Performance Management for
effective organization
Introduction
In
the Current competitive global environment which organizations operate, the
need of develop and retain highly qualified engaged employees is one of the most
important factor for business growth and survival (Crawshaw, Van Dick, & Brodbeck, 2012). The management of work
and people is a complex processes, which need to produce highly effective and
efficient organization; hence as a way to manage human resources, performance
management (PM) has been widely practicing in modern organizations (Aguinis,
2013).
Develop a high performance culture is one of the main responsibility of the top
managers (Armstrong, 2006). Performance management is a total organizational system,
integrated to all HR activities concerned with look in to the future, improvements,
challenges and opportunities and also a
continuous process, integrated totally with the way the organization is run (Stredwick
,2005). In recent performance management systems have been increasingly becoming
a significant part of organizations, enterprises, and academia as a part of
Human Resource Management. Organizations invest on developing and implementing
methods of performance measurement (Franco-Santos & Bourne, 2005). Employees
are evaluating their dedication to an organization. They want some incentive
for the effort they give to the organization (Riketta, 2002). Because mainly,
the performance of an employee’s drives the performance of an organization,
irrespective of organization’s size, purpose or other characteristics (Aguinis,
2013). This topic would be interesting and meaningful for any organization because
as mentioned earlier the performances of employees have significant relationship
with organizational performance. Also, understanding how Performance management
best practices would help improve organizational objectives and goals and
consequently improve employee performance and organizational performance.
What is Performance Management
Performance
management is a continuous process of setting goals and objectives that align
with objectives in an organization to and measure them to ensure highly efficient
performance (Jaksic, 2013). Performance management systems’ Scope consists of wide
range of trial, dealings, policy, and interventions deliberate to help employee
improve their performance (Denisi & Murphy, 2017). Within performance management
systems, organizations can use wide range of activities, which are designed to
improve employee performance. For instance activities include clearly communicating
performance expectations in employees and informing employees why their performance
efforts are important to organizational effectiveness (Biron et al., 2011).
In
beginning Performance management was one of the responsibility of immediate supervisor (Barnes-Farrell, 2001) but those managers failed to perform as a subordinate’s
performance appraisers due to not having
super, knowledge, and understanding that come with having performed the work, (Coens and Jenkins, 2000). As a result of that
modern performance management systems emerged (Maybe 1999)
The
Process of Performance Management
Single
universally accepted process or model for performance management is not defined.
Various experts have explained the concept in their own ways. Armstrong has
prescribed the model in the form of ‘performance management cycle’. This cycle
has 4 elements which describe how performance management system should be implemented
in an organization (Armstrong, 2006)
Figure
1.1a: The performance management cycle
Source:
Adapted from Armstrong (2006)
Plan: In planning step employee and manager
identify goals and way of accomplish the set goals. This is a result oriented
process hence goals and appropriate behaviors should be clearly defined.
Importantly superior and employee should have common vision towards how to
achieve targets. These are the specific outcomes the employee is expected to
achieve. Outcomes must include specific, measurable performance standards
(Levensaler, 2007).
SMARTER
Objective concept is most practicable and popular concept for set goals or
objectives in performance planning phrase. SMARTER stands for specific, measurable,
attainable, and realistic timely evaluate and readjust. If objective fits to the
SMARTER formula, that objective is specific and tells employees what the end result
should be (Macleod, 2013). It identifies the time
period–one year. Finally, it gives measurable parameters
for accomplishment–within budget and specifications. Successful SMART
goal or objective statement that possesses all seven framework components (Hersh
et al. 2012),
Figure
2 Source (Macleod, 2013).
After
setting objectives or goals establishing employee development goals take place.
In this task addresses areas that need to be improved. Finding plans deficiency
and making correction for them adding new opportunistic goals for grow
employee’s careers and educate new skills. This is the main processes carried
out in last phase in performance planning phase (Williams, 2012).
Act: achieve targets which were set during planning Phase and accomplish targets. Identify new measures to improve performance and documentation regarding to the performance are also take place in Act phase
Monitor: Continues
observation during the operations is carried out in here performance management
is treating as a continuous process and monitoring are being conducted during
the whole year apart from year-end review
Review: In this last phase employees are
accessed using different methods evaluating appraisals and interviews are
carried out to get ranking for work done during the whole year rewarding and recognition are also is conducted in this phase
Success
story of Performance management practice
Figure
3 (Source McDonalds 2019)
With
the new Performance management system, started from 2007, McDonald’s restaurant
network is performing tremendous results in the last decades. This success is being ensuring individual
performance goals, which in line with the McDonalds visions and missions. Performance
management system in McDonalds has designed its planning phase starting with
defining personal performance plan. Managers work with employees to develop individual
performance plan. All Individual objectives and goals are prepared comply with
company annual business plan to achieve company yearly targets also all
objectives are set according to SMARTER concept hence all workers responsible achieve
set goals or targets. In ACT phase Employees perform according to given
objectives and identifying requirements to personal development and
organization development. In monitoring
phase performance data is gathered and recorded using software platforms.
Managers are responsible for monitoring and take corrective actions in case of underperforming
or disaster. In review phase recorded data is analyzed yearly to update performance.
The employees submit their performance proposals to their managers end of the
year and face to face interviews are conducted for assessment, during the interviews
marks are given for performance around what the employee has done (maximum 75
marks out of 100) and how the employee has done it (maximum 25 marks out of
100).According to the marks incentives and bonuses are distributed and managers
will identify employee eligibility for next promotions.
Newly
introduced performance management system significantly increased performance of
the McDonald in first year just after introducing .In 2007, McDonalds’s
revenues have increased by of $6 billion, and total sales have been increased
40% due to newly introduced Performance management system. ( Levensaler, 2007)
Conclusion
Implementing
Effective performance management not an essay possess, hence using agile approach
and adapting situations , will bring about significant results. Practicing and
finding best ways to practice following key point in performance management
will end up with successful performing effective organization culture (Den Hartog et al., 2004).
· Set goals according to SMARTER objectives
· Adopting ongoing process
· Monitoring and Documentation
· Effective performance review
· Transparent rewards and recognition
· Encourage full participation and success.
This
process is proactive process hence it requires interaction between on superiors’
and employee the increased productivity levels resulting from performance management
have proven to be valuable to many organizations.(Armstrong, 2006)
