotions though they are treated or presented as such in an organization. There are various ways in job promotions can be improved in an organization: increase in salary for an employee for a job well done can be a swift motivator for an employee performance in the company. Each year the organization should review employee job each year and this will make the organization to note the achievements of an employee in an organization, this will determine whether the skills of an employee are benefiting the company. It should be understood a job promotion without a raise can make an employee to be gratified, just as much as pay raise without a title change. When an organization has a clear and consistent structure that deals with job promotions, will have a positive impact in the productivity in the organization, and this is based on the natural human response to a rewards system. In recruitment, the organization should have a clear structure that deals with recruitment, but at same time if there is a job vacancy inside the organization, the company should first advertise it internally. Education and self development: every employee in an organization would like to improve his/her life as some point in their lives, at some point an employee will reach the end of one path and then decide moving to the next situation will bring a refreshed perspective on his/her life. Education and self development is a way of an employee refreshing his/her perspective in his/her work place. A human being is a creature who is not perfect but able to learn, education for employee will play a major part in the organization, taking into consideration an organization can afford only the best specialists; the best ones are not born but they are trained to be the best. No matter how experienced employees in an organization may be, they still need education to improve their knowledge and learning new things. To help them, the company should make sure employees in a company are placed in a position that utilizes their talents and are not bound to fail. Set goals and standard that can be easily achieved for each position in the company, “and make sure employees in the company know what each goal and standards entails. Employers should also give regular and timely feedback to every employee and they should not give employee challenges that are impossible to tackle in the company. Communication and reporting: what make a good working environment in an organization? This can be defined as a good working environment in an organization is whereby employees are productive and communication flow easily; employees in a good working environment in an organization will feel valued and know how they contribute to the “whole picture” in the organization. it is the duty of the authority in an organization to pinpoint problems that affects communication in the company. Although, communication can be difficult management task, but it is effective to make employees be satisfied in their jobs and be innovative. The organization should at all time proactively address employee’s differences and communication breakdowns; these usually increase morale and productivity of employees in the organization. The organizational policies should be well modeled from the top –down, and should be clear. The organization should offer communication courses for it employees; this can be done through seminars and departmental meetings, The organization should find a mentor who exhibits the ability to communicate in the working environment, lastly, the organization should put in place mechanisms that encourages communication and reporting in the organization. Management leadership and commitment: in order for a company to improve management leadership in the organization, the company must do the following. First, employees in the organization should deeply understand the reasons for or consequences of change in the organization, second, the organization should organize disciplined rollout but they should anticipate obstacles on the way, but they should be willing to share control with other employees in the organization. Third, the organization should focus on meaningful gains in efficiency in the workplace; but they should make sure they increase input levels in the organization. By an organization focus on this they will improve leadership and commitment in the organization. Organizational culture: this refers to the norms and values that are available in an organization; both the norms and values will make the personality of an organization, and both of this are shared by employees working in an organization. Hence, the company should improve organizational culture in the organization; because most employees want to work for an organization that will enable them maintain a balance between their private life and working life. It has been shown that an organization which improves organizational culture will increase productivity of its employees. So a healthy organizational culture is a win- win situation for the people working for the organization. There are many ways in which organization can improve organization culture, such as: first, the organization should train its employees in the right way; it will improve the organization culture. When an employee knows how to do right things in the right way in the organization; conflicts and errors will be minimized in the organization. Second, the organization should analyze the existing culture in the organization and compare them to expectations and perceptions of the employees working in the company. Third, discussions should be organized for employees; they should be allowed to talk about matters pertaining to current culture that are found in the organization; the organization should try and bring the changes that are found to be justifiable. Fourthly, the organization should at all the time maintain health communication; tell them the strategies of the organization that is expected of them. Fifth, conflicts in an organization cannot be avoided and this usually has a direct bearing on the health of its culture, how an organization handles these conflicts is an indicator of the prevalent organizational culture; it should be encouraged. Lastly, the organization should create unbiased, transparent and impartial conflict resolution mechanism in the organization; this is because if employees in the organization feel they are all being treated equally, they will be in a position to accept mistakes and the judgment of the management of the organization. Reference Lists Brown, A. (1998) Organizational culture. London: Financial Times. Daft, L. (1997). Management, 4th ed. New York: Dryden Press, Harcourt Brace College Publishers. Day, D. (1998). Personality as predictor of work-related outcomes: Test of a mediated latent Structural model. Journal of Applied Social Psychology, 28, 2068-2088. DeNeve, K, (1998). The happy personality: A meta-analysis of 137 personality traits and subjective well-being. Psychological Bulletin, 124, 197-229. Elsmore, P. (2001). Organisational culture: organizational change?. London: Gower Publisher. Kaplan, R.S. and Norton, D.P. (2001), “Transforming the Balanced Scorecard From Performance Measurement to Strategic Management: Part II”, Accounting Horizons, Vol. 15, No. 2, pp. 147-160. Nelson, B (1994). 1001 ways to reward employees. London: Workman Publisher. Read More