Disrupted Links in the Performance Management Process at Omega Inc - Case Study Example

Name: Professor: Course: Date of Submission: Performance Management The success of an organization is dependent on numerous factors among them the recruitment and retention of competent and efficient workforce. This function is well ingrained in the meaning of human resource management, which harnesses working human relations within the entrepreneurial entity. The value of human resource management is underscored by canonical objectives such as creation, actualization and strategic appraisal of organizational policy provisions and company development programs. The human resource management department in many organizations is charged with the role of recruiting, selecting, orienting, training and nurturing of employees with the aim of achieving an efficient and high performing workforce. For this reason, employee performance management has become one of the strategic human resource management (HRM) tools that are so crucial in attaining a superior competitive edge over other competitors (Dickinson 2012). Employees’ competence and performance is highly influenced by HRM activities such development of a competitive compensation and benefits program, career development, and proper management of employees’ performance. As a rule of thumb in effective human resource management, managers need to determine whether their entire workforce is performing its roles efficiently and effectively as well as identification of areas that need improvement in order to achieve high performance standards. In order to achieve this, managers should understand the specific roles of every employee, their qualifications, and competence and job expectations in order to determine work force performance. Performance management system has emerged as one of the most important tools in the management of employees’ performance in both public and private organizations (Binderkrantz & Christensen 2012). Performance management system (PMS) facilitates the process of employee performance management through establishment of performance standards used as a guideline in evaluating employee performance. Performance reviews present employees with an opportunity to set their goals and provide feedback to the management in order to remain objective in their respective roles (Pharris 2012). Despite the importance of PMS, studies have revealed inconsistencies in the effectiveness of the systems, a phenomenon attributed to failure in understanding factors that influence effective application of the system (Biron, Farndale & Paauwe 2011). Some of the key influential factors in promoting effective PMS include proper communication of performance expectations, involvement of entire workforce from the senior management to the junior employees, formal training of performance raters and adoption of a broad view in the management. A critical review and evaluation of a Case Study on 'Disrupted Links in the Performance Management Process at "Omega, Inc. gives a broader yet clearer implications of PMS in the HRM realm. Overview of the Case Study Omega Inc. faces performance management related challenges in its operations contributed by its operational structure. The success or failure of the company is greatly influenced by sales representatives that the management of the company lacks direct contact or control over. The HRM field has been described as a congruence of human related factors that seek enhancement of cooperation for improved individual or group performance. Although the performance of Omega Inc. in terms of sales is directly proportional to the sale representatives’ performance, the management has failed establish direct link with them leaving them to operate independently under the franchised dealers (Aguinis 2009). Because of the operational structure adopted by Omega Inc., the performance challenges faced by the company are attributed to failure to understand the specific roles or job description of sales representatives, lack of clear formal operational process, recruitment standards, and poor motivational strategies. The company particularly fails to harmonize its operations with different franchise applying varied management strategies. Nevertheless, the company has embarked on a transformational journey in its operations with the aim of enhancing its overall performance in which several initiatives have been rolled out by Omega Inc as the mother company (Aguinis 2009). The different franchises came to an agreement to establish a franchise-wide performance system as a move towards enhancing the overall performance of the Omega Company. Several measures were embraced in line with this system including formulation of a common mission statement, training of the sales representatives, establishment of a job description, establishment of performance goals and establishment of a superficial feedback mechanism. These are some of the key facilitator factors in implementation of an effective PMS (Biron, Farndale & Paauwe 2011). However, there are significant failures in the establishment of the PMS including lack of employee’s self-monitoring strategies, absence of performance appraisals and proper feedback mechanism. The failure of the PMS of effectively delivering the expected sustainable improvement in performance of its workforce can be attributed to the facilitator factors left out in the system implementation. Performance Management System Clear understanding of the systems rationality and relevant technical demands underlies the realization of the full potential of PMS in organizational performance enhancement. Primarily, the cause for creating and implementing a PMS is to drive and make improved human productivity a reality through predesigned strategies and not by trial and error tactics. For this context, PMS is used in the window of a systematic process within which companies actively involve staff in enhancing efficacy particularly by directing their efforts towards the achievement of company mission and strategic objectives. In essence, the PMS is a procedural management tool for implementing organizational strategy. The first step in every performance management system involves setting of expectations in which the managers should make the organization’s performance expectations to the employees. Such expectations should be inform of measurable goals and opportunities for the employees to grow concurrently with the organization (Haksell 2011). Generally, PMS is important in relaying company goals and objectives across the human capital while building capstones for employee accountability in the sense of realizing organizational strategies. Additionally, organizations monitor individual or organizational performance trend especially through the three-stage principle through this instrument. In this case, the process prerequisites to planning can be identified as present in the Omega Inc. PMS implementation process. This is because the first step taken by the management was the establishment of job description stipulating what is expected of the sales representatives. The management then ensured that they knew their expectations from the sales representatives through distribution of a written job description to the sales representatives. The other important prerequisite preparations step taken by the franchise owners was the establishment of a common mission to guide their performance management system. The development of the franchise-wide mission is in line with the need to streamline the system to fit into the organization’s goals and missions. The PMS cannot be effective without a mission that also the employees should strive to achieve in their operations. The organization’s leadership should ensure that the performance remains within some set goals and missions through creation of measurable goals. According to Kumar (2011), the management should first establish performance goals at the organization level that can then be cascaded to all other levels of the organizational structure of a firm. All franchise managers communicated the franchise-wide mission to all employees. In addition, the prerequisite and planning processes are also depicted through making explicit to all employees what their individual contributions towards the franchise-wide mission should be. However, the planning process misses several issues including the incentive planning or performance appraisal strategies that can partially account for the inconsistencies experienced in the implementation of the PMS. According to Krell (2011), incentive or performance pay forms an important driving factor towards PMS effectiveness hence the need to form part of the performance planning. The departure from the link between performance planning and execution in Omega Inc. is depicted by the intensive training of the sales representatives. Before embarking on their jobs, at the end of the training all sales representatives were given feedback on their performance in the training as reemphasize on the sale quotas as their job performance measure (Ahmed & Kaushik 2011). Before embarking on the implementation of the PMS, it is important to ensure that all employees understand what the system entails and the changes it has on their normal operations (Chamberlain 2011). Therefore, the transition into the system in this case is marked by the training offered to the sales representatives to acquaint them with the expectations of the company and help them fit into the new managerial system effectively. The training process was crucial as a transition step between the planning and the performance execution since the workers needed to understand everything about the initiated change in order for the franchises to transition well into the application of the PMS. The process from performance execution to performance assessment is partly present in the Omega Inc. case where the managers assessed the workers based on monthly sales quotas. Performance management requires progressive assessment but not relying on monthly or annual performance evaluations. According to Walsh (2011), an effective PMS should provide feedback to the employees frequently in order for them to gauge whether they are on course towards achieving their individual goals. Regular feedback mechanisms assist the workers to identify area of improvement that may hinder them from actualizing their individual targets and the organization’s mission. The regular assessment usually puts the employees on their toes and provides them with an opportunity to improve on their performance rather than waiting to learn of their failures at the end of the month or year. In addition, managers can also dismiss employees who show failure to achieve improvement in their performance before they affect negatively on the morale of other workers as well as the overall company performance (Selden & Sowa 2011). In the case of Omega Inc., the sales people lack self-monitoring or assessment strategies or tools leaving them to rely solely on the monthly sales quotas as their measure of performance. Therefore, despite the existence of the monthly sales quota, the assessment process lacks important aspects needed to ensure effectiveness of the PMS. The performance review process is present in this case study as depicted by the presence of the monthly sales quotas that are reviewed at every month to determine whether the sales representatives have achieved their sales targets (Krell 2011). However, the performance review is not well aligned with the organizations missions, which revolves around delivery of quality services to customers but not overall sales. The company lacks performance appraisal forms capable of tracking the overall performance of the sales representatives. This has been attributed to the failure of the system to address some of the performance related issues arising even after its execution. The performance review process applied the company fails to capture all aspects of employee performance such as the quality of service delivered. The focus on sales as the measure of performance in the company contributed to deterioration of the quality of customer service provided. The improper performance review process applied by the company is a major contributor to the ineffectiveness of the PMS. The absence effective performance review is evinced by the lack of strategies to identify what the employees have done well and poorly by citing specific positive and negative behaviors (Aquila & Grissom 2011). This step is crucial in helping the employees adjust their performance and it is absolutely lacking in this case study. On the other hand, the performance renewal and re-contracting is missing in this case study since the implementation of the system ends with evaluation of the sales quotas without indication of any other action. This process should be the final stage in effective performance management system in which the information and insights gained from other process is applied to determine changes that may required in the future to make the system more effective (Aguinis 2009). Review of the entire process against the outlined expectations is crucial in enacting changes in the PM. The lack of the renewal and re-contracting process is a clear indication that the company does not have a PMS capable of allowing clear transition from one process to another. Lastly, the transitions from the renewal and re-contracting to the prerequisite phase is obviously not present because the performance ends even before the later phase is reached. There needs to be a discussion of prerequisites, including job key performance indicators, review of organization’s missions and strategic goals. Because of market change, customers’ preferences and needs change, and product change there is a need to continuously monitor the prerequisites so that performance planning, and all sub-processes are consistent with the organization’s strategic objectives and mission. If the managers and the employees are not constantly reminded of the strategic goals, it is unlikely that the PMS will be of any relevance in accomplishing the outlined expectations of the system. This is significantly evident in the Omega Inc. case study where the managers formulate the franchise-wide mission but fail to observe it throughout the various phases of the performance management process. Fixing Each of the Disrupted Links The inconsistencies experienced by Omega Inc. in its performance management process can be attributed to some the prerequisite and planning steps left out including the incentive planning and appraisal strategies. However, the link between the prerequisite and the planning process is well executed in the case study. The execution phase to assessment is significantly delinked and this can be fixed through allocation of supervisors the duty to observe and document performance of the sales representatives on a daily basis rather than relying solely on the monthly sale quotas. The company can initiate provision of feedback on progression towards its goals and coaching to enhance performance that should be provided on a regular basis. The management should further provide feedbacks regarding causes of negative performances and measures for addressing the observed problem as regards the overall sales volumes and delivery of quality services (Dennis & Bernd 2011). Strategies should be put in place to ensure that employees know that their outstanding performance is being noticed by reinforcing effective behavior and progress. Other than dwelling on the monthly sales quotas to monitor the performance, the company should ensure that strategies are put in place to routinely diagnose performance problems and appropriate measures taken to address the problem immediately. The company can also adopt a scorecard to guarantee progressive assessment of the sales representatives. The scorecard can be used to motivate employees to achieve top performance as well as provide a clear link between each individual and other colleague to the strategic objectives of the organization (Duff & Benn 2010). The performance review though present through the presence of the monthly sales, fails to reflect the real process the manager and the employees meet and review their assessments. Employees receive feedback based on the sales quotas without any appraisal meetings. Therefore, this process can be fixed through providing for appraisal meetings between the employees and the managers before the feedback is given to the employee. The appraisal meetings can help identify areas that need improvement as well as contribute towards employee satisfaction with the system (Hibberd 2011). Although, the feedback is important, the appraisal meeting in the review process is crucial in ensuring that employees are aware of the consequences if poor performance continues. The managers should be able to discuss previous performance findings and assist the employee in discovering how past skills applied in past successes can be nurtured and used to foster similar performance in the future. Since the performance renewal and re-contracting process is completely absent in this management process case study the company should consider including the process as part of its final stages in the implementation of PMS. The franchise managers can use insights and findings from what has already been experienced so far. Such information can be used to review some of the goals and expectations established at the prerequisite and planning phase that may deemed as unrealistic or too high depending on the prevailing circumstances. This process will allow the company to adjust its PMS to fit into the organizational objectives and prevailing market conditions. Managers adjust the previous processes depending on the views presented by the employees during the appraisal meeting to ensure that they do not quite or get demoralized by some of the systems features that may be unfavorable to them (Smither 2009). Since the performance management process is a cycle after the performance renewable and re-contracting process should be followed by the prerequisite phase as the starting process for another cycle. Therefore, the system should not end with last stage but allow the process to re-start all over again through discussion of the mission and goals afresh. This would allow the company to move through several cycles changing the ineffective steps and thus finally establishing an overall effective PMS. The prerequisite process requires continuous monitoring to ensure that the planning process and the subsequent processes reflect the organization’s mission and strategic goals (Smither 2009). This process will allow the management to establish new strategies to address issues arising from first cycle of the system execution. Important factors influencing the effectiveness of the PMS such as performance appraisals and the incentive can be included to facilitate success of the system. Conclusion The performance management process comprises of several phases including the prerequisite, performance planning, performance execution, performance review, and the renewal and re-contracting phase. The process occurs in a cycle with every stage being critical to the success of the performance management systems. The exploitation of the performance management process as a competition tool by organizations has seen the introduction of PMS to assist in the process. The PMS provides standards applied in the performance management process to facilitate effective application of the strategy. The Omega Inc. case study shows presence and absence of some of these performance management processes. The link from the prerequisite to the planning process, and execution are quite clear in this case study. However, critical processes such as the performance review, the renewal and the re-contracting phase and the prerequisite phase are quite delinked. This partially accounts for the ineffectiveness in the PMS implemented by the company. The disrupted links can be fixed in different ways including inclusion of the final phases that are completely absent in the system. The management should ensure that the process is implemented and sustained effectively as a cycle, which would ensure a progressive improvement in the efficacy of the performance management systems. References Aguinis, H 2009, Performance management, 2nd ed, Pearson College Division, Victoria. Ahmed, P & Kaushik, M 2011, ‘Career planning- an imperative for employee performance management system, International Journal of Business Insights & Transformation, Vol. 4, no. 2, pp. 102-109. Aquila, A & Grissom, A 2011, ‘Stop spinning your wheel: why partners don’t do what they say they will’, Accounting Today, pp. 42- 43. 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