Global Performance Management Practices - Essay Example

Global Performance Management Practices Student’s name Institution Instructor’s name [March 28, 2012] Global Performance Management Practices Global Performance Management entails the establishment of a broad global performance management system which can be employed in organizations that have branches or offices in various regions or countries. Charles (2009, p.36-44) argues that, global performance management practices help organizations to realize better performance. However, organizations have implemented different performance management systems that have varying degree of success. This disparity has questioned whether or not a vigorous performance management practice has efficient reward to merit a necessary degree of management focus. Nevertheless, multinational organizations need to differently plan to contain for the differences in the various regions which may make a universal performance management practice difficult to realize (Arup 2008, pp.145-158; Charles, 2009 pp. 48-52). Issues connected to formulation of a concrete global performance system entail developing standard compensation regulation rates across nations, position titles, and bonus amounts among others. Implementing global performance management systems have been faced with various challenges. This essay will focus on the challenges that face global PM practices and the positive and negatives of global performance management practices in an organization. To understand the complexity and nature of global performance management and the challenges that underlie this practice, it is important to briefly explore the major performance management practices. They include Budgeting planning and forecasting, strategy management, financial/legal consolidation financial reporting, compliance and risk assessment, as well as other reporting. Budgeting and planning are inseparable tools for organizational management and therefore form a concrete basis for influencing organization performance. Companies can successfully monitor the development and effects of intended measures and change their objectives accordingly by modifying their budgets to actual (Krishna and Akhilesh 2002 p.102-109). Financial/legal consolidation and financial reporting is also a significant aspect in global performance management practice. The formation of a group perspective by consolidation of legal units is not only compulsory for external financial and legal reporting but also acts as a guide for group oriented decisions as well as controlling and planning of the business as a whole (Carsen, Benard, and Axel, 2009 p.13). Other reporting on the other hand is key to performance management and includes all reporting undertakings to external and internal stakeholders. It entails management reporting, operational reporting and external reporting requested by auditors and/or authorities. Compliance and risk management in global performance management practice is critical. In an attempt to learn from previous blunders of banks and government bodies where risk management unsuccessfully mitigated the lead up to the crisis, several companies may now perceive such processes to be more critical for performance management. Controlling the expected increase in regulatory requisites and various aspects of risk will most probably become a more critical aspect of performance management in future (Carsen, Benard, and Axel, 2009 p.13). Strategy management entails the definition and implementation of practices using varying methodologies and approaches such as six sigma, initiative management, balanced scorecard, strategic planning and simulation. Global performance management practices are engulfed by several challenges. There realization of global management performance practices is affected by various factors. The most critical factors have been explained. One of the main challenges of performance management is the global economic crisis that hit the world in the year 2008 (Philip et al. 2009 p.1). Its effects were devastating and are still being felt as some countries and companies have not yet recovered or have collapsed. The main problem facing organizations is the fact that they cannot control or influence these external factors. Whereas global economic crisis is causing many hiccups for organizations, they will probably be temporal. Albeit there is very little companies can do regarding this crisis, they can perceive it as a wakeup call to reorganize their performance management practices. Effective external monitoring helps companies to identify early warning signs while better internal performance management systems enable organizations to focus on the most important issues and allows them to respond to pressures of cutting costs and improving efficiency by restructuring and optimizing their practices. Despite being temporal, global economic crisis will definitely heighten regulations in many firms. Besides, competition is going to rise further making the business scenery more complex. Hence future performance management practices need to address these issues (Carsen, Benard, and Axel, 2009 p.9). Internal and external changes also influence global performance management practices. Whereas credit crunch has been identified to affect performance management, there is more into what affects performance management in an organization. External and external changes influence the operation and performance of an organization (Carsen, Benard, and Axel, 2009 p.10). Major internal aspects that affect performance management system include enhanced content and increased request from the management or the chief executive officer, organizational dynamics such as new products and restructuring which have increased over the last few years affects global performance management practices put in place by a company. External factors on the other hand include policies such as Sarbanes Oxley, industry specific regulations, local laws on performance management systems has also increased significantly. This has increased the complexity of jobs for most employees as established in a study by Carsen, Benard, and Axel, (2009 p.10). The internal and external factors have raised demands on performance management. Increased content, business restructuring and more request for information influence internal change, whereas external factors such as auditing processes and compliance have caused an increased convolution in performance management practices. Disparity between business and IT departments is a largely experienced challenge in organizations. The existing gap between the IT department and the business in understanding and implementation of performance management is a major challenge in the realization of effective performance management. Most often, the business and IT sectors within an organization differ significantly in vision of organizational performance management. This lack of a universal vision on performance management creates an inherent risk that IT and business push their initiatives in opposite directions. This results to inefficiencies, inconsistent solutions and higher complexities in organizations (Carsen, Benard, and Axel, 2009 p.12). There is therefore the need for a common approach to performance management. Forming a ‘business intelligence and performance management competency center’ with both IT and business management knowledge which compels all performance management practices within the organization may help overcome this challenge. There has also been an increase in performance management over the past few years which have greatly affected global performance management. Many people are being involved in performance management as time passes by and as companies continue to realize the importance of performance management. As a result, the process of performance management is becoming more complex day in day out (Mark et al. 2005 pp.131-320). Nevertheless there has been critical breakthrough in the world of technology where various softwares have been developed to help overcome this challenge. Consequently as described by Harold (2010 p. 422-431) the use of software has come with its own challenges and there is need to harmonize global performance management practices according to industry. Despite these challenges, global performance management practices bear a great benefit for the company and must therefore be encouraged and promoted at all levels. A well designed performance management system has the following merits; Performance based conversations is one of the merits acquired through GPM. In many cases managers are busy with their routine work and often ignore the necessary communication with employees that offer the opportunity to guide and give performance feedback (Zeppau and Tatiana, 2003 p.324-329). A comprehensive performance management system pushes the managers to discuss performance matters with the workers. This consistent guidance influences changed behaviors and worker development (Patricia 2010, par.7). If well implemented, a good performance management process can be a constructive way to discover developmental opportunities and can be a critical element of a succession planning system. Every employee is on a development process and it is the responsibility of the organization to prepare them for enhanced responsibility (Patricia 2010, par.8; Zeppau & Tatiana, 2003 pp. 327-330). Performance management leads to staff encouragement. Performance assessment should be merriment of all the great things an employee has done throughout the year and should thus act as an encouragement to the staff. There should be no surprises if matters are dealt with as they arise and not piled until the annual evaluation (Patricia 2010, par.9). Performance management helps in identifying and firing of unproductive employees. No matter how hard we try, not all employees are dedicated to their performance. A good performance management assessment practice can assist in identification and documentation of poor performers, allowing for a soft move if the relationship needs to be ended (Patricia 2010, par.10). It is also important for recorded history of employee performance. It is very crucial that all companies document performance for their employees. This document should be kept in Human Resource employee’s file to help in future reference of performance management process (Patricia 2010, par.11). Employee growth is also realized through performance management. Motivated employees value plan, structure, and development for growth. An effectual performance management process can assist an employee realize their full potential which is a positive thing for both the manager and the employee. A good manager is proud of watching his staff develop and grow professionally (Patricia 2010, par12; Sun & John, 2003 p.258-263). Nevertheless, performance management practices also have negative influences which are discussed below. They are time consuming. Writing performance appraisals for each employee is a complex and time consuming exercise. Performance management practices entail writing reports for performance of each and every employee which is tedious (Patricia 2010, par.3). They act as a discouragement. Performance management is not a pleasurable experience and in most cases ends up discouraging the employees (Harold, 2010 pp 503-518). This process needs to be part of motivation, encouragement, positive reinforcement and annual celebration for year’s accomplishments. It is therefore important that managers record not only weakness that need to be corrected, but also positive aspects of each employee observed throughout the year both of which should be discussed during performance appraisal (Patricia 2010, par.4). Performance management may suffer inconsistent message in that, when managers fail to keep notes and precise records of employee behavior, they may fail in sending consistent messages to the staff members. It is crucial to document both positive and negative issues as they arise in order to keep memory of all the issues and be able to give comprehensive reports during performance appraisal (Patricia 2010, par.5). Biases are also main demerits of performance management practices in an organization. Performance management is a complex process and it is difficult to avoid biases during performance appraisal process. Successful performance management system requires a well structured, focused process and a mature manager to remain unbiased through the appraisal process (Patricia 2010, par.6). Conclusively, global performance management practices are designed to improve performance of organizations across the globe. Despite the geographical and cultural disparities experienced by global companies, it is important to formulate comprehensive performance management principles that will help realize the set goals of the company. Global performance management practices are faced by various challenges including global recession, lack of a common vision between the business and the IT department, increased in performance management interest, internal aspects such as enhanced content and increased request from the management or the chief executive officer, organizational dynamics and external factors such as policies, Sarbanes Oxley, industry specific regulations, and local laws on performance management systems. Nevertheless there are several positive aspects linked to performance management practices such as performance based conversation, help indentifying poor performers, employee growth and development, documentation of the employee’s performance history, and reward system for employee’s good work among others. The negative aspects cropping from performance management entail, biases, time, discouraging of employees, and inconsistent messages. However, performance management practices are important and should be part of the company’s strategy to improve performance. References Arup V., et al. 2008. Performance management systems: A global perspective, New York: Taylor & Francis. Carsen, B., Benard, M. and Axel, B. 2009. Performance management: Current challenges and future directions. Business Application Research Center. Pp. 1-23. Charles, M. V. 2009. Constraints in the Implementation of Performance Management Systems in Developing Countries: The Ghanaian Case International Journal of Cross Cultural Management, Vol.6, No.1, pp. 37-56. Harold, K. 2010. Project Management Best Practices: Achieving Global Excellence, New York: John Wiley & Sons. Krishna P., and Akhilesh, K. 2002. "Global virtual teams: what impacts their design and performance?" Team Performance Management, Vol. 8, No. 5/6, pp.102 – 112. Mark, A. et al. 2005. Global Performance Management for Small and Medium-Sized Enterprises (GPM-SME), International Federation for Information Processing, Vol. 186, pp. 313-320. Patricia, L. 2010. Advantages and Disadvantages of Performance Management, accessed March 27, 2012 http://smartchurchmanagement.com/advantages-and-disadvantages-of-performance-management/ Philip, T. et al. 2009. Performance Management Matters: Sustaining Superior Results in a Global Economy, accessed March 28, 2012 < http://www.pwc.com/ca/en/finance/performance-management/publications/executive-summary-0609-en.pdf > Sun, P. and John L. 2003. ‘Towards Better Qualitative Measurement in Organisations’. The Learning Organisation, Vol. 10, No.5, pp.258-71. Zeppau, M. and Tatiana S. 2003. ‘The ‘STAIR’ Model for Managing and Measuring Performance in the Post-modern Era’. The International Journal of Public Sector Management, Vol. 16, No.4, pp. 320-332. Read More