Performance Management and Performance Measure - Case Study Example

Performance Management By Key words: Performance Management Performance Management Introduction Performance management and performance measure involves the regular collection of data on the activities of an organization to assess whether the correct processes are carried out with a focus on the objectives to ensure achievement of desired goals. The primary aim of performance management is quality improvement. (Drucker, 2008) Complexity of performance measurement and performance measure comes when the approach is not carried out continuously throughout the year and is only done once in a year. These makes it a yearly event rather than an ongoing process. The process also has come about with the complexity of advancement without the corresponding change in the reward and recognition system. The objectives of the organization are not aligned with the motivation factors available within the organization. 1. Performance management and performance measurement Performance management and performance measurement are sophisticated, but they are essential for all organizations. The process mainly aims to the strengthening the link between the strategies of business during planning and the day to day activities of the enterprise.(Kerzner, 2001) The process leads to effective setting of business goals with the combination to track the progress and identify the obstacles. During the goal setting job expectations and responsibilities always makes the main guideline.In performance measurement, goals are set to address the expected and achievements in the organization. The tracking involved in the process provides an opportunity to recognize the efforts that enable the rewarding of the employees for their performances contributing to job satisfaction. The performance appraisals are created when there is a track in the ongoing activity. The tracking also provides feedback needed by the organization to make adjustments. Performance management enables technology based solutions that when offered improves the goal visibility in an organization. (Drucker, 2008) The process entails regular individual employer analysis. This leads to the identification of skill gap within the organization resulting in efficient development of plans and identification of training methods. Performance management and performance measurement leads to improved productivity of an organization through better goal management. Performance measurement involves collection of information from a given number of sources. It makes all factors that contribute to the impact on the performance considered. In the management note taking of occurrences, both positive and negative are essential to performance decisions. This makes documentation necessary. Performance management makes adequate preparation and training of managers in an organization relevant. This makes the managers adequately prepare to completion of their tasks. (Kerzner, 2001) The training also helps them to understand persons at different level, their behaviors how to develop them and how to train them.Reviewing in the process is based on job expectations and goals that had previously been discussed and the evaluation methods. The outcomes are stated down for the confirmation of employee discussion. The process of link performance management with rewards and recognitions results from clear documentation that has progress and performance expectations which allows for the identification of jobs that are well done. The link performance leads to compensation according to ones performance. Performance management involves evaluation and encouragement of full participation and success. Relevant feedback delivered enhances learning and provides opportunities to make corrections in order to meet objectives. The attitude towards the outgoing feedback is imperative in an organization. The performance management process adds value to the organization through elimination of problems that are resistant and non-participative. Performance management is done with the sole consideration of getting clear what one needs from the staff. This enables for the follow up of activities on the team. The management need to describe their expectations from these employees in relation to performance objectives. Performance measurement is done with the staff through commitments and agreements to meeting the business goals. Measurement is done through monitoring of staffs performance. Performance management can be done through of motivational performance review meeting and well preparation for review meetings. Right control is also through correctly explaining the performance feedback in clear, objective and non-judgment language. Use of results from activities also enables performance management and measurement, and this also leads to discussions that focusses on the performance of the employees. 2. The transformation of the banking system has developed due to improvement in technology and also the information system. (Drucker, 2008) The competition from banks has come about from the removal of geographical barriers and security of assets and mutual fund which have become more popular. Financial crisis has affected the banks and also financial institutions loses because the impulsive management. Bank stakeholders have created much pressure on the banks to improve performance by practicing the new management practices and also trying the advanced technology. The management practices are adopted to bring down operational cost, improve capital base and also to have influence on the consumers that use the organizations goods. Central banks worldwide have adopted frameworks of supervision. This has developed the strategies, objectives, the system and also the organizational structures. Performance measuring system have been adopted by banks in developed countries to ensure suitability of control system. The system have introduced the desired performance to make them more efficient in a changing business environment. Changes in the banks have been compromised by putting banking regulations to enable their governments in achieving their structural target. This is common in parties that undergo the financial crisis and are more vulnerable to financial constraints. Performance management system change in emerging system has been studied through institutional theory that is based on management system as social institutions in an institutional environment. Bank accounting management systems have viewed the changes to the system as an institutional right. The society has compromised the system by influencing the changes. The study about the banking system of Pakistan had many regulations and institutional changes occurring as a result of international monetary fund that helped in the financing reforms (Kerzner, 2001). State-owned banks had rigid control by the government with continuous interaction between the government in the decisions of the banks. Government interference led to capital impairments and also much loan defaults. This led to uncertainty in the economy of the country and also the banking sector. Reforms of the system through regulations helped the economy and the banking sector. The improvements were made through privatization and restructure of the state-owned banks. Countries remove barriers-to-entry for private banks, and interest rates and credit limit were liberated. The changes led to close supervision of the central bank and also improvement in management capacity and accountability mechanism within the banks. The banks became focused on the economy for critical business operation. Politics, power, and culture have prevented management accounting changes. Frameworks have been used to examine accounting changes, but the frameworks do not help to change the complexities involved in the change process. It also does not analyze the macro-level context of an organization. (Kerzner, 2001) The process provides useful visions into employers reaction to change efforts that lead to confusion hence delays in implementing accounting management system change within the organization. The process is influenced by interrelated factors making the elements be grouped into catalysts, motivators, and facilitators. Motivators affect the process change in a general manner through advancement in technology. (Drucker, 2008) Change in time directly associates catalysts. Facilitators are the conditions that are considered in the decision and implementation of the process. The three elements are the most essential in PMS. Performance management and performance measurement is driven by a variety of institutional factors, which either motivate, catalyze or facilitate change. These factors are themselves interrelated and are essential to bring about the potential for change. A successful process greatly depends on the role of the stakeholders in the creation and pushing for the change that increases considering the commitment, effective communication and support from the management. Change is inhibited by a number of factors including frustrates and delayers which have high impact on the determination of nature and outcomes. The process has an influence on international and domestic market and has the use of institutional management. The process brings out clearly the reasons for the change and also the resistance to the change. It also notes with the first nodes being change factor, influencing factor, motivation for change, rationale for change and the pressure for change. The second nodes include reaction to change, frustrations, confusion, delay, lack of commitment, adverse changes and resistance to change. The approach gives the basis for the identification and investigation of the emerging issues. The study in Pakistan revealed that the banks only used financial measurements. They standardize the measure and uniformly applied them to all the business units without distinction of the nature. The measurements were only done once in a year. The changes are influenced by institutional factors. The motivators in the process included unpredictable economic conditions, the stiff competition and pressure for the banks to increase their accountability. Catalyst for the change involved the reforms of the financial sector, the losses incurred by the bank, change in the regulation of the organization and appointment of new persons to the board of director team. Management of the complexities was managed by the banks through the reforms in the financial sector of the banks. (Drucker, 2008) A change in the regulatory systems also made the complexity of the process to be managed. Other methods that were used for the management of the complexity is together with adequate staff training, technological support, improvement in the task force and also consultancy. The momentums contributed to the changing of the structure of the organization and also a change in the strategies used in the planning process. Performance management and performance measurement was also managed through the selection of new group heads in the organization. The management was also through the certainty of the performance measuring system of the bank that initially were uncertain about their roles. The management also involved more experienced employees to facilitate the changes. (Robbin and Coulter, 2005) Dalliance in the performance management system was managed through computerizing the system and also integration of business units. Communication in the system was enhanced for the management of situations. The management of loans in the banks also made the case managed since the operation system of the banks were almost zero with massive problems with the quality of loans. (Stoddard, 2004) The non-performing loans were eliminated with much care in the liquidation in the mounting bank loses. Management of the system also resulted from the reduction of political interference and also breaking down of the overstaffed departments and also the reduction in over branching. The banks adopted modern banking technology and also the modern management techniques which majorly enhanced the quality of the financial services that were offered by the banks. The innovativeness and competitive nature of the banks led to control of the process. (Kimmel and Weygandt, 2007) This came about from privatization of the banks with strategic location of the bank branches and also the efforts made to reach the customers. The system adopted more dynamic role with the aim of keeping focus on the business environment and also the changes that were likely to occur. (Stoddard, 2004) They focused on the intensity and direction of the changes and prepared with the available resources to incur changes of the competitive environment. Management in the process involved the delivery of goods and services that the customers knew. There was also need to get information from several sources that were timely produced with a high degree of transparency. (Robbin and Coulter, 2005) Accuracy of the information obtained in the field was increased and making them up to date and reducing the dalliance of the information. Temporary solution management was reduced reducing the problems. The control was achieved through development of new markets for the goods and services with close focus on the business environment doing that with much on the instruction of the state. (Stoddard, 2004) The response to the new regulation was by predicting the direction and the intensity of the changes in the banking industry. It led to revisiting the communication channels, business procedures and processes and the responsibility at all levels. Expectations were communicated from top management for the need for change from the beginning. This led to the commitment of the employees to the new measurement system. Consideration of the operation of other banks resulted in the management of the process. The time taken in decision making by the banks was made short to make the decisions quick. (Kimmel and Weygandt, 2007) It eliminated some of the many levels of decision making. Implementation involved the use of information technology that improved the decision-making outcomes and process. The performance of loss making branches was improved by empowering them independently to take decisions that established competitions among the branches. (Robbin and Coulter, 2005) The new organization created functional boundaries that was significant for work patterns and also responsibility for the management. (Seethmruj, 2005) Separation of measures of the head office and the branches was made since the nature of the business activities in the two were much different. Before the management, objectives and targets were made without the consideration of the resources and ground issues. The new system of management led to different performance measurement and controls. (Kerzner, 2001) Consultative practice was made a habit making the system in line with the changing regulations and requirements. Branch managers were made part and involved in the performance measurement function. Employee motivation through bonuses, salary increment, and employee promotions were made based on the performance rather than in the previous time when they were based on the length of tenure. (Robbin and Coulter, 2005) Satisfaction of employees with the new system of management improved the performance. Before the management had little interest in measuring the performance and used the system as other important priorities. The process led to the provision of appropriate, timely information to the business that resulted in improved contribution of each commercial activity. (Kimmel and Weygandt, 2007) The inflexibility was managed by shifting from the manual performance measurement task and processes with automation. This enabled the bank employees to increase efforts to other organization activities. (Stoddard, 2004) The keeping of efficient management information system allows full information on the activities and also the financial conditions of the organization. Management also came as a result of a new performance measurement process, introduction of a branch profitability report and increase in the nature and types of performance measures. The employees made went for more rewarding businesses. The system remained informed on the activities, operating performance and also the financial conditions of the institution. (Robbin and Coulter, 2005) The activities, policies, processes and the procedures were effectively approved by the stakeholder enabling effective and efficient operation. Training of the employees was done at regular interval to keep them aware of the banking techniques and external trends. (Seethmruj, 2005) Performance measurement and management and national environment National environment has significantly affected the process of performance management and performance measurement. (Stoddard, 2004) Many of the organizations in the economy has come to advancement due to pressure that have made them effective and efficient. This is made possible by reducing the taxpayers demand and at the same time maintaining the volume of the products and the quality of services provided. (Kimmel and Weygandt, 2007) Considering the institutional theory, the public through several interventions have significantly affected the performance measurement. Stakeholders have greatly influence the performance management and also performance measurement. The consumers change the way the decisions are made in the process since they are the determinants of the market for the goods and services. (Seethmruj, 2005) 3. Comment The examination of performance measurement and performance management has led to a change in institutional factors and can lose utility if they can adapt to the changes.(Robbin and Coulter, 2005) . A successful organization is determined by the ability of the organization to change which improves performance and enhance accountability. Though the performance management and performance measurement are complicated, the process is crucial to the success of an organization. References Drucker, P., & Maciariello, J. 2008. Management (Rev. ed.). New York, NY: Collins. Kerzner, H. 2001. Project management a systems approach to planning, scheduling, and controlling (7th ed.). New York: John Wiley. Kimmel, P., & Weygandt, J. 2007. Financial accounting: Tools for business decision-making (4th ed.). Hoboken, NJ: John Wiley. Robbins, S., & Coulter, M. 2005. Management (8th ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Seethamraju, R. 2005. Business process management: A missing link in business education. Business Process Management Journal, 532-547 Studdard, N. 2004. The entrepreneurial ventures social interaction with the business incubator management and the relationships impact on firm performance. Team Performance Management. 2009. Team Performance Management: An International Journal. Read More