Indeed, among many of Edward Deming’s observations, his observation on performance management proves to be the most significant for organisations. William Edward’s Deming was an American professor, lecturer, statistician and consultant widely known for his famous observation made on performance management and total quality management that is widely recognised by every nation’s organisations. According to Deming, as stated in the above quote, employee’s performance can be influenced through the system where they work in rather than personal factors related to individual person (Malik, 2018). Putting succinctly, Deming’s observation states that individual performances can be reviewed by finding out the reason what causes them perform within a system. Here it can be noted that according to Deming, employees themselves remain unaware of their own performance level, and if he is correct, employee’s performance is directly related to system where they are working. This essay will further reflect upon similar findings made on Deming’s observations on performance management along with finding out how its adverse outcomes are being addressed in contemporary organisations as well as what necessary HRM skills must be employed to avoid performance management related issues.
One of the reasons for introduction of performance management theory was that many people and researchers wanted to gain recognition for expansion in quality and improvement as seen in US manufacturing units during 1980’s. For instance, the authors of Reengineering and Six Sigma had made practical examination of improvement in manufacturing area and in other cases, complete redoing of activities were observed due to performance issues (Locke, 1996). Whatever was observed at that time, were described as vainglorious as everyone tried taking credit for it (Aguinis, 2013). However, the book on Reengineering was written much professionally as compared to the others and provided researchers with unlimited results that were marketed instantly. That movement ended where authors stated that Reengineering could have worked more properly if only it had more prominent and knowledgeable authors. Thus, Deming’s work became more easily accessible to people since it maintained integrity and respect towards his observations and teachings (Kalpan & Norton, 2005).
Deming’s observation was basically spotted due to the fact that performance at that time were usually assumed and rewarded merely on the basis of employee’s performance rather than looking upon other surrounding factors that could have determined other performance factors and how well does an employee could perform. Nevertheless, Nankervis, et al. (2017) argues that Deming’s statement is often under-valued in contemporary organisations as his contentions depends on his understanding about human psychology that are based on weaker grounds. After all, his investigations lacked formal study and thus a question may arise here, ‘How did he know?’ His theory can be proved effective in a case for example, if an employee is provided with bad quality tools and thus performance outcomes disparage regardless how efficient the employee is. On the other hand, if the same employee is working in a different company with improper management, the employee may again remain demotivated and unproductive.
With due respect to all the performance reviews made in scholarly articles, Deming to some extent might prove true in his observance as poor performance reviews can impacts employees’ emotions adversely, but certainly not as powerfully as he states. Deming, undoubtably commented on what he was familiar with while he made investigation on employee’s performance. Nevertheless, after evaluating contemporary organisational demands for managing, appraising and developing workforce requires much more established approach that can synthesize with organisational objectives (Schleicher, et al., 2018).
Performance and quality management have become an integral part among contemporary organisations to gain competitiveness in global marketplace. Performance management approach introduced by Deming are used by various organisations to implement his theory into their business operations and procedures primarily in functional areas only. The basic reason behind implementing performance management techniques is to reduce errors that occurs during manufacturing and servicing process, improving service or product quality and while increasing customer satisfaction. Nevertheless, Gorenak & Ferjan (2015) argues that application of performance management further varies according to the nature of business, even if it is across similar industry.
In past few decades, global economy has undergone many changes with the advent of global competition and the extent to which companies are affected by one another by some or the other means. As technological advancements and innovation are becoming more necessary to bring forth a critical change for obtaining competitive edge, quality and performance effectiveness have become a significant factor that companies strive to attain (Denisi & Murphy, 2017). The above statement is agreed upon by Aguinis (2013) also who opined that performance management is an organisational philosophy that embodies notion that management policies must consider integrating the idea behind customer satisfaction through highly managed and skilled workforce.
Employees and supervisors generally are surrounded by ambivalent attitudes to show their best to win performance appraisals. Where most of them recognises perceived benefits in documenting, principles, communicating and goal setting areas of performances, others remain frustrated concerning the fact that actual benefit is received only through performance appraisals in organisation they are working in. According to Behery, et al. (2014), the rewards and benefits of performance appraisals often appear overstated and thus the author suggest that typical performance appraisal and development procedure depresses and demotivate individuals, destroys teamwork and trust within workforce that further adds to insult to injury while delivering demonstrable values at greater cost. Findings of Epstein, et al. (2016) suggests that key issues found in earlier studies made by researchers like Deming, Juran and Crosby’s had greater consequences which could be found in performance appraisals systems as addressed by many contemporary organisations. Few of the pitfalls recognised includes demanding of too much from leaders or supervisors, ratings and standards given in unfair and in varied manner, personal biasness seen that replaced organisation’s standards, reduced employee performance due to lack of communication and demotivation among employees due to negative feedbacks. Locke (1996) found that organisations continued doing those things that undermined appraisals and development processes where little time were given for appraisal process as supervisors were generally untrained and not held accountable for their results. Even, the employee’s participation in overall performance management procedure was overlooked where potential and valuable performance related information was neglected by peers and subordinates.
Behery, et al. (2014) found few drawbacks in Deming’s performance management principles as some of the contemporary organisations faced adverse outcomes after employing his principles in their core business strategies. One of the most remarkable drawbacks found in Deming’s principle is the need for organisational commitment for performance improvement and along with finding difficulties in achieving this commitment. Every management level must be on board to make performance procedure successful and any lack in effort or inadequate resources can undermine the entire performance appraisal process. Training and development related issues were also not mentioned clearly in his principles and thus limited initiative towards training, without using statistical tools made the entire process evaluated through inadequate results in many organisations. This further created frustration among employees and resulted severe needs for implementing training programs, especially for the leaders and supervisors. According to Kalpan & Norton (2005), training programs must be given considerations throughout the entire circle of measurements and evaluation of performance outcome which is the reason why many contemporary workplaces focus more on training. However, unless training is further supported by ongoing coaching, the knowledge gained and skills developed remains unlikely to stick.
Although Deming’s principles are trusted by many organisation’s due to its significance while making performance evaluations, many contemporary organisations implement it gravely that resulted in providing them with adverse effects. Another argument was put forward by Aguinis (2013) that performance appraisal and evaluation process of Deming shows flaws in it and practicing such may do more harm than doing good in major cases. Often issues related to executions for continuous improvement lacked in organisations that were handled by traditional performance management principles. Furthermore, due to increased consciousness among contemporary organisations regarding need to make progress in their management techniques, shows a consequence of traditional methods. Hence, present organisations are giving more value to human resource planning, value-added management and total quality management where they have made certain alterations in performance management techniques.
Most of the altered performance management enhanced techniques encountered partial victory majorly due to overly concentrated operations for which superior models were presented by authors and researchers in past years to enhance performance management within modern business environment. According to the researchers, performance management principles laid by great authors like Deming must be taken more on philosophical grounds rather than restricting facets of business organisations. Recent research made by Epstein, et al. (2016) reveals that there are many confusions created over the purposes of performance appraisals that leads to many conflicts among organisational work environment. Nevertheless, such purposes may also benefit organisations by creating competition among employees to perform better than the others, but at the same time creates issues for personnel managements. Putting differently, an inevitable performance appraisal in every organisational context arrives at some judgement about employees worth and contribution towards organisation for over a time period. The ongoing relationship, however, do not stop assessing past failures or achievements that further demotivates employees.
After evaluating current condition in contemporary organisations, it can be suggested that implementation of skilled HRM can bring a significant change that can eliminate adverse outcomes of traditional performance management principles. According to Sheehan (2005), involving employees in management’s decision making further educates employer regarding what can be done in order to expand their business. This will not only provide unity among each other by establishing employer and employee relationship, but also provides management with practical programs that can be designed to provide organisational efficiency. Even, when employees know that they are given importance, they feel enthusiastic and encouraged concerning their work. Rewards and recognition in HRM act as another major driver for employee’s performance as at the culmination, it is acknowledgement or the money that matters most to the individuals. Thus, the feeling that they have been awarded with meaningful rewards and recognition for their performance will satisfy the employees that could further develop their commitment towards organisation (Denisi & Murphy, 2017).
Training and appraisals in HRM are also suggested profoundly in literature whenever topic related to performance management is discussed, as it is applicable to present business scenarios also. Training will not only assist employees to perform their job smoothly but also enhance their abilities, competencies and knowledge while saving organisation’s time and resources. According to Ibraheem & Mohammad (2011), development is career oriented field and if each employee is given a chance to define and develop a career pathway personally, it would minimise their upcoming uncertainties in future and in organisations. Since development is a two-way process, HR managers may come to know about employee’s potentiality for promoting high level or advanced job whereas employees recognize about their role and position in their company as well as their future progression levels. Appraisals is significant for HR of organisations also so that proper succession planning can be made for fulfilling significant posts through recruitment and selection procedure as per requirement. Moreover, by employing HRM in performance management within organisations, hiring of fresh talent along with training the existing ones can be performed on regular basis according to individual performance level. Appraisals among employees will further broaden their outlook to judge and explore themselves whether or not organisations offer them desired position in the workplace. Instead, they will climb ladders that suits to their suitable career opportunity present within or outside the organisation. On the other hand, appraisals will help organisations to retain and attract quality staff along with gaining their loyalty (Malik, 2018).
Edward Deming’s observations were made long time ago in 1980s. He was assumed as a national treasure at that time and many companies embraced his philosophical ideas like Colgate Palmolive, Proctor & Gamble, Harley Davidson, Walmart and Ford. Although many companies were able to recognise his powerful ideas, many others failed to notice it. The question that arise here is that whether what was developed in earlier years, still works in contemporary organisations or not. After evaluating adverse outcomes addressed by contemporary organisations, it can be said that merely adopting some processes as improvement tools can bring dramatic results. This essay does not intend to discourage the use of performance management principles of Deming, but only if they could get implemented after employing HRM skills like training, appraising and development can bring positive outcomes and can lead organisations towards competitive edge with enthusiastic employees.
References
Aguinis, H., 2013. Performance management. 3 ed. Boston: Pearson.
Behery, M., Jabeen, F. & Parakandi, M., 2014. Adopting a contemporary performance management system. International Journal of Productivity and Performance Managemen, 63(01), pp. 22-43.
Denisi , A. S. & Murphy, K. R., 2017. Performance Appraisal and Performance Management: 100 Years of Progress?. Journal of Applied Psychology, 102(03), pp. 421-433.
Epstein, M. J., Verbeeten, F. & Widener, S. K. eds., 2016. Performance Measurement and Management Control: Contemporary Issues. Performance Measurement and Management Control: Contemporary Issues, Volume 31, p. ii.
Gorenak, M. & Ferjan, M., 2015. The influence of organizational values on competencies of managers. E M Ekonomie a Management, 18(01), pp. 67-83.
Ibraheem, S. & Mohammad, S., 2011. Human resource management practices in ZAIN cellular communications company operating in Jordan.(Enterprise: Performance and business processes). Perspectives of Innovations, Economics and Business, 08(02), pp. 26-35.
Kalpan, R. & Norton, D., 2005. The Balanced Scorecard: Measures That Drive Performance. Harvard Business Review, 83(7,8), pp. 172-180.
Locke, R. R., 1996. The collapse of the American management mystique. New York: Oxford University Press.
Malik, A., 2018. Strategic Human Resource Management and Employment Relations (Springer Texts in Business and Economics).. Singapore: Springer Singapore.
Nankervis, A. R., Baird, M., Coffey, J. & Shields, J., 2017. Human resource management : Strategy and practice. 9 ed. South Melbourne, Victoria, Australia: Cengage Learning Australia.
Schleicher, D. J. et al., 2018. Putting the System Into Performance Management Systems: A Review and Agenda for Performance Management Research. Journal of Management, 44(06), pp. 2209-2245.
Sheehan, C., 2005. A model for HRM strategic integration. Personnel Review, 34(02), pp. 192-209.
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