Organisational Behaviour: Role of Performance Measure and Its Pros - Coursework Example

Introduction Organizational behaviour is defined as the study of human behaviour in an organizational setting; it isthe interface human behaviour in an organization and the organization itself. The teachings and study on organizational behaviour are found in organizational behaviour departments and the management department that form part of business schools. However, the central idea of the study of organizational behaviour is that a scientific approach can be employed in the management of works. Among those management skills that are used is the performance measurement Role of performance measure and its pros According to Neely, performance measurement is defined as the process where managers quantify the efficiency and effectiveness of workers and organizational past actions. The process is composed of different processes and a number of units of measurement that are aimed in giving magnitude of performance. Connectively, performance measurement can be represented by a single dimensional unit as hours, meters, number of reports, dollars; number of CPR certified employees and the length of time to design the hardware. They show the variations in process or the deviation from design specification. Additionally this can be said to be the tools that aid the management to understand and also carry out effective management that will improve the organization. Some of the question that the management should ask itself are; how well are we doing? Are we meeting our goals? Are the customers satisfied? Where are we supposed to make improvements? (Richmond, 2000 pp 64-97). The act of reviewing the performance of an organisation is an important step since it helps formulate the direction of the strategic activities this also helps the organization to identify its strengths and weaknesses of the organization. This is commonly referred to as the plan- do check- act cycle. Connectively measurement plays a big role in quality and productivity improvements process that are aimed at setting standards for establishing comparisons, providing a visibility and also a scoreboard that people will use to monitor their personal performance level. Connectively, it helps an organization to highlight quality problems and also determine the area for priority attention and lastly to provide feedback for driving the improvement effort (Hatch, 2006 pp 24-96). There are a lot of advantages that are associated with performance measurement. One of pros is that the management can identify and also track progress against its set goals this helps the management to know whether the organization is either growing or declining. For the management to make effective budget decision, the decision making body should highly be linked with the performance measures this will help the management to carry out analysis and also understand what are the expected results of improvements in the investment of resources. For an organization to achieve better management, performance measures will tell the manager something important about the agency’s product, processes and their services this means that measures are a useful tool in helping the management to manage and also improve effective performance measures (Bourne 2000 PP, 23-46). It has been established that effective performance measures can let the organization monitor performance that it is used to make judgements on how well it is doing, take action to affect performance or either improve efficiency if improvements are necessary and know whether the organization is meeting its set goals and whether its customers are satisfied. Performance measures provide data and useful information necessary to make informed decisions. Performance measures also provide a working snapshot of the current performance abilities in the organization that keeps track whether actual performance is staying the same, getting worse or whether is getting better or over time (Richmond, 2000 pp 64-97). Cons Alternatively there are cons that come with performance measures these shortcomings are mainly found in the financial measures. When these performance measures are done, the managers are unable to assess how well employees perform across the full range strategically in various important areas. Some measures provide limited guidance on future actions this is because they do not tell managers what needs to be fixed. Additionally, having in mind the world of business is highly dynamic some of these measures are so conservative that they do not give a chance to people to move out ad explore other beneficial areas. Managers should highly depend on these measures may become victims of gaming behaviour that only maximizes on short term results while ignoring the long term results that may be adverse as compared to set budget and organizational goals. Alternatively traditionally financial measures can cause a conflict with a strategy if not well focused into hence causing high competitive pressures on the organization (Scott, 2007 pp 52-86). How should performance measures work in an organization? According to researchers, it is evident that every organization requires performance measure this is as per the saying, “if you cannot measure an activity then you cannot control it, and if you cannot control an action then the results are that you cannot manage it." When an organization lacks dependable measurements than intelligent decision cannot be made. However to achieve those set guideline the managers should adhere to the laid down principle that should act as a road map to performance measurement. Some of these principles include; measure only what is important there should be some set limit to avoid measuring of irrelevant information (Hatch, 2006 pp 24-96). The organization should focus on customer needs it is well known that the customer is the king in any business whatever is their needs than the organization should work towards satisfying them also they should be consulted what should be measured. Connectively, employees should be involved in the design and implementation of the measurement system this helps in giving them a sense of ownership that leads to improvements in the quality of measurement system (Schacter, 2002 pp 19-32). After the measurement has been taken, it should be statistically analysed by professional and the results posted for every one to see. This forms the ground where the organization can know the work from, the measurement then can be used in self assessment where managers carry out an assessment on how well the process is doing including major improvements that have been made. Additionally, they may be used in comparisons where the managers apply them to reduce variation. A manager may compare a real condition with the set goals and budget; it also reduces cost and material wastage hence making the organization to stick to the agreed objectives. Measurements also helps in management assessment that gives the managers a certain feeling of how the organization is carrying out its day to day business, this is either whether it is meeting its value –added objectives or whether the processes it use are efficient and effective. Here the basic concept of effective measurement involves; making a strategic plan and meeting the established operating goals and standards, detection of any deviations from planned levels of performance and lastly achieving new levels of performance or restoring performance to the planned levels (Gamble, 2007 pp 73) What are the benefits of performance measures? Performance measurement is a major building block of total quality management (TQM), for an organisation to have quality work then it must be repeatedly be compared and analysed against set qualities so that when the product deviates a little it is dragged back into the collected format. It has been established that substantial benefits are realized by organization that effectively implements measurement programs in their processes. These benefits are realized immediately when employees retrained and educated to understand the laid down processes by employees. Connectively, it is concerned with the process of optimization through increased effectiveness and efficiency of the process of the product, the said actions are responsible for allowing for expansion and improvement of the work process as better techniques are implemented and discovered (Lehtinen, 2010 pp 75-84). The main aim of performance measurement is to reduce or fully eliminate overall variation in the work product or process the goal is meant to achieve effective decisions. The management is also able to establish and show the improvement that actually happen hence have a clear picture of the organization current condition as performance is concerned. In decision making, the managers should use the measure to ensure that decisions are arrived at on the basis of fact not emotions also they should have well documented facts with figures that are supposed to dispel any amount of feelings. Alternatively they show where and how the improvements were made if any, where the company can do better? And what it takes for a company to do better in a given situation. Measure also help organization t dispel the organizational stereotype where managers and employees could think, “I we have been doing well in our respective jobs all this long without measurements then there is no problem." Measures will reveal bias, emotions and others such as the longevity cover up that may be difficult to find out without measurements (Hatch, 2006 pp 24-96). With performance measures, the organization is able to increase its productivity this is measured with the quantity it produces, when the right procedure manpower and machineries are used to their maximum then production is increased hence high profits to the organization. The quality of products and services produced is also high quality, this in turn help in having customer royalty where they shall tend to purchase products from the company and at the long run the market value and percentage are increased. The effectiveness that is said to be a degree of process output and how it conforms to the requirement is easily achievable. Connectively, the efficiency of production of the output required is heightened that leads to production cost reduction since the level of material wastage is minimised. Also on the employees side their safety is increased due to much training and using the recommended procedures in doing their job in the company (Ishmael, 2008 pp 91-124). Negative aspects of performance measures Due to the amount of raw data that is collected from the field during performance measurement, it becomes complicated to analyse and present the results. This necessitates the use of professional analyst hence adding up to the organizations expenses. It also takes time and manpower to have that information collected; this tends to be uneconomical for the organization. Some performance measures may be too complicated for employees to understand and use them; some of them may ignore them or give wrong information due to being uninformed of its importance. Connectively, some of the performance measures may fail to reflect the true picture of the current conditions in the organization this can lead to bad decision making when they are based on the facts from performance measures. Alternatively, the data may be interpreted wrongly hence wrong information to the organization (Neely, 2002 pp 86). Some performance measures may be biased as they expect employees to be uniformly productive where its known people are differently gifted with different skill and abilities this may lead to some people being highly placed while other being neglected by the measures (Braz, 2011 pp 33). Managerial implications of performance measurement Performance measurement is mainly done for managerial use in an organization, this is mainly due to the dynamic nature of work in every work station. The management need to be up to date with the changes, therefore, achieving increased competition and retain their market share. The information collected is used by the management in making strategic plans and budgets that are responsible in shaping the future of the company, this may be a power of information technology the changing organizational roles and external demands that may lead to specific improvement initiatives. Alternatively, it also makes the management eliminate chances of absence of an effective process and lack of the necessary skill both skills or semi skilled since the problem is identified even before it crops out (Neely 1999, pp 86). Additionally they are used as indicators that help the company to identify set and appropriate performance measures that reflect the objectivity to the company. This makes the management better placed with relevant information that they can use to predict the future comfortably. Employees are referred as the main organizational assets that should be always motivated hence achieve high production. The management by use of performance measures will be able to establish the likely person for promotions based on their dedications to work in the organization (Bourne 2000 PP, 23-46). According to Mintzberg, the management requires a lot of information for it to be able to carryout its organizational role of decisional roles, informational and interpersonal. This amount of information can best be retrieved through the use of performance measure programs in an organizational set up. Other scholars in the filed of business such as Frederick W, Taylor who wrote on bureaucracy in organizational structure seemed to favour performance measures who wanted to find one perfect way of doing the job though the improvement of efficiency. He studied motions of workers and then trained them to perform their specialized sequence of motions to have the best way, he becomes much interested in improving worker productivity in their job performance this saw a major improvement in the area where he was able to raise production in Bethlehem steel plant. This method was performance measure since he was studying the works movements using a stop watch and was able to increase their efficacy by raising production from 12.5 tonnes to47.5 ton per day. Performance measurement remains one of the most effective ways of managing and organization. Reference Bourne, M., Mills, J., Wilcox, M., Neely, A., Platts, K. 2000.Designing, implementing and updating performance measurement systems, International Journal of Operations & Production Management, Vol. 20, Iss: 7, Braz, R.G.F., Scavarda, L.F., Martins, R.A. 2011. Reviewing and improving performance measurement systems: An action research, Int. J. Production Economics, 133, Neely,M.K 2002 framework of the factors affecting the evolution of performance measurement systems, International Journal of Operations & Production Management, Vol. 22, Lehtinen, J.A, T.2010 is performance measurement suitable for an extended enterprise? International Journal of Operations & Production Management, Vol. 30, Gamble, J., Strickland, A., Thompson, A. (2007). Crafting & Executing Strategy. (15th Ed.) New York, McGraw-Hill Neely, A. 1999. The performance measurement revolution: why now and what next?, International Journal of Operations & Production Management, Vol. 19, Hatch, M.J. 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