Overview of Organizational Performance Management - Term Paper Example

?Performance management Performance management is an important concept which is present in most of the business organizations who aims to perform in the competitive environment for a long period of time. Performance management includes a set of activities which ensures that the performance of the organization is up to the desired level and also takes care of the individual performance of the employees and various departments working in the organization. The paper analyzes the use of the performance management in the organization and also critically studies the appraisal system from the point of view of best practice. A research has been also conducted to study the performance management system and the appraisal system in HSBC. Task 1 Performance management: The business organizations thrive on the operational performance of the organization along with the profitability it aims in achieving. In the aspect of organizational development, the overall difference between the result achieved and the expected result is termed as the performance of the organization. In order to achieve optimum performance various measures are incorporated by the organization and the concept of performance management is of high importance. The performance management enables employee of the organization to work towards a common goal. Various tools in the performance management system help the employees of the organization to understand the overall aims and objectives of the business. As the overall success of any organization depends a lot on the individual performance of the employees, it is important for them to have a transparent idea regarding the goals and the vision of the organization. The employees of the organization are made aware of the roles and responsibility which they need to carry on in the organization. Performance management enables the employees in the organization to have a clear understanding of their contribution and the level of expectation the management of the organization have towards them in meeting the goals of the organization. Presence of an efficient performance management system empowers the individuals to clarify their roles in the organization. Thus the primary objectives of any organization are achieved by the maintenance of a proper performance management system in the organization. The performance management of any organization contributes to the best practices of Human resource maintained in an organization. Few of the best practices followed in the organization are, providing bonus to the employees based on the overall performance, collecting feedback from the employees, identifying the contribution of the employees and providing them with rewards for the achievements gained. All this best practices maintained by the organization are generated from the concept of the performance management, as these are the various units of the systems (Rao & Rao, 18). The awareness regarding the performance is also provided to the employees and it helps them to analyze their strength and weakness and provides the employees with suggestion regarding improving the level of the performance. Such feedback mechanism helps the employees to gain confidence and it as a motivational tool for the employees to deliver their best for the organization. Performance management of the organizations is carried out in a regular basis and the changes in the parameter happen on a regular basis depending on the attributes of measuring the workers performance. (The importance of Performance Management) Task 2 Performance appraisal: The process of performance appraisal is one of the key tools which are used by the organization in measuring the performance of the employees in the workplace. The performance appraisal system evaluates the performance of the employees as the performance is one of the critical factors for the organizations success. According to the high commitment HRM system, the performance appraisal is one of the basic requirements so that the employees can understand the level of the performance and identify the areas which need further improvement. The best practices in human resource management also signify the need for rewarding the employees so that the employees are attracted to perform better. The rewards and recognition of the employees will also help the high quality employees, to retain in the organization. However in order to provide the employee with performance incentives and rewards the foremost thing is the evaluation process, and the employee appraisal caters to this need. The performance appraisal system is initiated by identifying the objectives of the appraisal process, once the objective of the process is identified the standards of the performance is set which is used as a benchmark. The actual performances of the employees are identified and the comparison of the actual performance and the standard is done. Based on the result of the comparison, the employees are rewarded and the corrective actions are taken by the management with those employees who fails to achieve the minimum level of standards (Verma, et al. 82). The organizations deploy various methods of performance evaluation techniques some of which are mentioned below 1. Management by objectives 2. 360 degree feedback 3. Grading 4. Ranking 5. Checklist 6. Review. (Randhawa, 135) Comparison of Performance appraisal and best practice: The overall objective of the performance appraisal and the best human resource practice are similar in nature. The ultimate aim of both the process is to improve the efficiency of the employees so that the organizational goals are received. The best practice in HR focuses on the selection of the right people for the right job so that the employees feel at ease in delivering their best whereas performance appraisal involves the evaluation of the recruited workforce and measures their level of output against the expectation which the employers had during the selection process. The best HR practice also focuses on the reduction of status difference but there is a contradiction with the performance appraisal system in this respect. The performance appraisal aims at rewarding the employees with better performance, however this may have a psychological impact on the other nonperformers in the organization. The reaction of the employees who have been awarded also is detrimental towards maintaining a harmony in the organization (Marchington, et al, 187). Task 3 Performance management in HSBC: Research methodology: The research methodology incorporated to conduct a study on the performance management in HSBC is based on the secondary methods. The secondary methods include the books and websites which have provided information about the process maintained by HSBC. However in order to maintain the credibility of the research, only authentic websites have been included in the research (Malhotra, 106-107). The secondary method helped to explore a variety of information regarding the performance management in HSBC. The research method incorporated in the process is qualitative in nature as the implementation of the performance management system is based on the study of the facts (Thomas, 1-2). Findings: HSBC is one of the world’s leading banks and it has its presence in various countries across the globe. The success of the organization is attributed to the performance management of the organization and the flexible human resource policies which the organization maintains. The HR teams of HSBC constantly address the needs of the employees and the employees are evaluated on a regular basis throughout the year. HSBC maintains a proper timeline for documenting the performance of its employees. During the beginning of the year, the respective line mangers of various departments set the objectives to be delivered by the employees. The job description of the employee is made transparent and the business goals are also made clear to the employees. During the period of May and June, the employees carry on their self assessment. The employees try to evaluate their own performance and try to analyze their strengths and weakness in their job assigned. The self assessments made by the employees are also reviewed by the line mangers. During the month of July, the heads of various departments standardize the ratings of the final evaluation to be made during the end of the year. The employees are also informed about the ratings which they achieve during the first half of the year. Based on the evaluation of the employees, they are advised to improve in certain areas in which they lack efficiency. The period from the month of August to November involves no assessment and the employees continue to perform based on the advice they had received. The final assessment of the performance of the employee is done in the month of December, where the outstanding employees of the organization are provided with rewards and recognition (HSBC Performance Appraisal Timeline). An important mechanism for rewarding the employees is present in HSBC where the purchase of stock options of the organizations are provided to the employees at subsidized rate depending on the overall performance of the employees and their tenure of service (Ashton & Sung, 37-38). This facility provides the employees to become the stakeholders of the organization which acts as a huge boost for them in the long run and increases the productivity of the organization. HSBC uses a variety of method to determine the performance of the employees. Two such methods which are widely used are forced distribution method and 360 degree performance appraisal. HSBC uses a forced distribution method so that the mangers are prevented from awarding a high rating to the employees who have not performed exceptionally well over the year. Often the managers become reluctant to award the employees with low grades which also talks about their inefficiencies in handling them. As result HSBC rated those employees as performing, who have been successful in attaining their objectives over the year. The performing employees are provided with 5 bands (Rude, Arrogant and powerful). In order to evaluate the employees from all aspects and to have a feedback from various level of organization, HSBC also uses the 360 degree feedback procedure where the employees are reviewed by tits subordinates, its managers and the other level of management with which he is associated directly or indirectly. The data are collected electronically and processed with the help of software which reflect the final results of the employee evaluation. HSBC believes that the organization will be able to meet its overall objective by an increased amount of the employee participation and tries it s best to involve al its employee to provide their views and suggestion. In the year 2009, the overall employee engagement of the organization was 71 percent, which reflects the amount of encouragement the employees are provided to participate in the organization (Monitoring our performance). The presence of a good employee and an employer relation can also be apprehended from such instances. Recommendation: The study of the performance management and the performance appraisal system of HSBC reveals the fact that the organizations policies regarding both the aspects are well balanced. The models adopted by HSBC in the performance evaluation are also followed by various other organizations. However HSBC could look to further improve the efficiency of the process by implementing a single technique of performance appraisal in all of its branches. 360 degree process evaluation diminishes the occurrence of discrepancy in the process of evaluation and should be the primary technique of evaluation of the employees. The evaluation timeline should also include the training period of employees where they get a scope to inculcate the necessary training which they require for improving their efficiency. Conclusion: The importance of the performance management and proper employee appraisal cannot be ignored towards maintaining the overall objective of the organization. As employees are the key factors which drives the organization towards its success, so proper measures needs to be implemented to measure their overall performance and also provide necessary suggestions to increase their efficiency. Unless the proper evaluation is conducted the employees will also be unable to understand their deficiencies. As observed in the case of HSBC, the employee’s evaluation system occurs throughout the year which enables the employees to spot their weakness and the subsequent progress. This method also in turn benefits the organization hugely as the constant improvement in the functioning of the employee; increase the productivity of the organization. However the organization needs to be careful so that any biasness or discrepancy does not arise in the organization regarding the employee evaluation which would degrade the performance of the organization. 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