Performance Management: Working Conditions and Career Advancement - Case Study Example

PERFORMANCE MANAGEMENT HUMAN RESOURCE MANAGEMENT (Degree for which this dissertation is being submitted) Submitted in part fulfillment of the Date of Submission Contents 1. INTRODUCTION 3 2. Need for Performance Management Systems 4 3. Guiding principles 5 4. Performance Management in HRM 7 4.1 Performance Management Approaches 7 5. Performance Management: Key components in Organizations 9 5.1 Motivation 10 5.2 Performance Appraisal 10 5.3. Promotion 13 5.4 Guidance and Supervision 13 5.5 Addressing Poor Performance 14 6. Practical Aspects: Internal and external workforce 14 7. The Cultural Aspect 19 7.1 Organization climate variables 20 7.2 Improving Standard Of Living 20 7.3 Social Responsibility 21 8. Conclusion 22 References 23 1. INTRODUCTION Human behavior is a complex phenomenon because no one can anticipate accurately what the man is going to do next. The individual joins an organization to satisfy his objectives. But the organization also has its own goals, which need not to be in conformity with the individual goals. If the goals of the individual and the organization are extremely contradictory, a conflict will arise which will either result into suppression of human personality or a complete set back to his work (Ahuja, 2005, p.119). It is not desirable that individual's personality be suppressed but at the same time organization's goals should also be achieved. The performance of an individual should be assessed after a regular interval so that the desired behavior could be maintained. This will also help the organization to satisfy the needs and the aspirations of the individual by providing him more facilities, improved working conditions and career advancement. We differ in our abilities as judges, largely because of differences in rules of judgement. No only do we judge one another but we are sensitive to the fact that others are always judging us (Ahuja, 2005, p.120). We are aware that our acceptability to others can be strongly affected by our ability to sense correctly what others think of us. The fundamental human experience of appraisal action feed - back, and reappraisal also conditions the behavior of individuals within the organization. In simple words, performance management is a systematic evaluation of the individual with respect to his performance on the job and his potential for development. Performance management is concerned with determining the differences of performance among the employees working in the organization. 2. Need for Performance Management Systems For any organization to function, it is important that the information regarding the performance and capacity of the human resource is available. One important benefit of the Performance evaluation system is that it helps top management to make further judgements about the executives who judge others. The top management can get a sense from the various performance appraisals, about the various departments of the organization and also the need of executive development in the years to come. Performance management helps the supervisors to evaluate the performance and to know the potentials of their subordinates systematically and periodically. (Yvonne, 1999, p.124) Following are the benefits of performance management: (a) It helps in the correct placement of workers. (b) Performance management helps in guiding and correcting employees. (c) It helps the employees to know where they stand and consequently they try to improve their performance. (d) The performance management helps to find out the ability of the personnel. This will stimulate them to better their performance in a bid to improve their rating over others. (e) Performance management helps in designing the training programme in better way. (f) The performance management if done scientifically and systematically will prevent grievances and develop a sense of confidence amongst workers because they are convinced of the impartial basis of evaluation. The making of Performance management has a beneficial effect. It brings to attention of supervisors or executives, the importance of knowing their subordinates as individuals 3. Guiding principles The guiding principles of performance management process are (Ahuja, 2005, p.129): Excellence Quality Improvement And Safety People Financial responsibilities . Growth System 1. Excellence - Every organization exists in an environment where it interacts with, and is influenced by, the general public, specific groups (whether they be customers, clients, suppliers, pressure groups, etc) and/or various government bodies. Performance management supports an environment of service excellence, continually improving employee's satisfaction through identification of needs and problem resolution. 2. Quality Improvement and Safety - Quality Management refers to an integrated organization approach in satisfying customers (both external and internal) by meeting their expectations on a continuous basis; by involving all the employees or organization, working on continuous improvement in all products/processes, and adopting structured problem-solving methods. Performance management ensures working procedures practices and lies within regulatory guidelines and in the safest method possible. 3. People - The very first element of an organization is its people. Unless people of the organization interact and do the assigned job, there would be no organization. Performance management supports policies, systems and processes that create equal opportunities for all employees 4. Financial responsibilities - Organizations objectives require activities to be carried out that are beyond one person's efforts. Performance management uses resources and time effectively and efficiently, creating and maintaining a sense of a relationship between the activities of every person in it and those of every other person 5. Growth - Organization design begins with the identification of organizational objectives. There is no rational way of devising what the main structures of an organization should be without an understanding of what the organization is for and what it is trying to achieve. Performance management holds the key for the achievement of the Organizations strategic plan, mission and goals. 6. System - Each organization develops systems for allocating, controlling and monitoring money, things and people. Systems also perform informational activities by gathering information and channeling it to interested users. Performance management measures and continually improves processes inside organization that enhance the ability to manage workflow across all systems, fostering teamwork, and integration among all employees. An important component of the performance management process is to encourage and support continued growth and development of employees. Working with staff to enhance and improve their skills is a form of recognition, a tool for motivation and benefit not only to the employee but also to the organization. Continuous coaching and mentoring are an integral part of this process once a specific plan with measurable goals has been developed 4. Performance Management in HRM Human Resource Department goals are based on the super ordinate goals of the organization. For culture building the specific values of the organization are identified that need to be inculcated in the employees. Some of the values are openness, empowerment and delegation, ownership, commitment and accepting mistakes. HRD can build a system of empowerment and ownership among the employees to develop a sense of commitment. Employees are constantly motivated to involve themselves to produce best developmental activities and the organization is sensitive to the employee's feedback and shares with employees regularly the organizations future plans and programmes and other issues related to the management. It is believed that performance management really should incorporate a broader set of HRM activities, which cover 'job design, recruitment and selection, training and development, career planning and compensation and benefits, as well as performance appraisal' (Stone 2005, p. 140). In essence, good performance outcome is the core purpose of all HRM functions. 4.1 Performance Management Approaches Job design & improving The Work Environment People whose work is highly specialized, repetitive and routine may become dissatisfied with their job. This dissatisfaction often shows itself by reduced output, increased absenteeism and high staff turnover. This very quickly reduces effectiveness of a work area, and influences the effectiveness of the whole organization. A number performance management approaches have been developed to try to overcome this problem. (Yvonne 115) (i) Job Enlargement Job enlargement increases the scope of the job. Employees are given more variety in order to increase job satisfaction. Usually various work functions from a horizontal slice of a work area are combined, giving employees more tasks to perform. Sometimes tasks are rearranged between several employees so that each employee gets a sense of the wholeness of a job. (ii) Job Enrichment With this approach individual employees may be given responsibility for deciding the best way to perform a particular task, and for correcting their own errors. They may also be involved in making decisions, which affect their own work areas. (iii) Job Rotation Job rotation is a system whereby employees move from one job to another. This rotation may occur over various time spans, from, say, every two hours, to every week or month. It gives employees increased variety, and helps to relieve the monotony of routine, repetitive work. It also gives employees the opportunity to develop different skills, and mix with different people (iv) Semi-autonomous Work Groups Semi-autonomous work groups are groups of employees working together, who se largely self-sufficient in terms of managing the tasks and functions for which they are responsible. This approach gives employees a sense of identity with, and responsibility to, the group. Job enlargement, enrichment, rotation and the use of semi - autonomous work groups are all approaches in performance management which can be used to reduce employee dissatisfaction with routine, repetitive jobs. Other approaches include flexible working hours and compressed working weeks (Yvonne, 1999, p. 116). 5. Performance Management: Key components in Organizations There is a need for benchmarking and adopting outstanding practices and processes from organizations any where in the world in order to help the organization to improve its performance. The changing business environment, requiring companies to constantly innovate better performance systems. Employee's diversity and cultural factors and other stakeholders in the company make the task of organization managers more difficult. Organization Key Components In Performance Management Motivation Performance Appraisal Promotion Guidance and Supervision Addressing Poor Performance Source: csb.gov.hk Performance evaluation is, something of an executive, art and science in itself. 5.1 Motivation Recognition of employee performance increases the morale of them and stimulates an urge to excel at the work place, spreading cheer to the families and enhancing the social status of the employee. Sometimes photographs of good performers are displayed and also at felicitation functions publicity in house journals, letters of appreciation-all these increases the morale of the individual and team efforts to boost the quality of work. In some organizations, Non-financial motivation schemes are implemented. Managers must understand the various components of job, for the motivation of employees, are: (a) Growth. An employee needs to feel he is working towards the highest level of responsibility. (b) Achievement. Each employer needs to believe his job matters. (c) Responsibility. An employee job must allow developing self-reliance, knowing that success or failure depends on him. (d) Recognition. An employee needs verification from others what they recognize his achievements. 5.2 Performance Appraisal Performance appraisal is the method of evaluating the behavior of employees in the work spot, normally including both the quantitative and qualitative aspects of job performance. It is a systematic and objective way of evaluating both work-related behavior and potential of employees. It is a process that involves determining and communicating to an employee how he is performing the job and ideally establishing a plan of improvement. The object of performance appraisal falls in two categories: Administrative; and Self- improvement (a) Administrative Promotion: This is perhaps the most important administrative use of performance appraisal. It is of common interest to both, management and employees, to promote employees to positions where they can most effectively utilize their abilities. A properly developed and administered performance appraisal system can aid in determining whether individuals should be considered for promotions (Ahuja, 2005, p.180). It is important that rater must rate the rate for the present job and his potentialities for higher jobs. Other Personnel Actions: In an organization, it may be necessary to consider various types of personnel actions such as transfers, lay-offs, demotions, and discharges. In some cases such actions are imperatives for unsatisfactory performance while in other cases it may be due to economic conditions over which the organization has no control or it may be because of changes in production process. Such actions can be justified if they are based on performance appraisal. Wage And Salary Administration: In certain organizations wage increases are based on the performance appraisal report. In some cases appraisals and seniority are used in combination. Training And Development:. An appropriate system of performance appraisal can be helpful in identifying the areas of skills or knowledge in which employees are not up to the mark or there exist a training deficiency which presumably should be corrected by additional training, interviews, discussions or counseling. These appraisals help in spotting the potential to train and develop them to create an inventory of executive skills. Personnel Research: Performance appraisal helps in the research, especially in the field of personnel management and human relations. Various theories in human relationship are the outcome of efforts to find out the cause and effect relationship between the personnel and their performance. (b) Self improvement Merit rating brings out the deficiencies and shortcomings of the rates. A discussion between the rater and rate conducted in a spirit of co-operation and mutual understanding gives the chance to employee to have an insight on his performance or behavior in the general set up of the organization. The way these discussions are conducted give chance to the employees to take suitable steps to improve upon their performance or to correct their shortcomings. Merit rating helps to spot out a person's ability to see an organizational problem, device ways of attacking it, translate his ideas into actions, incorporate new information as it arises and carry out is plans, through the results. (Ahuja, 2005, p.182) The appraisal programme aims at assessing the record of managerial success and not the manager's personality. Following are the cases, where performance appraisal serves to guide the management in its actions. (a) When promotions are recommended, the men so chosen should generally be those who have received high ratings unless other factors influence the decision. (b) Performance appraisal helps in pointing out outstanding persons in the organization so as to maintain inventory of talented persons. (c) Appraisal influences the management decision in laying off the workers. It tells the management whether it is losing its best men or is improving the organization by shunting out inefficient workers. (d) In taking people from other organizations, appraisal rating help in ascertaining whether have the merit to join the organizations. (e) Performance appraisal motivates the management to give proper weightage to merit while recommending pay increases. (f) In re-hiring the workers, management should give preference to those whom it had previously considered most effective. 5.3. Promotion Promotion is defined as a movement to a position in which responsibilities and presumably prestige are increased. Promotion satisfies the needs of human beings in the organization. Since the promotion depends upon capabilities and good performance, people will try for that if the venues for promotion exist. Promotions, transfers and demotions refer to employees' changing jobs, upwards, sideways or downwards, in an organization. Promotions are made in recognition of superior performance, while transfers and demotions may occur or a member of reasons 5.4 Guidance and Supervision Guidance and supervision reinforces behavior that contributes to good performance and discourages behavior that blocks progress. A basis for effective discipline in an organization is good communication, co-operation and morale within an organization. Employee self discipline is more effective than manger imposed discipline. Counseling or disciplinary interviews aim to correct inappropriate behavior and prevent its recurrence. 5.5 Addressing Poor Performance The capacity for correct-evaluation enables a person to make a realistic and judicious choice of a career. It reveals one's qualities as well as defects and deficiencies. One can then proceed to capitalize on his assets, make up for his defects. Each employee can be placed into one of three categories:. High Performer - A good role model who takes appropriate initiative, and is a positive influence on others and consistently exceeds standards Middle Performer - He gets influenced either by the high or the low performer and may need more experience, inspiration or coaching. They meet standards, respond well to others and strive to do a good job. Low Performer - They may respond to problems in a negative way and does not consistently meet standards. They may not recognize the need for performance improvement Addressing Poor Performance is essential for career programming as it pays rich dividends and eliminates disappointments and frustrations. It gives a sense of right direction and saves one from drift and dissipation of energy and waste of time. 6. Practical Aspects: Internal and external workforce In An Organization, internal and external workforce could impact on the way performance management. Thus, in Performance Management, employee motivation is the main activity for HRD thrust on quality of work life. In an organization among other things, performance management systems for Internal and external workforce will involve the following activities (Bhatia & Batra, 1999, p 45): Proper communication at shop level Employee facilities Employee performance recognition Employee participation with team spirit Development and job enrichment Dynamic HRD efforts i. Proper Communication at Shop Level The main object of HRD philosophy is respect for the dignity of the worker as a human being and motivates his enormous potential for contribution and growth. HRD efforts have therefore to gain the confidence of the worker that he is seen as a member who is important to the organization. Proper communication plays a pivotal role to achieve results in this priority area. Besides the traditional methods of information sharing through house journals, notice boards, shop campaigns, etc., novelty can be experimented for orienting shop communication in tune with the process of work etc. The shop communication forums propagate information to larger numbers on the shop, smaller groups of employees who are facilitated with a forum for two way information in the luncheon sessions on shop annual performance improvement plan. Normally, in these sessions, the workers are invited to a discussion with the senior line managers of the shop on the targets and performance shot-falls/ assignments and encouraged to suggest improvements and highlight attention areas. These discussions explore the latent potential of the silent workers in the shop and provide a forum for their self-expression and contribution to the process of collective decision-making. When the session comes to an end, the group has lunch in the shop-floor canteen, which generates a family atmosphere in the work place (Bhatia & Batra, 1999, p 47). ii. Employee Facilities Performance Management efforts will increase the human values in an organization. Grievance redressal is a 'must' for an organization. Grievance handling has advanced from a formalistic system to a predictive culture. Moving close with the workers and shop grievance enquiries reveal the problems of the workers not only at the workplace but also beyond the periphery of the Plant. Only in this area, performance management goes beyond the shop floor as a missionary movement for achieving integration of the organization and individuals and gaining the employees' confidence in the efforts of the company to be fair and just. Most of the employee services are designed with humanistic care and help for the retiring employees, who can reinforce the lifelong attachment of the company with the employee. Pre-retirement counseling and timely execution of official formalities to expedite payment of all his final dues is monitored and completed by a centralized Final settlement section. The post-retirement facilities will increase the morale of the serving employees who witness the goodwill of the company towards the departing employees. The welfare aspect of employee services has been the basic aim of HRD activities. In the shop floor, counseling facilities create a congenial atmosphere. This will reduce the number of habitual absentee employees. Home counseling is also undertaken to positively correlate the living habits with work attitudes. In spite of all these efforts, there tend to be absenteeism. Seasonal impact of festivals, agriculture and social obligations continue to have a strong influence on workers with the result there is always a declining trend of attendance, which eludes managerial control. Alcoholism, family frictions and other domestic problems post continuing challenges for pursuing HRD efforts more vigorously. Literacy campaigns are also conducted to improve the basic skills of the workers (Bhatia & Batra, 1999, p 50). iii. Employee Performance Recognition Recognition of employee performance increases the morale of them and stimulates an urge to excel at the work place, spreading cheer to the families and enhancing the social status of the employee. Sometimes photographs of good performers are displayed and also at felicitation functions publicity in house journals, letters of appreciation-all these increases the morale of the individual and team efforts to boost the quality of work. In some organizations, Non-financial motivation schemes are implemented. The presence of families and fellow workers in the award function fills the employee with a sense of pride and the enhancement of his social image, brings happiness at home. These factors help to reinforce the sense of belonging off the job also. iv. Employee Participation with Team spirit To maximize enrichment of quality of work life, the management has to generate team spirit and a sense of involvement among the workers. HRD can make use of some methods like celebration of birthday on the anniversary of commissioning the department, has in real experience fetched great rewards. The launching of quality circles and implementation efforts through the formation of 'Shop improvement groups' have established the importance and success potential of small committed work-teams voluntarily taking up improvements in their area of work. These groups provide better prospects for exploration of the human capabilities to mobilize an ongoing improvement process on the shop floor. When individual workers are allowed to express their creativity for technological and overall improvements on the other hand the HRD efforts have to promote group working as the effective medium of implementation. Attention has to be focused upon enabling the work groups to enlarge their vision and enrich the understanding of their role in the integrated working of the organization. v. Developments and Job Enrichment Job satisfaction increases work efficiency and hence they are indispensable elements of work-life. Initially, the HRD aims to develop the knowledge and skills of the worker to keep pace. HRD attention on shop training activities and multi-skill development have positively shaped the attitudes and competencies of the workforce and improved the possibilities to optimize their utilization. Formulation, propagation and adherence to standard operating practices on specific work positions, imparting shop based training through unit training centers, multi-trade training and induction orientation for fresh recruits, identification of the skill needs of the existing employees in the revised job combinations and enrichment of their knowledge/competencies through on-the-job training these various activities prove rewarding in worm-like at the shop-floor (Bhatia & Batra, 1999, p 52). vi. Dynamic HRD Efforts Performance Management philosophy strongly believes that the -workers involved in the process of work are the best qualified to bring about improvements in their area of work. Every worker has creative abilities, which can be tapped through managerial encouragement and support. From this angle the suggestion scheme has emerged as a dynamic HRD mechanism. While the attraction of awards for the suggestions is an offshoot of the scheme, the satisfaction potential inherent in the implementation of the worker's own ideas of improvement provide the drive and impetus to the improvement efforts in the shop-floor. Various issues relating to effective performance management: 7. The Cultural Aspect Culture is the mix of behaviors, thoughts, beliefs, symbols, and artifacts that are conveyed to people throughout an organization over time. Culture may include a belief about desired employee conduct. The culture appears as a constraining variables job performance. A model for understanding organizational culture and performance management is: Which effect Determine Modifies Source:: Ahuja K, (2005). Human Resource Management. Pp 148 7.1 Organization climate variables Managers should follow these five climate variables for performance management in an organization Managerial support. The degree to which the manager "increased his subordinates' feeling of being worthwhile and important people". Goal emphasis. The degree to which the manager "stimulates enthusiasm for getting the work done". Work facilitation. The degree to which the manager "helps his subordinates to get the work done by removing obstacles and road blocks". Interaction facilitation. The degree to which the manager "builds the subordinate group into a work team". In addition 7.2 Improving Standard Of Living The employee's participation would improve when the company takes steps to maximize his joy of living at home and in the larger society. Following are the key areas where the company has to concentrate to improve the quality of work life (Bhatia & Batra, 1999, p 55). 1. Provision of housing facilities 2. Provision of entertainment facilities 3. Arranging family get-togethers 4. Developing the talents 5. Managerial involvement in family functions 6. Medical facilities 7. Sports and games facilities 8. Scholarship facilities to improve academic performance 9. Counseling centers 10. Company support in consumerism 11. Post-retirement benefits 12. Associating families in company functions 13. Protecting the employees' families during times of crisis. 14. Educating the employees on family welfare, savings, civic sense, etc. 7.3 Social Responsibility Generally, societal factors determine the attitudes, work patterns and the living ways of the employees. Improvement in work life therefore depends upon improvements in the social conditions. Infrastructure development provides a face-lift to the society in which the employees still have their roots. Generally, the worm-like, besides fostering the growth of the company, ensures the progress of the society around. The social service areas have large scope for more dynamic performance management thrust in HRD activities on strengthening the bondage between the organization and the individual. Educating the employees on the lines of decent living, alcoholism, indebtedness, family conflicts, etc. and provision of facilities to fulfill the religious/ social duties of the employees. All these emphasize the need for off-the-job improvements as a precondition to the improvement of work life. Conclusion The term 'performance management' refers to all formal procedures used in working organizations to evaluate personalities and contributions and potential of group members. The performance management is a formal programme in an organization, which is concerned not only with the contributions of the members who form part of the organization, but aims at spotting the potential also. The satisfactory performance is only a part of the system as a whole and the management needs more than merely evaluating the performance of the subordinates. There are no two opinions about the necessity of performance management; only thing to study is the system of performance management, which can meet these requirements of the management to achieve the organizational goals. To conclude, Performance management initiatives should envisage all dimensions of work place, home and society. Quality efforts should generate a continuous drive for self-actualization of human potential at work place, happiness at home and prosperity of society at large. *** References Ahuja K, (2005). Human Resource Management. Kalyani Publishers, Calcutta, Pp 119-280 Bhatia B S & Batra G S. Encyclopedia of Business Management. Human Resource Development. Deep & Deep Publications. Rajouri Garden. 1999, p.45-55 David C. McClelland: 'Achievement Motive can be Developed,' Harvard Business Review, Nov.-Dec., 1965, p. 22. Performance Management, [online] http://www.csb.gov.hk/hkgcsb/hrm/e-hrm-guide/pm.htm Yvonne Mc Laughlin, (1999). Business Management: A Practical guide for Managers, Supervisors and Administrators, Business Information Books, Pp 117-189 Read More