Boeing Performance Management Analysis - Essay Example

Running head: BOEING PERFORMANCE MANAGEMENT REPORT Boeing Performance Management Report s Abstract: The paper undertakes the examination of performance management process at Boeing and will find out the appropriate suggestions and the benefits of these suggestions for the Company. The study also underlines the importance of Pay and financial benefits as a strategy of performance improvement in today's volatile business environment at International level. Methodology followed: Finding Journal articles more specified, up to date and directed towards the specified areas, the reference material is mostly comprised of Journal articles, material provided on Internet and most importantly on performance management plan of Boeing. Performance management is a developing subject area. Not many current and up to date books are available. Journal articles are more helpful providing to the point and current research material. The material used is basically based on material printed in last five or six years. Material related to the Performance Management mostly depicts diverse direction of thinking by different practitioner and the theories stated by them. Findings: There is a big room for improvement, which is required for the company to improve its performance management process. It is also noticed from the previous research that the activities related to performance management process in the company were not synchronized with the organisational culture of the company. Limitation of the study: - There is a vast area related to the topic addressed, which needs to be researched and analyzed. The comparative study of performance management practices in different countries could also be undertaken. Practical implications: The study is a fair effort to help the individuals and the professionals attached to the field to understand the benefits attached to the right performance management process in the development of a company. Introduction: Mullins (1998) defined motivation is a complex subject and is influenced by many variables. Individuals have a variety of changing, which they attempt to satisfy in a number of different ways. Motivation at work operates in two ways. First, people can motivate themselves by seeking, finding and doing work which leads them to expect that their goals will be achieved. Second, people might be motivated by management through such methods as pay, promotion and praise. These two ways can be described into two types of motivation (Armstrong, 1999): Intrinsic motivation- It can be described as the process of motivation by the work itself in so far as it satisfies people's needs or at least leads them to expect that their goals will be achieved. It is self-generated factors which influence people to behave in a particular way or to move in a particular direction. Intrinsic motivation refers to the intrinsic attractiveness of work itself (Child, 1994; Jackson & Bak, 1998; Tung, 1991). Extrinsic motivation- This includes rewards such as increased pay, praise or promotion. It is crude, easy and often effective. Money is individual basic need. As Duall (1999) said that when individuals are able to satisfy their perceived needs, they see themselves as being successful. In this view, the desire to achieve personal success is a natural phenomenon, and people are self-motivated to achieve, grow, and develop in positive ways (Greenberg, 1986a & b). Herzberg Motivator Hygiene Theory Herzberg (1966) proposes that all individuals have two sets of needs hygiene and motivator. Hygiene factor affect job dissatisfaction, these include such things as quality of supervision, pay, company policies, physical working conditions, interpersonal relations and job security. Job satisfaction appeared to be caused by motivator factors; these include promotional opportunities, opportunities for personal growth, recognition, a sense of achievement and responsibility. Most of the employees prefer to be recognized and appreciated through increment in pay (Bowman, 1994; Burke et al., 1978). The trend is more likely in the Private sector as compared to the public sector. Compensation surveys in the United States have consistently reported that pay-for-performance systems are used in the vast majority of private firms (Hay Group, 1989; Hewitt Associates, 1989; Locher & Teel, 1988; Peck, 1984 & Wyatt Company, 1987) The multinational companies like Boeing have got several performance management tools which are the result of long history of mergers and acquisition undertaken by the company. The complex culture of the organization also makes the performance management a complex task for the management of the company (Silverman, 1984). The complexity of the process has forced the management of the company to work on continuous basis in order to develop the most appropriate system for the performance analysis, reward management and salary appraisal (Steel, 1985). As the management of the company was not satisfied with the previous system of performance evaluation and pay appraisal the company has implemented the IPA system in order to evaluate the overall contribution made by an employee in the progress of the organization. The system will help the employees in establishing a clear link between their goals, performance rating and salary adjustment." The new system will enhance the clarity and visibility of the performance evaluation and salary appraisal process by providing the Managers with information from the Performance Evaluation along with other data in order to make the process fairly related to the contribution made by the employee for the betterment in the performance of the Boeing Company. The process has been made effective by delegating the powers to departmental managers to evaluate the performance of employees on individual basis and make recommendations about the salary appraisal. The process is also helpful in the evaluation of the employee value for the organization. The employees also get chance to discuss their performance with the departmental manager and provide their feedback on the policies of the company. The employees themselves discuss their accomplishments with the manager and hence get to know about the salary appraisal they receive. The system has increased the level of co relation among the individual goals of employees, performance and relative value of an employee's contribution. The employee-led Performance Development Partnership (PDP) implemented by the company has helped Boeing in undertaking effective employee development and career growth plans in the company. The program has also encouraged the employees from top to bottom level to perform well. This has not only contributed to the individual development of employees but also benefited the company as a whole. The PDP helps the employees in discussing their individual career goals with their departmental managers. This helps the managers in understanding the direction of employees as to where they are heading towards, what they want to achieve and their future objectives. Many managers at Boeing tend to align the individual goals of employees with the organizational goals by assigning them with the projects related to their areas of interest and hence combining the individual goals of employees with the organizational goals of the company. The implementation of the PDP plan is very successful at Boeing as the company observed 100% participation of employees in the PDP plan."A PDP is an excellent tool for career development because it promotes identifying and tracking goals and objectives," Reinhardt said. "I believe that we need to standardize processes like these and sustain them. That's what will really help employees feel the loyalty and buy in to the connection between their work, their goals, company goals and pay." (Arkell, 2005) Crosby, 1979) presented the following steps in order to undertake performance management in effective manner: 1. Management Commitment: Top management must become convinced of the need for quality and must clearly communicate this to the entire company be written policy, starting that each person is expected to perform according to the requirement or cause the requirement to be officially changed to what the company and the customers really need. 2. Quality improvement team: From a team composed of department heads to oversee improvements in their departments and in the company as a whole. 3. Quality measurement: Establish measurements appropriate to every activity in order to identify areas in need of improvement. 4. Cost of quality: Estimate the costs of quality in order to identify areas where improvements would be profitable. 5. Quality awareness: Raise quality awareness among employees. Corrective action: Take corrective action as a result of steps 3 and 4. 6. Zero defects planning: From a committee to plan a program appropriate to the company and its culture. 7. Supervisor training: All levels of management must be trained in how to implement their part of the quality improvement program. 8. Zero defects day: Schedule a day to signal to employees that the company has a new standard. 9. Goal setting: Individuals must establish improvement goals for themselves and their groups. 10. Error causes removal: Employees should be encouraged to inform management of any problems that prevent them from performing error free work. 11. Recognition: Give public, non-financial appreciation to those who meet their quality goals or perform outstandingly. 12. Quality councils: Composed of quality professionals and team chairpersons, quality councils should meet regularly to share experiences, problems, and ideas. 13. Does it all over again: Repeat steps 1 to 13 in order to emphasise the never-ending process of quality improvement. (Ross, p. 6-7) Conclusion: With the increasing globalisation the importance of performance management in business organisation is also multiplied. The role of a manager has become complex due to the multicultural workforce increasing diversity, difference in perceptions and lack of synchronisation in different departments. On the other hand the increasing expectations of employees also add to the challenges facing today's managers. Despite all these changes pay increment and financial benefits are still important source of motivation for the employees. In order to undertake the In order to undertake the change process effectively it is important to change the culture of organisation. This can be done in a strategic way by communicating with the employees and making them getting over their fears regarding the change. The change applications and projects that develop those applications have always been subject to certain behavioural influences. The influences that can affect the performance of employees as they perform their tasks are regarded as human factor considerations. Arkell, D., (2005). The road to rewards: Boeing's common performance and salary review processes pave the way for your progress, Boeing Frontiers, Volume 04, Issue 7, November, 2005, retrieved as on Oct 03, 2009 from http://www.boeing.com/news/frontiers/archive/2005/november mainfeature1.html Bowman, J. S. (1994). "At Last, an Alternative to Performance Appraisal: Total Quality Management," Public Administration Review 54: 129-136. Burke, R. J., W. Weitzel, and T. Weir. (1978). "Characteristics of Effective Employee Performance Reviews and Development Interviews: Replication and Extension," Personnel Psychology 31: 903-919. Child, J. (1994). Management in China during the Age of Reform. Cambridge: Cambridge University Press. Greenberg, J. "Organizational Performance Appraisal Procedures: What Makes Them Fair," In R.J. Lewicki et al. (Eds.), Research on Negotiation in Organizations: Vol. 1. (pp. 25 41). Greenwich, CT.: JAI Press, 1986a. Greenberg, J. (1986b). Determinants of perceived fairness of performance evaluations. Journal of Applied Psychology 71(1986b): 340-342. Hay Group, Inc. The Hay report: Compensation and benefits strategies for 1990 and beyond. Philadelphia, PA: Hay Group, Inc, 1989. Hewitt Associates, (1989). Compensation trends and practices. Lincolnshire, IL: Hewitt Associates, 1989. Jackson, T. & Bak, M. (1998). "Foreign companies and Chinese workers: employee motivation in the People's Republic of China", Journal of organizational change management, Vol.11, Mo.4, pp.282-300. Locher, H.A. and K.S. Teel, (1988). Appraisal trends. Personnel Journal 67(9): 139-145. Mullins, L. J (1998). Managing people in the hospitality industry. Harlow: Addison Wesley Longman. Peck, C.A., (1984). Pay and performance: The interaction of compensation and performance appraisal. New York: The Conference Board. Ross, J. E., (no date available). Total Quality Management: Text, Cases and Readings, Second Edition, Florida Atlantic University, Boca Raton, Florida, pp. 1-3 Silverman, S. B., and K. N. Wexley. (1984). "Reaction Employees to Performance Appraisal Interview as a Function of Their Participation in Rating Scale Development," Personnel Psychology 37: 703-710. Steel, B. S. (1985). "Participative Performance Appraisal in Washington: An Assessment of Post-Implementation Receptivity," Public Personnel Management 14:, 153-171. Tung, R. L. (1991) "Motivation in Chinese industrial enterprises". In R. M. Steers & L. W. Porter (Eds.), Innovation and work behavior. 5th edition. New York: McGraw Hill. Wyatt Company. The 1987 Wyatt performance management survey. Chicago: The Wyatt Company, 1987. Read More