Performance Management Strategy

Abstract

Organizations that seek to increase their competitive advantage as a tool for growing into the global markets need to assess their performance strategies. From the context of the position of the vice president of for a global learning organization, this paper presents a proposal to the CEO of the organization on the effective global performance management system strategy. The strategy focuses on employment of employees as a source of competitive advantage through fostering their engagement with organizational goals, aims, and objectives. This strategy is argued as having the capacity to increase the effectiveness of the organization and hence its performance.

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Introduction

Performance management is an essential tool for evaluating the capacity of an organization to succeed in the long term. In this proposal, the writer takes the position of a vice president for a large global learning organization that is expanding its multinational operations. It is assumed a plan indicates that the workforce for the global learning organization is projected to increase by 20% in the next five years. Currently, there is no uniform performance management system within the organization. Consequently, managers within different channels of the company create their own “rules” when it comes to leadership development and performance feedback.

Based on the above hypothetical assumptions, this paper presents a proposal to the CEO of the global learning organization suggesting an effective global performance management system strategy. The strategy incorporates several elements including

succession planning, performance feedback model, and valuable compensation model (Rosemary et al., 2006). The model addresses how employees will be rewarded for expected behavior and/or performance improvement. Details are provided for how an account for generational and cross-cultural differences when implementing the system will be addressed. A discussion on how the proposed strategies support organizational development and effectiveness is also considered. Finally, the paper sums up by explaining the measurement of success of the overall system.

Global performance management system strategy

People are important resources available to an organization. They are used by our global learning organization to enhance its success in terms of delivering value to our stakeholders. The organization has a projected growth of employees in the range of 20 percent in the next five years. It implies that there will be an increased responsibility to develop and ensure uniformity in the measurement of the performance of employees in terms of their contribution to enhancing the realization of our organization’s goals, aims, and objectives (Rosemary et al., 2006; Bourne, 2003).

Thus, it is important to harness and harmonize performance management approaches deployed by different channel managers. In our organization, these approaches are currently disintegrated based on different rules created by different managers in different channels of the organization.

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Having more employees indicates that our organization will have even more diverse workforce. Hence, cultural, training, and experience differences can be used as tools for gaining competitive advantage by increasing the effectiveness and efficiency of our organization (Turnbull et al., 2009). The goal of any global management strategy is to increase the outputs and consumption of organization’s products on global platforms (Ariyachandra & Frolick, 2008). This requires consistency in organizational quality through enhancement of total quality management strategies deployed by our organization. This being the main goal of our organization, it is crucial for efforts to be made to enhance homogeneous employee engagement and assessment approaches across all channels of the organization.

Employee engagement assessment

Organizations, which have uniform systems of engagement of employees, stand better chances of outperforming their competitors. Tucker, Thorne, and Gurd (2009) support this argument by further informing, “It is great when companies try to improve employees’ engagement and even better when they measure it” (p.141). This assertion implies that assessment of the capacity of an organization to engage its employees begins with the derivation of an appropriate scale for engagement measurement. This helps in determining the required actions, which are missing or are inconsistent within different channels of an organization to promote homogeneous strategies for engagement of the organizational employees (Tucker, Thorne & Gurd, 2009).

For the global learning organization, I propose utilization of Q12 employee engagement assessment approach. All channel managers should implement it as the global standard for measuring the engagement of employees in the organization (Smith, 2009). This approach aims at “uncovering the things that really matter to employee engagement and business performance” (Bierbusse & Siesfeld, 2007, p. 9).

As argued in the previous section, the proposed performance management strategy is aimed at unifying the diversity of the organization’s employees to create a homogeneous organizational culture. This helps in the elimination of frictions associated with the diverse employees (Turnbull et al., 2009). From the context of Q12, the assessment strategy focuses on nine main elements, which must be evaluated by all channel managers to determine whether employees under them comply with the best practices.

Measuring the above aspects is important in the assessment of the performance of the organization. When employees are better engaged, they consider themselves as part of the owners of the organization. Hence, incidences of “absenteeism, quality defects, shrinkage or theft, high turnover, and poor incidents of patient safety decrease while productivity, profitability, safety, and positive customer ratings of a company increase” (Devinney et al., 2009; Gruman, & Saks, 2010). Even though this approach may help to reveal the degree to which employees are engaged with an organization, understanding the roles of leadership in driving the success of an organization is crucial. Poor leadership leads to poor engagement of employees. This underlines the significance of addressing issues of leadership development for our global learning organization.

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Leadership development

The fact that our global learning organization is lead by managers who deploy different non-homogenous managerial approaches imply that the development of transformational leadership is vital. The purpose of leadership in any organization is to avail new ideas and innovation. It also ensures that people abide by values that encourage the growth of an organization through integration of organizational behavior.

Essentially, leadership plays four main functions within an organization. These are leading, directing, planning, and organizing (Hogan & Hogan, 2008). Deployment of different rules by different managers to manage employees working under them showcases that the global organization aims at driving its business by allowing managers to deploy managerial techniques, which they believe are well experienced. Such techniques are meant to force compliance (Hogan & Hogan, 2008).

As the number of employees continues to increase over the next five years, it will be incredibly difficult to force compliance since deviant behavior increases as workforce under management of one manager increases (Henri, 2007). What is then required is a form of influencing employees but not compelling them. Such a change in the context of a global learning organization defines the differences between the current work of management in our organization and work of transformational leadership. While the managers strive to compel, leaders struggle to influence in the effort to make things done their way. As our organization continues to grow globally, development of leadership that is capable of withstanding global organizational operations dynamics is incredibly important.

In developing global leadership skills, people must have accomplished various achievements. One of these achievements is the ability to expand small business establishments into global platforms with the intention of increasing profit margins earned by an organization. In fact, this profit is the main pillar on which the performance of an organization is anchored (Dilhani, Arachchilage & Smith, 2013). This goal cannot be achieved without accountability of employees and the development of unconditional commitment of organizational employees to the missions, goals, and objectives of the global learning organization.

As argued before, this outcome is the chief concern of putting efforts to increase the engagement of employees. Becoming a global leader also requires one to have highlighted good leadership approaches, which can be used as benchmarks by other organizations. This includes the embracing of incredible motivational skills, which can realize immense results in the productivity of a global organization. Consequently, such leadership can be deployed by organizations seeking to gain large growth through the utilization of employees as sources of competitive advantage such as our global learning organization.

Succession planning

The global learning organization needs to focus on a succession plan that does not principally serve the functions of getting new leaders who will fit new positions or other positions. Rather, it should focus on the creation of a succession plan that aims at supplying managerial together with leadership talent desired at various levels of an organization. This focus is crucial in ensuring long-term performance of any global organization (Goldsmith, 2009; Armstrong, 2009).

The foundation of the succession plan for global learning organization is based on the need to develop experience, which is accomplished by identifying the necessary experiences required to fill positions that are critical for increased performance of the organization in the global platforms. According to Goldsmith (2009), failure to do this hinders an organization from attaining its business objectives since talented and experienced managers and leaders act as the vision careers on the desired success levels of the organization (p.214). This calls for identification of the capabilities of people. Such an effort helps in the development of succession plans and in the setting of the performance anticipations, which are critical in the establishment of the mechanisms of assessing performance.

After the identification of the necessary positions and profiling of the key competences, it becomes crucial to develop requisite managerial strategies to enhance succession. For the global learning organization, they include the human resource management strategies among them being the mechanisms of developing an internal pool for talent development, recruitment, and training. Another important aspect of succession plan is the documentation of various succession plans. This helps in the definition of responsibilities coupled with the provision of a clear definition of timelines for their attainment. Lastly, focus on the effectiveness of the succession plan is crucial since it aids in the monitoring of various activities related to the employees being developed, managing employees data, and where necessary making vital adjustments to the developed plans.

Performance feedback model

Any management process must possess a mechanism of providing feedback to the developed strategies for success. In the words of Devinney et al., “organizational performance is the most important criterion in evaluating organizations, their actions, and environments” (2009, p.827). The authors further suggest that organization’s performance feedback can be provided by evaluating the financial performance upon the implementation of a strategy of performance improvement. This includes a return on organizational investments, changes in organizational assets, and evaluation of changes in the profitability of an organization (Patima, 2003; Bento, 2006).

Feedback on performance management approaches can also be evaluated from the context of the increment on the market share of an organization, changes in sales level, and even changes in the shareholder returns in the form of the increase in the magnitudes of dividends.

All the above indicators of the success of performance management strategy can be captured through a balanced scorecard (Patima, 2003). The strategy deployed for enhancing success through alteration of managerial approaches to promote engagement of employees. This way ensures that cross-cultural differences of employees associated with differences in the diversity of employees are cutely managed to enhance global growth of the organization. Therefore, changes in scorecards are due to the strategy. In this extent, the scorecard provides the required feedback of a performance management model.

Compensation model

During the recruitment, considerations of the available resources to pay a given employee a certain amount of benefits and compensation that are considered maximum offer by an organization are important. In fact, consideration of the wages and/or salaries that an employee of a given professional caliber would be willing to take as a start up salary is necessary. It forms the basis of determining the possible future mechanism of enhancing performance and motivation of the employee.

In this context, Brockbank (2010) argues that, via psychometric evaluation of the person being recruited, organizations are able to identify persons who will fit into an organization. Fitting into an organization implies recruitment of a person who would work to deliver his or her job requirements when paid according to the benefits and compensation packages offered by the global learning organization.

Rewarding for expected behavior and or performance improvement

Apart from rewarding people from the basis of the set payment package within the global learning organization, it is crucial to develop a reward package for the anticipated behavior and performance improvement of employees. Anticipated behavior here means any performance that is beyond standard while working under normal working conditions and within the normal timelines. Such an achievement implies added competitive advantage to the organization (Smith, 2009). Hence, employees must feel that their efforts are recognized and appreciated through an increase in pay, promotion, and delegation of responsibilities.

Accounting for generational and cross-cultural differences

Accounting for generational and cross- cultural difference is pegged on the models for dealing with employees’ conflicts arising from cultural differences. A model that would work for the global learning organization is Thomas-Kilmann’s model. According to Thomas-Kilmann, conflicts can be handled using five main styles: accommodating, avoiding, collaborating, competing, and compromising. The interaction of these five techniques is shown in fig. 1 below.

Thomas-Kilmann’s five techniques for handling conflicts within an organization.
Fig.1: Thomas-Kilmann’s five techniques for handling conflicts within an organization.

Accommodation involves the decision by an organization to cooperate with parties in conflict in the highest possible degree. Alternatively, one may choose to ignore the need to resolve a given conflict. This approach entails resolution of conflicts via avoiding. However, avoiding is not an effective strategy in the long-term. Collaboration encompasses partnering with another party to pursue goals for each party.

During collaboration, effort is made to accommodate all people’s ideas and synthesizing them in the attempt to develop a single superior idea for resolution of a conflict. Such an idea also needs to take into consideration all points of agreements and disagreements between the collaborating parties (Hill, 2007; Jarrat, & Katsikeas, 2009). This way, it becomes possible to break away from the win-lose strategy to explore the win-win strategy. The approach is opposed to the competing technique in which the focus is on the win-lose approach to conflict resolution. Competing approach works well in times of dare need to make quick decisions. In case of compromising, parties in conflict focus on the lose-lose strategy.

Organizational development and organizational effectiveness

Organizational development may be accomplished in various ways. For the global learning organization, the preferred mechanism is through increasing productivity by proactively involving people in the success of the organization through engagement.

According to Dilhani, Arachchilage, and Smith (2013), this approach requires “rigorous management of individual performance and implementation of strategic performance management system that is fully supported by leadership teams” (p.23). Increasing resource availability to an organization means increasing the output capacity. As the global learning organization increases its employees within the next five years, if such a move is effective for the performance of the organization, the productivity measured in terms of the output capacity of the organization should increase (Heslin, Carson, & Vandewalle, 2008).

Since the productivity of employees cannot by optimized using economic theories, mechanisms of motivation of employees are essential to ensure that the organization’s effectiveness increases over the next five years. Changes in effectiveness can be measured by comparing the current ratio of the output capacity of the organization to the number of employees to a similar ratio as the number of employees rises on a yearly basis over the next five years (Becker, & Gerhart, 1996). In case this ratio increases with time, the organization is capable of gaining better performance. This reflects the capacity to use people as a source of competitive advantage.

Measuring the success of the overall system

Without deployment of common standards in different organizational channels, probabilities exist that an organization may use wrong logical basis for taking action (Smith, 2009). Authors such as Sales (2013) support this line of thought by claiming, “most companies understand this to some degree, but many persist in measuring performance by the wrong standard — using unsubstantiated or ineffective metrics that ultimately lead nowhere” (p.17). For the global learning organization, the overall system performance is evaluated from the context of Q12 .Using the model to measure engagement creates confidence in the organization that deploys employees’ engagement measurement methodology backed by immense empirical evidence (Jarrat, & Katsikeas, 2009).

Conclusion

Performance management is an essential tool for an organization seeking to develop a work environment in which all people are given an opportunity to perform their obligations in the most possible way that measures up to their abilities and potential. Performance management is a continuous activity, which initiates upon employment of people, and ends when employees depart from an organization. It is particularly important for an organization seeking to unify its diverse and extensive employees’ population such as an organization to expand to multinational operations such as our global learning organization.

Reference List

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