Contemporary HRM: Improving Organisational and Employee Performance - Example

Contemporary Human Resource Management: Improving organisational and employee performance Introduction Organizational and employee performance is a critical factor to the success of the overall business practically in any commercial organization. The importance of firms’ productivity and efficiency becomes even greater in the period of today’s era of globalization and fierce competition. As an HR Director of the company I have found that the company is experiencing some problems with organizational and employees performance. While in some parts of the company performance and employee engagement levels are high, there are other parts of the company which are significantly underperforming and employee engagement levels are low. The aim of this report is to explore and to evaluate what models, strategies and practices HR Director of the company could implement in order to effectively manage organizational and employee performance. Organizational Performance and its measurement Practically all organizations experience cyclical declines of organizational performance level over the duration of its existence. There are recognized some common reasons of declines in organizational performance, namely: poor quality, poor decision making, no sales, inefficiencies, cost management/cost overruns, trust problems, ineffective target setting, or/and mix of these factors (Ranalletta, 2013; Cannon et al., 2009). However, the root cause of various problems is people, as organizations are usually very dependent on human factor (Ranalletta, 2013). As it has been identified, there are some obvious problems within the organization. According to the information given in the case study, there are parts of the company where performance and employee engagement levels are high, and those parts which are significantly underperforming and where employee engagement levels are low. Performance in this specific case can be defined as “the degree of an achievement to which an employee’s fulfill the organizational mission at workplace” (Awadh & Saad, 2013:170). Thus, it relates to the efficiency and effectiveness of achieving organizational/corporate goals by employees (Awadh & Saad, 2013). From this definition it is possible to derive the first recommendation, which is – to define and state clearly organizational, corporate, team, and individual goals and objectives. It is important to differentiate between the three areas of company goals that may relate to the following categories: financial performance (return on investment, profitability, return on assets, etc); shareholder return; and product market performance (market share, sales, etc.) (Richard et al., 2009). Before developing any strategies and measures to solve the problems, it is necessary to identify against what indicators/criteria performance is measured and what are the methods/tools used for its measurement (Bourne et al., 2013). These measures can be: accounting measures (cash flow from operations; earnings before interest, taxes, depreciation, and amortization, net operating profits, profit margin, sales, sales growth, etc); financial market measures (shareholder’s value, stock prices, etc); and mixed accounting/financial market measures (balanced scorecard, cash flow return on investment, net present value, etc.) (Richardson et al., 2003). Employee performance evaluation Evaluation of employee performance will help to gain a deeper understanding of the causes of partial decline of employees’ underperformance. Also, it will help to estimate employee potential and, thus, to prepare more effective career promotion strategies. Also, the employees will have information on their performance levels and will be encouraged to improve their own on-the-job performance (Ekici, 2008). For this purpose, there can be used several methods, such as: graphic rating scale; behaviorally anchored rating scales; open-ended, unstructured essay appraisals, etc. (Ekici, 2008). Also, there can be used electronic technologies for observing, recording, and analyzing information on employee performance. One of such technologies is Electronic performance monitoring (Bhave, 2014). As there is not much details on the firm’s financial capabilities and sizes (headcount) no specific recommendations of which method should be used are given. Importance of employee engagement There are three HRM practices that are critical for creating a commitment-based setting within the organization. These practices include the following: recruitment and selection practices; training and appraisals; reward and motivation (Bourne et al., 2013). For recruitment and selection practices the HR manager can use the Performance Requirements Options form in order to define scientifically job requirements and behavior required before the actual search of the candidate (Ranalletta, 2013). Scholars, consultants, researchers and other experts have developed many different techniques and concepts in order to help organizations to become ahead of their competitors through effective HR strategy. Such concepts as employee commitment and organizational citizenship behavior become especially popular. Thus, employees are viewed as an important or even strategic asset of modern organization, where the employee’s commitment and ability is associated with productivity and efficiency (Markos & Sridevi, 2010). Therefore, many efforts of the HR department are normally concentrated on employee’s engagement in their jobs (Markos & Sridevi, 2010). Employees’ engagement can be defined as the “employees’ willingness and ability to help their company succeed, largely by providing discretionary effort on a sustainable basis” (Perrin’s Global Workforce Study, 2003 cited in Markos & Sridevi, 2010: 90). HR strategy based on the employee’s engagement is quite popular in many organizations as these initiatives are recognized to serve a solid background for any improvement within the organization. Employee engagement contributes to the following organizational performance outcomes and benefits: employee retention; profitability; productivity; customer safety, satisfaction and loyalty (Markos & Sridevi, 2010). The scholars stress the importance of strong manager-employee relationship in the employee engagement and retention efforts. Therefore, it is important for a manager: to align efforts with strategy; to promote and encourage collaboration and teamwork; to empower; to support and provide recognition when appropriate; and to help people develop and grow professionally (Markos & Sridevi, 2010). The following 10 factors facilitating employee engagement should be taken into consideration while developing any HR strategy: work environment, leadership, workplace well-being; compensation; training and career development; and organizational policies (Anitha, 2014). There are several employee engagement strategies, which should be adopted in the company, namely: (1) To develop effective recruitment and orientation programs on the first day of the new employee (Markos & Sridevi, 2010). (2) Establishing clear mission, vision, and values and demonstrating leadership commitment at the top level (Markos & Sridevi, 2010). By defining company’s strategy and corporate values and communicating to staff, management will empower its workforce to define what they stand for (McKanic, 2005). (3) Promotion of two-way communication. Workforce should feel engaged in the process and need to have an opportunity to share their ideas, concerns, etc. (Markos & Sridevi, 2010). (4) Providing satisfactory opportunities for employee’s development and advancement. People should be given more space for independent thinking and job autonomy so that they could be able to find the best ways for doing their jobs/tasks (Markos & Sridevi, 2010). (5) Ensuring that everything what the employees need to do their job is in place. This relates not only to material or physical resources, but also to information and finances (Markos & Sridevi, 2010). (6) Providing appropriate training to employees, so that employees could continuously increase their knowledge and improve their skills (Markos & Sridevi, 2010). (7) Introduction of a strong feedback system, which will help to define the factors that make employees engaged. For this purpose, the company is recommended to design a survey, regularly give it to the employees, and based on the survey results to develop specific, time-bound, measurable and accountable action-oriented plans (Markos & Sridevi, 2010; Powis, 2012). (8) Introduction of proper financial (for example, pay and rewards) and non-financial benefits (for example, recognition and praise) to employees who succeed in engagement practices (Markos & Sridevi, 2010). It is important to develop a suitable rewarding system as rewarding is recognized to be one of the main company’s policies which can increase the organization’s outputs and employees’ performance (Gohari et al., 2013). However, it is necessary to identify what intrinsic and extrinsic rewards are more important for employees based on various characteristics, as some employees get more satisfied from extrinsic motivation (material properties, payment, bonuses, positive evaluations, esteem, etc.), while other get more satisfied from intrinsic motivation (for instance, feeling of autonomy) (Gohari et al., 2013). Therefore, it is important to define which rewarding strategies lead to higher performance and productivity of staff (Gohari et al., 2013). (9) Building up of a distinctive corporate culture that promotes mutual respect and keeps retelling success stories of existing employees (Markos & Sridevi, 2010). Also, the culture should support entrepreneurial thinking from top to down (McKanic, 2005). (10) Focusing on top-performing employees where the company does what top-performing employees ask for. Thus, the company will reduce the turnover of its high-performing employees, and show recognition and appraisal to other employees (Markos & Sridevi, 2010). Performance improvement plan In order to improve employee’s performance it is important to develop a performance improvement plan. Kirkpatrick (2005) proposed a plan, which is comprised of several stages. The first stage is preparation of the basis for approval (identification of job segments for improvement and setting up standards of performance). It is critical to understand the segments of performance that need to be improved and then to prioritize them. Kirkpatrick (2005) recommends focus only on one job performance segment in order to avoid the risk of overwhelming task. Identification of this segment should involve both a manager and an employee(s). The second stage is appraisal process, which includes the process of preparing for the appraisal interview and conducting this interview. The third stage is actual preparation of an effective plan. It is a specific course of action which defines what actions needs to be undertaken, who will be responsible for its implementation, and when (Kirkpatrick, 2005). Also, there are some general guidelines in terms of designing the performance improvement plan, namely, it should: (1) be practical; (2) be time oriented; (3) and be specific (Kirkpatrick, 2005). And the fourth stage is called “on-the-job coaching”, which implies the availability of effective coach and efficient coaching practices (Kirkpatrick, 2005). Coaching is recognized to be a critical element in improvement employee’s performance. Definitely, coaching as a strategic practice should be implemented within an organization (Stone, 2007). However, no details on coaching specification can be given at the current stage as not much information has been provided at the beginning. Moreover, employee performance evaluations and surveys will help to identify more specifically what employees need coaching and in what specific areas. Conclusion This report provides a brief overview of the key theory related to organizational and employee’s performance. The report explore and evaluates what models, strategies and practices HR Director of the company could implement in order to effectively manage organizational and employee performance. First of all it is necessary to define and state clearly organizational, corporate, team, and individual goals and objectives. Also, it is important to evaluate employee’s performance by using some of the methods proposed. As it has been defined one of the most important strategies for improving organizational and employee performance is to increase employee’s engagement. HR strategy based on the employee’s engagement will help to achieve a set of organizational performance outcomes and benefits. While developing employee engagement strategy it is highly recommended to focus on the 10 factors facilitating employee engagement. The strategy that should be implemented within a company is comprised of 10 key steps, including the following: introduction of effective recruitment and orientation programs; development and communication of a clear mission, vision, and values and demonstrating leadership commitment at the top level; promotion of two-way communication; providing satisfactory opportunities for employee’s development and advancement; ensuring that everything what the employees need to do their job is in place; providing appropriate training and coaching to employees; introduction of a strong feedback system; and introduction of proper financial benefits and rewards. Finally, there is provided the general guideline to the development of performance improvement plan. The research is limited because of lack of details of the company’s concerns, problems and challenges. 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