The Performance Management: Novartis - Essay Example

? A Critical Analysis of the Performance Management case study: Novartis A Critical Analysis of the Performance Management case study: Novartis Introduction Novartis is a healthcare provider that is engaged in the provision of innovative healthcare services that address the ever-changing needs of patients and the community. As part of its corporate social responsibility, Novartis emphasizes on efficiency in performance and utilization of its human resource. In addition, the company is concerned about the role of its employees in the provision of quality services and achieving the company’s performance target. To facilitate the objective, Novartis introduced the annual energy excellence awards to motivate its employees. Although, Novartis has promoted an extensive performance management process, their efforts have not attained the desired levels of expectation. The Performance Management Process Can Be Considered ‘Strategic’ Novartis PM Process is strategic since it links other HR polices such reward, talent development and training with its performance management policies. This is a good strategy since it enables the company to achieve its management objectives through direct approach. The pay for performance system is strategic since it enables the company to motivate its employees by rewarding them for exceptional performance. Moreover, the company can evaluate the value of its employees in terms of the value that they contribute to the company. Rewarding employees for exceptional performance also enables them to benefits from their initiatives and handwork (Randle, 2007). To implement the performance program Novartis has implemented a training program to equip its staff with the required skills. Although the PM process is rewarding in the short term, it cannot be relied upon in the long term. This is because; employee’s performance is limited to several factors including their ability and performance capacity. Moreover, the policy does not promote loyalty and skill development among the company staff. This is because the employees are only concerned with the gains they are making out of their performance rather than the overall performance of the company. The HR policy does not help to sharpen the skills of individual employees since it focuses on the overall performance of the team rather than the performance of individuals. Line managers rather than HR staff drive the process. This is an advantage as well as a disadvantage to the company in terms of skill development and company’s performance. Line managers are more inclined to production and overall company’s’ performance rather than skill development. This makes them less suitable for the job considering that the company needs to establish a long-term relation with its customers. Alternatively, being managed by line managers is superior to being managed by HR officers since they focus on the production aspect of an employee. Components & Techniques of the Process PM components and techniques involve employee rating and performance evaluation. The “First Steps 2006/7 was the first Novartis PM process for all V&D staff. The rating process was used to determine and categorize employees according to their performance capacity. Throughout the PM process, measuring or rating employees according to their performance ability is essential. However, the process is not beneficial to members of staff since it only targets employee’s performance rather than the cause of poor or exceptional performance (Marketline, 2012). The process only provides a comparison on employee’s performance rather than the cause of poor performance among employees. Consequently, the pulse check 2008 provides a review of employee’s performance rather than strategies to improve the performance. The survey emphasizes on identifying key improvements that have led to the company’s development. This is not a strategic move since it does not define any specific plan or activity that will lead to the company’s success. The main PM component that has an aspect of strategic management is handling of underperformance. After evaluating employee’s performances, dealing with the outcomes is necessary. More so, when the performance is not satisfactory or it does not meet the requirements of the HR or line managers (Till & Karren, 2011). From the performance rating below 1.3, require regular observation or coaching to establish the causes of their underperformance. Although the PM process identifies criteria for identifying under performance, it does not explicitly define under performance. Moreover, the component does not define the appropriate cause of action in the situation that an underperforming employee is identified. Evaluation of Performance Management Process The company evaluates its approach by establishing the level at which the PMP are being met. Performance management objectives are timed to coincide with appraisals once Novartis has set its corporate objectives. The evaluation process does not capture all the factors of human resource evaluation. For example, the evaluation process only rates employee’s performance and the level of communication between the company employees (Tahvanainen, 2000). This does not provide an explicit view on the level of the company’s performance. Alternatively, the evaluation process should measure the level of job satisfaction between the company employees. Indeed, the performance of individual employee is dependent on the level of satisfaction among the employees (Wilkinson & Fay, 2011). Thus, measuring or evaluating the level of job satisfaction among individual employee provides a better view of employee’s performance. Novartis PMP also evaluates the additional value resulting from the PMP process. Creation of additional value according PMP process is determined by the financial advancements resulting from the process. This evaluation is not sufficient since it does not measure the performance or the benefits of the PM process. The organization should rather evaluate the additional value or capacity enhancement on employees rather than evaluating economic gains resulting from the process (Farris & Cordero, 2002). There is no evidence that the PM process targeted individual performances during the evaluation process. This is rather unrealistic since overall performance of the company cannot compensate for individual’s performance. Moreover, the PM process is a HR evaluation and therefore its outcomes should be based on individual performances of employees (Locke, & Latham, 2002). Therefore, performances evaluations that do not measure the individual performance of an employee are unnecessary and inconclusive. Such evaluations cannot be used to measure the outcomes of different appraisal schemes as applied by the employees. Lastly, evaluating whether the process has benefited they HR function is important but not necessary. This is because a HR process should benefit both the HR system and the company employees. In the real sense, the process should benefit the company employees more than it benefits the HR processes. References Farris , G.F., & Cordero, R (2002). Leading your scientists and engineers 2002. Research-Technology Management. 45(6) pp.13-25. Locke, E.A. & Latham, G.P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist. 57 (9) 705-717. Marketline, A. (2012). Company Profile: Novartis AG. Marketline Advantage Randle, K. (2007). Rewarding failure: operating a performance-related pay system in pharmaceutical research. Personnel Review. 26(3) pp. 187-200. Tahvanainen, M. (2000). Expatriate Performance Management: The Case of Nokia Telecommunications Human Resource Management. 39(2) pp. 267-275 Till, R.E., & Karren, R. (2011). Organisational justice perceptions and pay level satisfaction. Journal of Management Psychology. 26(1) pp. 42-57 Wilkinson, A. &Fay, C (2011) – Guest editor’s note: new times for employee voice? Human Resource Management. 50(1) - In: CIPD (2013) Social Media and Employee Voice: the current landscape. Research Report Read More