Improving Performance and Organizational Effectiveness - Research Paper Example

? IMPROVING PERFORMANCE AND ORGANIZATIONAL EFFECTIVENESS by goes here] Presented to [your goes here] [your goes here] [your university’s name] [due date of the paper] Introduction The Fortune 500 is the list of top 500 companies of the United States. Managers of these companies put great efforts to make their companies reach higher ranks in the Fortune 500 list of the Fortune magazine. Improving employees’ performance and increasing organization effectiveness are two of the major aims of the Fortune 500 companies. In this paper, we will discuss how Fortune 500 companies can achieve their goals of improving employees’ performance and organizational effectiveness. Ways to Improve Organizational Effectiveness Most of the managers of Fortune 500 companies aim at improving the elements of management, quality, and employee involvement in order to improve organizational effectives. Implementing a suitable customer relationship strategy also plays a key role in improving organizational performance (Elmuti, Jia, & Gray, 2009). Proper Management The role of managers is critical for the success of any organization. Top level and middle level management perform the role of brain for an organization that directs all departments of the organization. For example, in a healthcare organization, management assigns tasks to different departments based on the nature of tasks and the departments put their efforts to complete those tasks. Top management provides regular training to the employees not only to improve their performance but also to make them improve the quality of products. If we talk about traditional management practices, we can say that in traditional management, all business processes and decisions revolve around the top management of the organization that prevents employees from being creative and innovative. The role of managers in improving organization performance and effectiveness is also important because they lead, shape, and guide all employees to work properly to achieve the organizational goals and objectives. Without proper management of employee behaviors and other issues, a company can never show good performance. Integration of Quality Quality means to provide product satisfaction to the customers. Any organization or a company can satisfy the stakeholders and the customers only if it provides them with quality in the products that they use. According to Brown (2011), quality is the key to organizational success because it leads an organization to sustainable growth and competitive advantage (p. 93). Pearce (2007) states that for a business to be effective a quality approach must cover all people and all activities at every interface within the business. Quality also means to seek continuous improvement in the products and services provided by any organization. One cannot deny the importance of quality management in an organization. Many companies and organizations firmly believe in the benefits and importance of adopting the ISO 9000:2000 standards (Al-Khalifa, Al-Salem, & Mohamed, 2008). Improving and maintaining quality of products and services is a very important point of consideration for any organization to get success in a competitive market. Quality management is an ongoing process of building and sustaining healthy working relationships between the company and its customers by providing the customers with quality products. The target of growth of business and gaining trust of customers in the competitive market can be achieved if a company implements a proper quality management system in a company. Quality management system of any organization should base on ISO 9000 series, which represents an international agreement on the quality management practices within an organization (Uzumeri, 1997). If a company wants to attain market domination, the management of that company needs to provide its customers with the highest quality products and service. It is necessary for any organization to implement a well-developed quality management system because it not only helps an organization attracting and retaining customers but also helps gain competitive advantage in the market. Employee Involvement Top management needs to motivate the employees towards ensuring quality in all aspects of their job responsibilities. The involvement of employees is also of integral importance in ensuring the implementation of total quality management system in a company. Therefore, managers need to encourage their employees to bring improvement in their job related activities in order to ensure improvement in the organizational effectiveness and performance. Improving Employee Performance To bring improvement in the performance of employees, managers of Fortune 500 companies follow a two-step process. Those two steps include evaluating the performance of employees and implementing a proper incentive system. Performance Appraisal Performance appraisal system is a process of identifying, measuring, and improving the performance of employees and aligning their performance with the strategic goals of the company. Without an effective appraisal system in implementation, it becomes very difficult for the organizations to achieve the desired goals and objectives. Mehmood (2009) asserts, “Performance appraisal is the step where the management finds out how effective it has been in hiring and placing employees”. Managers need to apply the most suitable appraisal methods in order to assess and evaluate the performance of employees (Grint, 1993). Appraisal systems not only monitor the performance of employees but also play a crucial role in selection of suitable employees for any specific task. There exist many performance appraisal methods, which prove to be very helpful not only for the employees but also for the organizations. Let us discuss some of the widely used appraisal methods in some detail. Critical Incident Method In the critical incident method, managers of the organizations analyze the behavior of the employees and record all negative and positive aspects of their behaviors. Then based on the analysis of their behaviors, the managers and the supervisors identify the strong and weak points of the employees. Ngo (2010) asserts, “The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior”. Behaviorally Anchored Rating Scale This method also includes some techniques of rating system and critical incident method. Critical incidents define the anchor statements whereas ratings show some specific performance dimensions. The steps involved in this method include collection of critical incidents, identification of performance dimensions, incidents’ reclassification, assigning values to the critical incidents, and production of result. Managers can improve employee performance by assessing their on the job behaviors using behavioral assessment tool (Crowell, Hantula, & McArthur, 2011). Weighted Checklist Method In this performance appraisal method, manager makes a checklist that includes the descriptive statements regarding the positive and negative behaviors of employees. The checklist is created for every job title. The manager marks those statements, which he believes to be present in any specific employee. 360-Degree Performance Appraisal 360-degree performance appraisal is one of the widely used appraisal methods in which there are many sources of feedback. These sources include all those persons who have some form of contact with the employee on job. Other sources of feedback include managers, colleagues, and subordinates of the employee. Burlacu (2010) asserts, “This method is considered a human resources device to analyze a company's human potential”. Implementation of an Incentive Plan One of the methods that the Fortune 500 companies use to improve individual and/or group performance includes implementation of an appropriate incentive plan for the employees of the company. Incentives are those benefits or remuneration, which a company offers to its employees as a reward for achieving some desired goals and objectives for the company. Brown (1990) found that compensation is very motivational for the employees and it includes incentives for above-average performance of an employee’s entire job (p. 121). The factors that managers consider while developing a suitable incentive compensation plan include understanding the type of compensation plan, discretion to award, conditions for implementation of the plan, practicalities of the plan, method of payment calculation, and understanding the culture of the company. There are different types of incentive plans, which ensure performance maximization of employees. These types include individual-based, team-based, and organization-based pay incentives. A company should design an incentive plan by incorporating the basic needs and demands of the employees. When the employees of a company know that their company has implemented an incentive plan through which their efficiency and productivity are rewarded in terms of cash and non-cash rewards, they show more concentration towards their work, which not only increases the individual productivity but also increases the overall productivity of the company. The use of incentive plans is related positively to all dimensions of organizational performance (Menguc & Barker, 2003). It not only motivates employees to show more determination towards their jobs but also improves overall organizational performance. Managers of two of the high ranked Fortune 500 companies, Apple and Ford, use Locke’s goal setting theory to motivate the employees towards achievement of desired set of goals. They link Locke’s goal setting theory with the development of team-based, individual-based, or corporation-based pay incentive plans. Whatever the type of plan may be, the goal is to improve organizational performance and incentive plans serve this purpose of the Fortune 500 companies very well. Conclusion Summing it up, increasing organizational effectiveness and improving employee performance are two of the major aims of the manager of the Fortune 500 companies. These aims or goals play an important role in determining long-term success of the companies. Managers mainly focus the role of management, integration of quality, and employee involvement along with the implementation of a proper incentive plan to achieve the goals of increased organizational effectiveness and improved employee performance. References Al-Khalifa, K., Al-Salem, A., & Mohamed, T. (2008). ISO 9000:2000 quality management standard: experience in the state of Qatar. International Journal of Productivity and Quality Management, 3(4), 457-471. Brown, D. (2011). An Experimental Approach to Organization Development (8th ed.). Upper Saddle River, NJ: Prentice Hall. Brown, R. (1990). From Selling to Managing: Guidelines for the First-Time Sales Manager. New York, NY: AMACOM. Burlacu, A. (2010). 360 Degree Performance Appraisal - Major Controversies. Retrieved from http://ezinearticles.com/?360-Degree-Performance-Appraisal---Major-Controversies&id=4491231 Crowell, C., Hantula, D., & McArthur, K. (2011). From Job Analysis to Performance Management: A Synergistic Rapprochement to Organizational Effectiveness. Journal of Organizational Behavior Management, 31(4), 316-332. Elmuti, D., Jia, H., & Gray, D. (2009). Customer relationship management strategic application and organizational effectiveness: an empirical investigation. Journal of Strategic Marketing, 17(1), 75-96. Grint, K. (1993). What’s wrong with performance appraisals? A critique and a suggestion. Human Resource Management Journal, 3(3), 61-77. Mehmood, M. (2009). Employee’s Performance Appraisal. Retrieved from http://www.articlesbase.com/college-and-university-articles/employees-performance-appraisal-786565.html Menguc, B., & Barker, A. (2003). The Performance Effects of Outcome-Based Incentive Pay Plans on Sales Organizations: A Contextual Analysis. Journal of Personal Selling and Sales Management, 23(4), 341-358. Ngo, D. (2010). Critical Incident Method of Performance Appraisal. Retrieved from http://www.humanresources.hrvinet.com/critical-incident-method-of-performance-appraisal Pearce, B. (2007). Total Quality Management (tqm). Retrieved from http://www.articlesbase.com/small-business-articles/total-quality-management-tqm-175038.html Uzumeri, M. (1997). ISO 9000 and other meta standards: Principles for Management Practice?. The Academy of Management Executive, 11(1), 21-36. Read More