Managing People and the Impact on Organizational Performance - Literature review Example

 Managing People and the Impact on Organizational Performance Introduction While every organization comes after obtaining profitability, people are the driving force in that process. However, it is impossible to reach a success without proper contribution of each organizational member. With the poor performance of their employees, businesses face a serious obstacle for further achievements and success, while well thought, planned and managed work ensure the companies establishment of their activities at best level. For this purpose, managing of the workforce is performed by the human resources, whose duties are aimed to assist companies’ activities by hiring appropriate people, developing their skills and abilities and promoting them in order to retain as much talents as needed. Further accomplishment of employees is executed by the performance management, which involve employees in contributing the organizations’ goals, improving their effectiveness and helping the employees themselves to realize their importance. The following paper will examine certain mechanisms, through which organizations manage to improve their performance; it will show the relation of performance management to HRM and its role in the contemporary context; will identify the component parts of performance management systems; will represent critique to the rationale for culture management. Mechanisms for managing and improving organizational performance In order to measure and improve the organization productivity, businesses define and develop different programs that monitor the outcomes of each member of the organization to be aligned with the overall strategy goals. The results of such programs will ensure the companies levels set for finance, for example, the level of consumers’ satisfaction or the products quality levels. There are also different techniques that enable businesses to manage and improve the organizational performance. Thus, the effective time management will improve productivity of workers and help the organization to reach its goals. Numerous training and development sessions are able to improve individual productivity and thus make a positive impact on organizational performance. To improve employees’ engagement and performance, companies can use such mechanisms as effective communication that enables to see clear goals and expectation of employees. Sharing information increases employees’ sense of ownership. Besides, active promotion of organizational values, ethical considerations and reputation make employees care for their organization, enhancing their effective contributions. Constant feedback about the employees’ performance will also promote the more effective presentation of their activities that bring benefit to the entire organization. Another technique that may drive employees’ motivation is the compensation for the successful accomplishment of tasks and additional benefits. In the recent years the compensation management has become the important way to encourage staff and manage their processes more effectively. The management of each organization, however, should examine the benefits of investment in the compensation management, and its departments should agree on a single direction (Risher, 2011). Thus, the organization may decide to provide financial compensation in form of wages, bonuses and commissions, certain indirect financial compensation such as retirement plans, education or other employees’ services. Besides, career development and opportunities for recognition also play the important role for employees’ good contribution. That in turn bring a considerable advantage for the firms to retain qualify specialists within the companies. Performance management and its relation to HRM areas Over the last years, the general image of the performance management has greatly changed. There appeared the need to revise the old visions of the workforce and create a positive work environment investing in human capital. It gave many organizations opportunity to create long-term success for their businesses and retain employees for a longer period. However, there is no generally accepted framework for analyzing and understanding the HR function, as there are only competing models. There are only different practices, such as training and development, rewards schemes and performance management that help the organizations to reflect the main objectives of HRM strategic programs. These programs help to identify and recruit good performers and give abilities and confidence to perform their activities effectively (Beardwell, & Claydon, 2010). The HRM pays no good attention to the differentiation of employees and the intensity of HRM regarding its daily or yearly intervention. However, there are many researches on HRM and performances that focus on the HR intended practices that are designed at the strategic level of the business. While performance management is the result of HRM, it can capture several ways, like profits and sales of the organization, level of productivity and quality of the product or service, behavioral attitudes among employees that influence the level of their satisfaction within the organization (Wilton, 2011). The conceptual models of different researchers link HRM with the performance. Thus, Becker, Huselid, Pickus and Spratts developed model where HRM system is derived from the business strategy. Business and strategic iniviatives Design of HRM system Employee skills, motivation, Job design and structure Productivity, creativity, discretionary effort Improved operating performance Profit and growth Market value An important linkage between the HRM and performance is the attention that each organization pays the environment of the shared perception regarding its practices, policies, different routines and rewards that are essential for the overall contribution to the business activities. The final not about that connection of HRM with performance depends on the developments in business strategy, organizational initiatives with the designed HRM, employees’ abilities that bring productivity and improved operating performance and thus give the organization growth and profit within certain market (Paauwe & Boselie, 2008). The component parts of performance management systems Performance management is aimed to assist employees communicate goals of the organization, share necessary information and identify new career opportunities for the learning and development. Since performance targets the process that contributes the overall organizational success, it should let employees to know what they are expected and also it should provide an effective feedback throughout the period of their doings. That is why establishing of the main components of the performance management process are vital in reaching the organizational goals. The company should first develop a strategic plan, including employees’ goals and objectives with the vision of activities. This is so called the performance planning component. The performance appraisal and reviewing should be normally performed on the half year basis as the measurement of the certain achievement of each employee. The other essential component of the performance management process is the feedback and counseling when the employee acquires awareness from the managerr about the achievements and possible areas for improvement. This is open and transparent process because then it enable staff to realize their strengths and fields for development. feedback and along with this the training and development needs of the employee is also identified. The important component of performance management system is the rewarding of one’s performance. This component determines the motivation of an employee during which one is recognized for good performance and is rewarded accordingly. Performance improvement plan as the other component enables employee to set new goals and new deadline for their accomplishing. Potential appraisal forms give HR managers to understand the further succession planning and job rotation for certain employees. Mechanisms that measure individual performance Developing and implementing of the mechanisms that help to manage people ensure the sustainable competitive advantage for the certain organization. Along with the organization's business strategy and HR practices it is possible to measure the individual performance and how to monitor, evaluate and revise employees’ achievements for the sake of the entire company (Jackson, Schuler, 2002). One of the mechanisms that enable organization to measure one’s performance is the level of productivity, a basic component of performance which refers to the amount of work that certain employee accomplished within the specific time frame, for example for one working day. Productivity stands close to the efficiency and it relates to cutting costs for example or reducing production time in operations. After conducting training and development sessions it is possible to observe the progress of performance os individuals. Quantifiable metrics help to measure employees' success and thus impact on the individual performance in general. The other technique that helps to see the individual performance is manager’s appraise. 360-degree appraisal enables the organization to obtain the most complete picture of of employee’s performance, because one is appraised by everyone with whom that employee interacts They are managers, clleagues and customers.  Distinguishes between organizational and corporate culture There is certain culture within each organization. It is the complex of organization's vision, values, norms and systems. Employees have certain behaviors, speak certain business language and have numerous assumptions and beliefs. Their behaviors are also taught to new members of the organization all together creating organizational culture or the special way of perceiving and thinking within work environment. Unlike organizational culture, corporate culture determines how employees and management interact with each other and handle outside business transactions. These are the dress code, working hours, office setup, employee benefits, turnover, hiring decisions, the way employees treat their clients (Deal, & Kennedy, 1982). Culture management It is determined that organization’s culture is a complex of its values, beliefs and norms that impact employees’ behavior.  A research showed that culture is one of such factors as organizational foundation, products and services, resources management, operational and management systems. These dimensions of corporate culture are linked to the financial outcome of each business and therefore should be included in formal culture statements. In turn, good financial results are possible only with the presence of well thought strategy that operates within certain markets and provides the preservation of good quality products and services. Operation and management systems enlarge organizational norms and organizational values and belives. The other researchers define three levels of culture management, which are the visual organizational structures and processes; strategies, goals and philosophies; and also perceptions, thoughts and feelings. It is also stated that culture management crosses all aspects of organizational behavior. How HRM can develop and reinforce corporate culture Notwithstanding the fact that each big or small business has certain strategy that does not mean that such great planning guarantees long term business success. Due to the different external factors that may influence the organization, there are also the internal such as the corporate culture, which helps the company to create a high performance environment and which will help the organization to support its business strategy. Because culture is so vital to the organizational success, the HR specialists should increase their proficiency in the attempt to influence the culture (Marchington, & Wilkinson, 2012). Since HRM is one of the most significant areas of organizational science and practice, it also influences the corporate culture greatly. Its practices refer to planning, recruitment, selection of the right people, their further training and development and performance evaluation and career growth. That is why it influences the corporate culture at every level of employees’ relation with the organization. It sets directives to office setup, employees’ benefits and their turnover and hiring decisions. HRM practices strengthens the way organization deals with its main players. References Beardwell, J. & Claydon, T. 2010, Human Resource Management: a contemporary approach, 6th ed., Harlow: FT Prentice Hall Deal, T. & Kennedy, A. 1982, Corporate cultures: The rites and rituals of corporate life, Reading, MA: Addison-Wesley Jackson, S. & Schuler, R. 2002, Managing individual performance: a strategic perspective, Psychological Management of Individual Performance, John Wiley & Sons. Ltd Marchington, M. & Wilkinson, A. 2012,Human Resource Management at Work, 5th ed., London: CIPD Paauwe, J. & Boselie, P. 2008, HRM and Performance: What’s Next? Center for Advanced Human Resource Studies, Available from http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1477&context=cahrswp Risher, H. 2011, Getting Performance Management on Track, Compensation and Benefits Review, 43:5 Wilton, N. 2011, An introduction to human resource management, 2nd ed., Los Angeles, SAGE Read More