Encounter In Operating Performance Management Programme

The challenges that global organisations may encounter in operating a performance management programme across all of their operations

Describe about the Encounter in Operating Performance Management Programme.

Increased business functions and the need to manage business processes better have led to the emergence of strategic business concepts that focuses on increasing the capacity of a business to manage both internal environments. Performance management is a process of identifying, measuring and developing performance in an organisation through linking the needs of the business to the objectives the organisation. Aguinis (2009, P.8) argues that the role of performance management is to ensure that activities within the organisation are aligned with the business goals in effective and efficient manner. This process of aligning activities can be geared towards a department, the employee or the whole organisation. This ensures that resources, systems and employees within a firm or organisation are strategically aligned to business objectives and priorities. Through this alignment management and employees work together to plan, monitor and review work objectives to increase their overall contribution to the whole organisation (Salaman, et al., 2005, P. 12, De Feo, 2007, P. 12). Feedback mechanisms are applied to test the adoption of the proposed strategies within the organisation. Therefore the fundamental goal of performance management is to promote employee effectiveness through a continuous process of planning, monitoring and reviewing employee effectiveness. It is an evolution of management that shifted from the bureaucratic merit system to performance-based management where the organisation focuses more on the employee rather than on the processes.

There is no single defined model that can be applied in performance management but rather there are different proposals that have been advanced by different scholars. Mabey prescribed performance management a system in the form of a performance management cycle with five elements that organisations need to implement to improve performance management. These elements are objective setting, measurement of performance, feedback of performance results and reward system on performance and amendment of objectives and activities to meet business needs (Aguinis, 2009, P.12). On the other hand Salaman argues that there are two theories that can be applied in performance management; goal setting theory and expectancy theory. Goal setting theory proposed by Edwin Locke is based on how individual goals set by the employee contribute to the performance by motivating him. The employee sets realistic goals and follows them and thus an improvement in the goals leads to increased organisational performance (Salaman, et al., 2005, p. 13). Expectancy theory proposed by Vroom is based on adjusting of individual behaviour to meet the expected and values goals of the organisation. The individual will modify behaviour in a way that enables them with achieve goals. However, most processes of performance management have been based on three steps of planning, monitoring and reviewing while the Government Finance Officers Association (GFOA) proposes a six-step process of implementing performance management as follows: Make the Case for Performance management; Identify how performance Information Will Be Used; modify existing processes or create new processes to accommodate new performances; develop measures that are appropriate for situation; and lastly focus on change management (Nielsen, 2014, P. 433). Therefore organisations are spending a lot of resources on performance management as a key business tool for strategic global management.

Global performance management in organisation is being faced with internal and external challenges that have limited the results to be realised from the process. The business environment has been changing with increased economic turmoil and competition. Organisations cannot influence external factors but can only prepare strategies (Osmani & Maliqi, 2012, P. 439). The biggest challenge in organisations is the fear for negative results from performance management. It is not obvious that when the strategy is implemented the organisation will reap positive benefits. This is based on fear of punishment to employees in case the system does not work. If management fails to communicate the intention of the new performance management processes to employees, there may be panic in the team and thus the expected results may not realised. Instead of using it as a performance improvement process for employees through gathering relevant data to business processes, the tool may affect employee motivation and business results.

Operations management comes with business costs that are associated with it. The business needs to restructure its operations, set new goals and operational processes. There may be a need to train employees or take them orientation to understand the role of the whole business process. On the other hand instituting the new system in the organisation will need operational costs that the business has to incur. New costs will affect the profit margins of the organisation or may frustrate some business processes. On the other hand other resources like time are required to apply. Global originations have business units that are spread across the globe; However,, these businesses are not the same and thus have different cost implications. Organisational theorists argue that change is expensive to an organisation since it requires resources to initiate new processes (Koli & Llaci 2005, P. 13). On other hand change is slow to apply within an organisation. To initiate these changes employees many need to be adequately trained to be able to apply the proposed changes in their work routines. These changes may be met with resistance from employees, a factor that may affect the business processes within an organisation.

Performance management processes sometimes do not work well with the existing financial processes in the organisation. Some organisations use financial system record, track, and report financial data on business operations. Organisational performance fails to connect financial data in the organisation with other operational information that is used in decision-making (Cooper 2008, P. 22). This therefore presents a challenge to organisations that are focussed on applying operational management techniques. MNC’s have different subsidiary business units that are found in different places and countries. These subsidiary businesses are designed according to the laws within the country. Sometimes the best performance strategy for the headquarters of an organisation may not work well with a subsidiary branch. Organisations that are managed on an open system have different organisational cultures that apply to each subsidiary business or branch. On the other hand different departments within the organisation have different ways of measuring performance indicators that they achieve. Further there may be a problem in measuring the performance of the main business and the subsidiary business.  Bolden (2006, P. 12) suggests that lack of uniformity in strategies between department and branches leads to different decisions and implementation processes that may be difficult to measure for the whole business. Business has to adopt customised processes to be able to balance the business needs of different branches and subsidiary business units.

Performance management is a system change process and not a situational process. It is a change process that may take long to be realised with the organisation. Performance management entails changing internal business, process and replacing them with strategic ideas that can improve the organisation. These changes take a lot of time to be realised in the organisation since change is a slow process. Therefore decisions that are made by employees based on performance management strategies may be felt in later years. This makes it difficult to measure the impact of performance management due to delayed benefits (Bolden, 2006, P. 151). Businesses have to wait for long to be able to reap the benefits. The nature of the business environment is dynamic and keeps on changing; which means that organisations need to develop clear performance management strategies that have short lifespan to easily realise the results.

The validity of data collected using performance management tools has been questioned on how it applies to the general performance of the organisation. Global organisations use different performance indicators based on the end contribution to the company and employee.  End contribution measures include cash flows, profits and productivity while employee related measurements include dynamism, decisiveness, initiative and judgement. Each of the listed criteria may have different effects on a business and what applies to one business unit may not apply to the other business unit. On the other hand cultural, social and economic environments vary across the globe. These are external factors that may shape the activities of the business within the environment that it operates in. on the other hand political ideologies may affect the business differently since they vary from country to country. This makes the performance criterion that is applied different between businesses (Elzinga  et al., 2009, P. 20). Time and distance variations may also affect business activities since it defines the environment that shapes the business. This affects the use of certain information technology tools for communication since they are affected by time and distance.

Performance management processes fail to address the individual need that affects the organisation. It is based on transforming the organisation through creating effectiveness and efficiencies. However,, the improvement in organisational processes takes place within the individual that is affected by the process. Therefore performance management fails to accomplish individual needs that employees may desire to increase their outcomes (Colville & Millner, 2011, P. 19).  The measures are implemented for the whole organisation and sometimes the implemented process may not be a good strategy but rather a replication of some of the existing processes in the organisation.

Performance management tools have been adopted in organisation as temporary tools rather than permanent business decision-making tools. This is based on the fact that the management tools like reporting templates, performance appraisal and performance management systems like balanced score card, managing for results and stat systems keep on changing. Some methods have decreased in their popularity and others have increased. This means that the performance appraisal methods need to be changed as business processes also change. Business complexity has led to global organisations using a variety of business performance management tools. The tools apply to specific sectors of the business rather than the whole business. The changing nature of the business environment means that performance management tools have to be changed as business processes and complexities keep changing. Performance management has been criticised over the role of all the data collected within the organisation (Boswel & Boudreau, 2000, P. 290). Experts have argued that a lot of data is collected in an organisation but not all of it is used in decision-making.

Conflict between management and employees on how the data collected should be rated most of the time. For example conflict of interest happens when there are disagreements on the rates of the implementation of performance appraisal process. The organisation ahs individual goals and general gaols which form the vision and mission of the organisation. Sometimes the way the performance of the individual is rated against the overall performance of the organisation can be affected by different issues. Colville & Murphy (2006, P. 665) argue that cognitive processes may also affect the collected information since the ratings are based on collecting inform about individuals and not objects. This focuses the appraisal on task factors at the cost of the environment that the employee works in. this means that performance management is result based regardless of the way the environment looks like. The environment determines employee performance and thus global business performance should ensure that the global environmental settings are used in assessing employee performance.

Changing technology has made business to be open and dynamic systems that keep on changing every time. The rise of information technology has had a great impact n organisational decision-making and performance management approaches that the organisation deals with. Businesses are investing a lot of resources on research and development to generate new business model that can improve performance (Caldwell, 2003, P. 289). However,, with information technology, the nature of competition has changed since business processes from information technology are not unique and can be easily replicated. Business competition has changed making organisations to compete using business processes. The advent of technology has led to the need to use quality management to achieve efficiency and effectiveness in business processes. Therefore performance management is shifting from measuring results to measuring efficiency and effectiveness in business processes.

However, to mitigate the challenges of global performance management, organisations need to put in place several strategies that can improve the role. The organisation needs to develop line driven performance measures rather the employee driven measures. Nel, et al. (2001) argues that performance management is implemented and driven by line managers and not human resource personnel. Line managers understand the business processes of the organisation and the areas that need to be improved (Herold, et al., 2008, P. 350). Therefore the organisation needs to enure that line managers are equipped with necesary skills that can be applied to improve organisational processes.

Adequate training needs to be carried out to align employees to business processes. Performance management affects employees directly and thus they need to be adequately trained to meet the needs of the new process. Training ensures that employees understand and can implement the business performance strategies. Further Watkins & Leigh (2012, P. 12) argue that Performance management system problems arise from lack of training and poorly designed performance management system. Training thus empowers to be able to understand the business needs of the organisation and be able to correct system needs. Learning models like the Kolb’s cycle suggest that through taking the employee through the relevant processes, the organisation achieves adequate optimum employee performance. Selden  & Sowa(2011, P. 259) has the opinion the employees belive Performance management is implemented for thewrong reasons and not to improve employee performance. Therefore adequate training will change the perception of the employee towards the management initiative.

Higgs & Rowland (2011, P. 311) states that resistance to change is normal in any business environment. Change is a result of changing the status quo of the organisation and the employees may have difficulty in adjusting to the new system. The most difficult part of implementing performance management is development, implementation and maintenance. Traditional organisational culture is the significant barrier to change since employees may feel threatened. To achieve these organisations need to involve employees in planning for the new performance management tool. Kotter (2007, pp. 13) argues that participatory methods have been highly used in organisations through continuous communication and feedback on the progress of the process. Involving employees ensures that the new strategy being adopted does not send mixed signals to employees. This develops the confidence of all key players that are affected by the new changes.

To improve system processes and employee performance, the new performance management method has to establish a link between the job description of the employee and performance. This ensures that business processes and employee activities are perfectly integrated. Cooper (2008) argues that tasks and key indicator of performance must be included in the employee job description. Aligning of job descriptions and objectives with expected organisational performance standards and time scales should be linked to new systems ensure that achievements of the employee contribute to the overall business needs of the organisation. Further, Sulin (2008, P. 5) adds that good management systems that link employee description to performance management maintain of a view of th current expectations and accountability of the individual.

Performance management requires adequate time to implement the strategies in a business and thus the organisation needs to start introducing the process slowly. This will ensure that low system resistance is raised in the organisation. This means that the new system has to run hand in hand with the old system to allow employees adequate time to adjust to the new system. This is the best way for dealing with resistance to change. Once employees have realised that the new system can work better than the old system they will start getting used to the performance management patterns that are related with it (Kotter, 1995, P. 61).

Lastly leadership is the overall solution to organisational challenges that may face the new performance management program. The role that the leader lays in an organisation influences the level of employee uptake to change. The dynamic nature of the business environment that global organisations operate in determines transformation of business processes to align them with strategic goals in the market. Higgs & Rowland (2005, P. 123) states that change requires creating the new system and instituting the approaches ino the oragnisation. Organisational leaders influence their subordinates to adopt proposed business strategies for transforming the organisation. To influence others, the leader takes responsibility by taking the responsibility for transformation before others can follow. This means that the leader plays a bigger role in the general performance of the organisation in meeting new business needs. Transformations can be complex, radical, complex, non-linear, full of uncertainty, open-ended or lead to paradigm shifts within the organisation (Nixon, 2003, p. 166; (McNaughton, 2003, P. 135). The effects of a change process have to be leader led through involving all employees.the changes are initiated with an extra income that is used to design and implement the process but organisations must be willing to meet these costs since the new changes have an economic angle to the business.

Conclusion

The business environment is changing rapidly making many organisations to lack right strategies to respond to the challenges that they face. Employee are the pillars of a sustainable business and thus successful businesses have focussed their performance management tools to employees and provided adequate resources to enable employees meet their objectives. Through continuous training employee can acquire strategic skills needed to run the organisation. Sulin (2008, P. 8) refers to a survey which shows that 44% of most companies with performance management systems replace their systems averagely after every 3-4 years. This is determined by the changing business environment and market dynamics that the organisation faces. Therefore the organisation needs to periodically monitor the system and revise parts of it to ensure that new business develoents are added rather than replacing the whole system. This ensures that the business maintains the best practises from the previous system and remove portions that may not be working well. Businesses should, therefore, adopt update rather than replace strategies. Organisations need to carefully consider the performance management strategies that can be implemented. Rooke & Torbert (2005, p. 68) states that employees need to be involved through consultation and feedback to be able to understand the process and minimise resistance challenges of the new management system. Further employees may not always resist but without proper research through collecting enough relevant data about the organisation, the new Performance management system may not reflect the needs of the organisation. Therefore from a systems approach, the organisation is like an organism that has different parts that are consulted during movement. Management should adopt a system approach to ensure that every part of the organisation is consulted to design a system that reflects the real need of the organisation.

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