Management of Performance

A performance management framework is a critical method of talent management because it guarantees that corporate priorities and expectations are met. It allows the organization's human resource managers to have the dedication and capacity to execute their duties efficiently in order to meet the organization's goals. Performance assessment practices are used by organizations to coordinate their tools and processes with their strategic goals (Kinicki & Williams 2008). Steel Company is having difficulty handling workforce morale due to financial problems. The corporation instituted a salary cap, which has led workers to lose faith in the company. Furthermore, the owner-managers autocratic leadership style has resulted in employees’ dissatisfaction and lack of commitment to the company. The Divisional Manager’s attempt to implement a performance management system for the ‘Works’ department has failed to improve the employees’ performance.

This report highlights the current performance management approach in the company, and the recommended performance management system that will improve employees’ commitment and performance in the company. The report also identifies, assesses and evaluates performance objectives at both individual and team level. Lastly, the report will identify the barriers that may affect the implementation of the new performance management system.

The Current Performance Management Systems

The current performance management system of Steel Company is characterized by team-based working, improved communication mechanisms, and bonus schemes. The divisional manager introduced four teams with various roles and a leader. The importance of teamwork is that it allows the team members to bring ideas together and motivate each other to accomplish the goals of each task. The teams would also allow the manager to communicate the goals of the company more effectively and implement flexible and responsive management control. The problem encountered is lack of teamwork training, which would allow employees to understand the dynamics of teamwork and how to work as team members to achieve group goals and objectives (Elnaga and Imran 2013). Furthermore, the team members were not allowed to make their choices regarding team leadership and team activities.

The divisional manager also developed a bonus scheme in which performance was linked to bonus payment. In this case, if an employee achieves his or her production targets, he is paid a bonus. Production targets were developed and communicated by the divisional director to show the production requirements of the company. The production targets are posted weekly on the notice board against performance levels of each team every week. The Divisional Director also developed a Staff forum for employees to raise issues affecting them at the workplace and provide suggestions for improvement.

Despite these changes, the attitudes and culture of the employees did not change according to the expectations of the Divisional Director. The works remained fairly the same without improvement of quality and productivity. The employees suggested that the bonus provided through the new performance management system does not improve their lives. The firm’s operations also remained the same despite efforts to improve communication and performance requirements. This failure can be attributed to the lack of proper planning, training, and monitoring and evaluation. Therefore, there is need to improve performance through new performance management system that meets the needs of employees. The individual needs of employees should be linked to the performance requirements and goals of the company.

The Proposed New Performance Management System

The new performance management system should be a company-wide attempt to plan, execute, monitor and evaluate employees’ performance against set standards in the company. The performance management system should be communicated with the top management. In the case of Steel Company, the owner-manager should be part of the change process. Alternatively, the Division Director may be chosen as the performance manager across the entire company. During performance planning, the manager should engage employees in identifying and clarifying expectations (Kazimoto 2016). An effective plan should also include methods of measuring results and agreeing on monitoring approaches. The manager should also monitor and evaluate the progress of each employee based on the expectations and standards agreed upon. A corrective action is then implemented if the performance is not up to the standard required.

The company’s management should also identify the job description of each employee and determine whether it reflects the current tasks of the employee. The job description should also be linked to the employee’s work plan and organization’s strategic goals and objectives (Bourne 2000). The employees’ work plan should also be developed to match their career goals and the standards to be used when measuring results. Once the job description and performance standards have been established, the company should use appropriate methods to improve employees’ commitment and performance in the workplace. Some of the ways of improving performance include: recognition of achievement, providing feedback, employee involvement, training and development, rewards and effective communication.

Employee motivation is one of the most important ways of improving employees’ performance. It involves improving employees’ attitudes and interests in their jobs. According to the Herzberg’s two-factor theory of motivation, there are two classifications of factors that improve job performance. Herzberg suggested that employees are not satisfied with the achievement of their basic needs at work. This suggestion is reflected in Steel Company because the company’s employees were not satisfied with the bonus they were given as a motivation for performance improvement.

The two factors that should be met by the organization to improve employees’ motivation are: motivators and hygiene factors. Motivators include involvement in decision making, responsibility, recognition of achievement, personal growth, training and development and sense of importance (Miner 2007). These intrinsic factors give employees job satisfaction because they improve the conditions of the job. Hygiene factors include status, salary, benefits, good pay, holidays, and job security which do not give positive satisfaction; but their absence cause dissatisfaction. It is clear that the Steel Company’s employees are dissatisfied because the hygiene factors (salary) are not sufficient. To improve performance in the company, the managers should implement a combination of intrinsic and extrinsic factors of motivation. The company is facing employee complaints due to low compensation and poor work conditions.

The company’s management should involve employees’ in decision making to make them feel a sense of belonging. They should feel that they have a role and responsibility to play in improving the company. If their salary is increased, the company makes losses. If they continue earning little salary, they will continue complaining and lacking motivation. Therefore, the managers should involve them and be concerned with their needs to ensure that they understand the situation of the company and participate in improving it. The Divisional Director may meet employees regularly and discuss the situation of the company and possible ways of improving productivity to improve both employees’ needs and the company’s strategic needs. The managers should also engage in a two-way communication with the employees, and provide positive and constructive feedback to improve employees’ performance.

Training and development is also essential for improving the employees’ job performance to meet the company’s expectations while at the same time enhancing personal career growth for the employees (Colarelli & Montei 1996). It is important to align the employees’ intrinsic needs for personal growth to the organization’s strategic goals through training and development (Hassan 2014). The employees should be trained to work effectively in teams, communicate effectively with customers and other employees, and develop important skills needed for the improvement of job performance and overall organizational productivity.

The employees should also be recognized for their performance and given opportunities for improvement (Fisher 2015). In the current state, employees of Steel Company lack the motivation to improve performance on the tasks because the salary is low and work conditions have not improved. Although the bonus has been implemented, it is not enough to meet the needs of employees. Therefore, the employees should be given something to be happy about. Recognition of their achievements and constant positive feedback motivate them because they see that the company is concerned with them (Tse, 2007). The employees need to feel a sense of belonging. They should feel at home in the organization, where the management listens to them. In this regard, the owner-manager should work with the divisional manager to create a positive work environment for employees where they can realize their full potential and feel motivated to work.

Performance Objectives

As part of the performance management, the HR managers are required to identify performance objectives and measurements or indicators of success. The Steel Company managers should identify objectives that fully represent the various duties and responsibilities of employees. The objectives should be SMART – specific, measurable, attainable, realistic, and time-bound. They should be specific to show clearly what needs to be done, when it should be done, and who should do it. Measures of quantity, quality, time and cost should also be used to ensure that the objectives are measurable (Pride 2017). The objectives should also be attainable in the sense that they should have reasonable and achievable chances of success. They should also be realistic by reflecting the experiences and capability of employees. Lastly, time-bound objectives provide the time period that the objectives are to be achieved.

On an individual level, employees of Steel Company should improve their skills on the task so that they can complete their tasks effectively within the time specified for the task. This objective is necessary to ensure that the employees have mastered the art of performing their tasks (Kamoche and Mueller 1998). They can be trained to develop skills necessary to achieve this objective. The objective can also be achieved through experience by employees. The successful completion of a task within the stipulated time is essential for the improvement of job performance and achievement of the organization’s goals and objectives.

The second objective is to improve employees’ motivation, commitment and work engagement within their employment period. In this case, the employees should perform their tasks everyday with a high level of motivation and commitment. This objective ensures that employees have the right attitude to put all their efforts on the task; hence improving work performance (Nawaz et al 2014). This motivation and commitment can be achieved through intrinsic and extrinsic motivation factors such as salary, rewards, recognition, training and development. Furthermore, company should focus on improving personal growth of employees to improve their motivation and improve their work performance.

On a team level, the organization’s objective is to improve team performance on every team task. The teams formed by the Divisional Director should have the objective of improving performance every time they meet. In this regard, team members are will play their individual roles effectively to improve the overall results of the team. Furthermore, team performance can be improved through collective responsibility (Hiriyappa 2009). The team members should work together in a well coordinated manner to achieve the team objectives.

Another team objective is to improve work relations and minimize conflicts among team members. As teams work collaboratively, they should be objective in their relationships so that they do not contradict each other. They should avoid bias and subjective decisions that may cause disagreements and conflicts.

Barriers to the Implementation of this Performance Management System

There are several challenges affecting the effectiveness of this performance management system. The effectiveness of performance management systems depends on the ability of managers to plan, monitor, evaluate and review the system effectively (Neely 1998). Some of the barriers to performance management system include: lack of alignment, inappropriate measurements, lack of management support, and poor leadership style.

In order to achieve effective implementation of performance management, the individual performance of employees should be linked with the departmental and organizational needs (Walia 2014). If the needs of individuals are not met, the departmental and organizational goals may not be achieved. The strategy development should also be aligned with budgeting and operational planning to ensure that the strategic objectives are attainable. In this regard, lack of alignment between the needs and goals of different levels of the organization may cause poor performance management outcomes.

The leadership style may also affect the effectiveness of the performance management. An autocratic style of leadership may hinder the involvement of employees in decision making of the organization. In this regard, the employees lack motivation to perform their tasks effectively. If the manager tries to impose decisions and activities on employees, the work environment becomes inappropriate for the employees to improve. A good leadership style should allow employees to give their input in the management of activities in the organization, leading to motivation, commitment, and improved performance.

The effectiveness of performance management implementation may also be curtailed by inappropriate measurement standards. The targets set by the management should be accompanied by appropriate measures that employees are able to attain. If the measure used is not appropriate, the employees may not achieve the targets. For example, if the employees have a target to improve customer satisfaction, there should be appropriate measures of customer satisfaction (Siddiqi 2015). If the measures of customer satisfaction are inappropriate, the employees may not achieve it.

Conclusion

This report has highlighted the performance management approach that is necessary to improve performance in Steel Company. The company is currently using bonus, teamwork and effective communication to achieve improved performance. However, this system has failed to achieve success. To improve the employees’ performance, this report has suggested that the company should focus on motivation factors as a way of improving performance. The use of intrinsic and extrinsic factors should be combined to improve performance of employees. The company should provide incentives, recognition, personal growth, training and development, and involvement of employees to improve their sense of belonging and motivate them to improve their work engagement and job performance.

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