How to Improve Management Performance of Your Organization - Case Study Example

Managing Performance Introduction Managing performance is the procedure of assessment of progress, of an organization, towards a desired goal. Itis the measurement, analysis and optimization of resources to provide a service to a level that has been agreed upon. It focuses on the delivery of service. (Abbey, 2007). Communication between manager and employee is important to increase the productivity, improve staff morale and motivation and allow coordination of each employee's work so it contributes to the goal of the company. But difficulties during the procedure arise because many managers focus on the wrong things. The important aspect in managing performance is the leadership skills that can be enhanced alongside attitudes, interpersonal skills and behaviours.(Abbey,2007). It helps to retain and maintain people who embody the basic human capital of the organizations as they are the one responsible for the execution of the strategic plans of the business. (Abbey,2007). This essay includes the analysis of the issues in managing performance by citing cases in an organization that involves performance management. The views and opinions of several organizations about the affectivity of the management are cited. The disadvantage and advantages of the performance management are enumerated to further support the importance of such management. Based on the studies that will be presented in this essay effective performance management will result in an increase in sales and greater profitability. Performance Management Managing performance involves the evaluation of the employee and an appropriate compensation for the job. Companies and managers have conflicting ideas about this. In the study done by Harris (2001), it involves two phases. It is about the argument that the importance of managerial values and assumptions about rewarding individual performance has been an overlooked and underestimated dimension in the design and application of individual performance-related pay processes (IPRP). The study revealed that, in practice, this was largely assumed rather than actively pursued and developed. The aim of the survey done was to identify, through an initial questionnaire and follow-up semi-structured interviews, the line managers' perspective on the effectiveness of performance-related pay processes in terms of encouraging the types of behaviours employers stated they were seeking from their employees. The study done by Harris (2001) wants to prove that a well compensated employee will result in a well done job and thus increases the output and the profitability of the company. It is the responsibility of the managers to fill in the gap between the missing links of aspirations and results, by motivating their employees, through management of their performance.(Abbey,2007). The organizations are aware that the success of the strategy is dependent on the effort and capabilities of their employees to implement the strategy that makes all the difference to their flourishing business.(Abbey,2007). In the study done by Harris (2001), 78 percent of respondents identified a non publicized objective which is to increase employee commitment and improve individual motivation through a fairer reward system more focused on business objectives. This was referred to by the study as an official agenda. Another objective identified as an hidden agenda was concerned with the control aspects of performance management system, which changing the culture, making managers manage, dealing with issues of under-performance, reducing staffing levels and costs while increasing workloads. Another important objective is to increase the potential of an organization, in order to achieve its strategy; it is important that organization develops and creates the capabilities of its employees. Effective people management is the only key to improve the businesses performance. The most important purpose of Performance Management is to increase the effectiveness of the employees. This should be done, in order to improve the performance of the business.(Abbey, 2007). Performance management are done planned, systematic and explicit or unplanned and implicit. The planned assessment uses tools such as the one used by Harris (2001) a comprehensive questionnaire, SWOT analyses, diagnostic models and others along with comparison of results to various "best practices" or industry standards. The Process of Performance Management Performance management according to U.S. Office of Personnel Management is the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals. Employee performance management includes: Planning, Monitoring, Developing, Rating and Rewarding. (U.S. Office of Personnel Management). Planning means, setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. The same process is being used by Mcdonalds in training their staff. The regulatory requirements for planning employees' performance include establishing the elements and standards of their performance appraisal plans. Performance elements and standards should be measurable, understandable, verifiable, equitable, and achievable. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities. Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. Monitoring well means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals. Regulatory requirements for monitoring performance include conducting progress reviews with employees where their performance is compared against their elements and standards. Ongoing monitoring provides the opportunity to check how well employees are meeting predetermined standards and to make changes to unrealistic or problematic standards. And by monitoring continually, unacceptable performance can be identified at any time during the appraisal period and assistance provided to address such performance rather than wait until the end of the period when summary rating levels are assigned. Developing means increasing the capacity to perform through training, giving, assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens job-related skills and competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology. Rating means evaluating employee or group performance against the elements and standards in an employee's performance plan and assigning a summary rating of record. The rating of record is assigned according to procedures included in the organization's appraisal program. It is based on work performed during an entire appraisal period. The rating of record has a bearing on various other personnel actions, such as granting within-grade pay increases and determining additional retention service credit in a reduction in force. Good performance is recognized without waiting for nominations for formal awards to be solicited. Recognition is an ongoing, natural part of day-to-day experience. A lot of the actions that reward good performance - like saying "Thank you" - don't require a specific regulatory authority. Nonetheless, awards regulations provide a broad range of forms that more formal rewards can take, such as cash, time off, and many nonmonetary items. The regulations also cover a variety of contributions that can be rewarded, from suggestions to group accomplishments. Benefits of Performance Management According to Robert Bacal (1998) Performance management when used properly will benefit the managers, employee and the organization. One of the key benefits of Performance Management is that it focuses on results, rather than behaviours and activities. A common misconception among supervisors is that behaviours and activities are the same as results. Thus, an employee may appear extremely busy, but not be contributing at all toward the goals of the organization. An example is the employee who manually reviews completion of every form and procedure, rather than supporting automation of the review. The supervisor may conclude the employee is very committed to the organization and works very hard, thus, deserving a very high performance rating. ( Mcnamara, 2007). Another benefit is that Performance Management aligns organizational activities and processes to the goals of the organization. Performance Management identifies organizational goals, results needed to achieve those goals, measures of effectiveness or efficiency (outcomes) toward the goals, and means (drivers) to achieve the goals. This chain of measurements is examined to ensure alignment with overall results of the organization. (Mcnamara, 2007). It cultivates a system-wide, long-term view of the organization. Richard A. Swanson, in Performance Improvement Theory and Practice (Advances in Developing Human Resources, 1, 1999), explains an effective performance improvement process must follow a systems-based approach while looking at outcomes and drivers. Otherwise, the effort produces a flawed picture. For example, laying off people will likely produce short-term profits. However, the organization may eventually experience reduced productivity, resulting in long-term profit loss. Performance Management produces meaningful measurements. These measurements have a wide variety of useful applications. They are useful in benchmarking, or setting standards for comparison with best practices in other organizations. They provide consistent basis for comparison during internal change efforts. They indicate results during improvement efforts, such as employee training, management development, quality programs, etc. They help ensure equitable and fair treatment to employees based on performance. (McNamara, 2007). The above benefits can be achieved if the Performance Management process is being used properly. It is a process that involved the managers, the employee and the organizations. How to Improve the Effectiveness of Performance Management According to Julie Freeman (2006), it is best to identify the root of the problem to be able to adopt the Performance Management effectively. There is a huge amount of frustration and dissatisfaction with existing methods of formal employee performance management appraisal. Regardless of what approach it is the problems appears to be the same. While they all appear to work well enough in theory, to a greater or lesser extent they all tend to fail in practice. They just don't seem to measure up to the expectations that managers, employees, and organizations alike have for them. This appears to be the case even when the implementation of a given method is well managed and accompanied by proper training on how it should be used. It has been mentioned in the benefits of the Performance Management stressing that the success of the process depends on the proper use of the approach. There are organizations that encourage the managers to talk to their employee informally about the performance appraisal. However, there are managers who are not welcoming the idea. Moreover, even if it does occur, the discussion itself and the results it achieves are often less than ideal. Despite our best efforts to date, managers still report that they are uncomfortable giving feedback and discussing performance with their employees, especially if poor performance is a factor. Consequently, they avoid the situation, or fudge the facts, whenever possible. Base on the study and analysis done by Freeman (2006), an estimate of 10% managers will talk with their employee formally or informally regarding their performance. It seems that it is not an effective approach in solving the problem. Since it is likely that this population follows a normal statistical distribution it means that, for the remaining 90 per cent of managers, giving feedback and discussing performance with employees remains a task that is easier said than done. This appears to be the case regardless of whether or not they have previously received any training in how to do it properly. Aside from the obvious negative consequences that a problem of this magnitude has on an organization's productivity, the costs on a human level in terms of low morale and demotivation may be equally devastating. While this cost is not necessarily quantifiable, it is definitely reflected in the bottom line. Not being 'open and honest' with employees about their performance, how they are perceived by management and what such a perception means for the future, raises some important moral and ethical questions around an organization's responsibility for, and often-stated commitment to, developing its employees. (Freeman, 2006). There are some cases wherein the customer appraisal resulted in less performance of employee. Instead of using the appraisal as a chance of improvement some employee would take it as a negative feedback and would result in low performance. Since managers and organization uses different approach in appraising their employee, the success of it depends on how to apply the process. One of the advantages of using such appraisal is that it benefits the employee, the managers and the organization. Depending on the approach the managers can help the employee to work well. Instead of giving negative feedback the managers can address the employee by giving positive reactions on their performance. In the paper written by Collins (2002), one of the companies on study uses humour to solve employee problem. Based on his paper there are three specific aspects of joking, first, humour was shown to operate as one medium through which collective solidarity to resist boredom, the organizational status system and managerial control emerged. Second, shop-floor joking was found to embody considerable social pressure to conform to its central preoccupation with working-class masculinity. Third the research discovered that shop-floor humour became a means by which workers sought to control those perceived to be not "pulling their weight." Humour in the study of Collins helps the employee to have a better atmosphere and inspired them to work. Appraisals and assessment to the employee are being welcomed as long as they will receive the proper and fair assessment. Employees, managers and organization should agree on a list of workload to be assessed. Negative or positive feedback will be helpful as long the employee would treat it as an eye opener on what they are doing. A fair compensation should be given to employee who received a remarkable and positive result during the appraisal. Conclusion The success of the Performance Management will depend on the employee, the managers and the organizations. An assessment of the employee should be done quarterly to be able to evaluate their performance accurately. Managers should have a focus as to what they will be evaluating. Computation of compensation is important especially to those who have worked hard and have shown sincerity on the company. Evaluation of the employee can be done using a questionnaire to be accomplished by the employee. If the process is practiced properly then the employee, the manager and the organization will benefit well on its success. Assessment of employee should be done by his co employee, the managers and the customers as well. Is it beneficial to all the organization, proper motivation to the employee will result in a favourable one Studies and several articles are helpful in assessing the employee. From these articles we will be able to know the proper approach in making an assessment. Proper assessment and appraisal plus well compensated employee will result in increase in output and there increase the sales and profit of the company. As a conclusion it is true that an effective performance management will result in an increase in sales and greater profitability. Reference Abbey Paul, Managing Performance, Ezinearticles , 21 August 2007. January 15, 2008 Bacal, Robert, 1998 Performance Management Mcgraw Hill Freeman,J. (2006) How to Improve the Effectiveness of Performance Management and Appraisal by Overcoming the Root Cause of the Problem http://www.hrmguide.com/performance/freeman.htm How To Improve Management Performance Of Your Organization http://www.managementperformanceadvice.com/ McNamara, C. 1997-2007 Performance Management: Benefits and Concerns Adapted from Field Guide to Consulting and Organizational Development http://www.managementhelp.org/perf_mng/benefits.htm Staff Training and Motivation at McDonalds." 123HelpMe.com. 15 Jan 2008 . U.S. Office of Personnel Management, 2007 http://www.opm.gov/perform/overview.asp Read More