A STUDY ON IMPACT OF PERFORMANCE MANAGEMENT SYSTEM ON EMPLOYEE PERFORMANCE WITH SPECIFIC REFERENCE TO TECH MAHINDRA, HYDERABAD

Transcription

1 International Journal of Mechanical Engineering and Technology (IJMET) Volume 9, Issue 10, October 2018, pp , Article ID: IJMET_09_10_010 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed A STUDY ON IMPACT OF PERFORMANCE MANAGEMENT SYSTEM ON EMPLOYEE PERFORMANCE WITH SPECIFIC REFERENCE TO TECH MAHINDRA, HYDERABAD Ravi Chandra G Research Scholar, Koneru Lakshmana Education Foundation, Vaddeswaram, Guntur, Andhra Pradesh, India Dr. A. B. Saraswathi Assistant Professor, Koneru Lakshmaiah Education Foundation, Vaddeswaram, Guntur, Andhra Pradesh, India ABSTRACT The Information Technology (IT) plays an important role in the underpinning of a country s economy. This study is aimed at getting a clearer view of the impact of Performance Management System on the Employees Performance with specific reference to Tech-Mahindra, Hyderabad. The main concerns are the various phases of Performance Management System, how they contribute to the overall performance of the employees. A structured questionnaire was developed and all the levels of employees were covered to collect the data with a sample size of 402 of Tech Mahindra, Hyderabad. Data was analysed through correlation and multiple regression using SPSS software and results were significant. The overall impact of Performance Management System on Employee Performance is at the positive level. Hence, this research was mainly undertaken to investigate on the significance of the various sub variables of each phase of Performance Management System such as outlining development plans,setting objectives, assess against objectives, feedback, coaching, document reviews, personal development, link to pay on Employee Performance. This paper presents a comprehensive diagnosis of Performance Management System indices of Tech-Mahindra, Hyderabad, the factors that are to be improved were suggested there upon. Keywords: Information Technology, Performance Management System, Employee Performance, Feedback, Coaching. Cite this Article: Ravi Chandra G and Dr. A. B. Saraswathi, A Study on Impact of Performance Management System on Employee Performance with Specific Reference to Tech Mahindra, Hyderabad, International Journal of Mechanical Engineering and Technology, 9(10), 2018, pp editor@iaeme.com

2 A Study on Impact of Performance Management System on Employee Performance with Specific Reference to Tech Mahindra, Hyderabad 1. INTRODUCTION Performance Management System (PMS) provides an opportunity for the employees to understand the organizational goals and objectives and contribute towards realizing the same by effective and efficient performance. Thus, PMS enables every employee of the organization to participate i.e. the strategic business planning/ implementing process in determined timelines, by demonstrating their knowledge, strengths and competencies. The purpose of PMS process is to define, set, monitor, coach and improve people performance in an organization. It also aims to drive results, build capacity, crave up consequences, and align the behaviour of its human resources in line with the organization s core values, goals and strategy. Performance Management initiative is intended to drive the achievement of key business results. Thus, Performance Management System is designed and fielded across the organization to create framework for the accomplishment of organizational, divisional, departmental and individual goals. An effective Performance Management process establishes the groundwork for excellence by linking individual employee objectives with the organization s mission and strategic plans or outcomes (Drewitt, 2013). The employee has a clear concept on how they contribute to the achievement the overall business objective. Supervisors need to conduct regular discussions throughout the performance cycle which include coaching, mentoring, feedback and assessment (Lee, 2006) Performance appraisal properly describes a process of judging past performance and not measuring that performance against clear and agreed objectives. Performance Management shifts the focus away from just an annual event to an on-going process (Bruce, 2014) Therefore, the focus of this study is focussed on employees cognitions of the performance management system used by Tech Mahindra to find out how employees see, make sense of and interpret their everyday experiences with such a system and its values to Tech Mahindra, Hyderabad with the aim of developing a suitable improved Performance Management System. The research is quantified in it s nature with a sample size of 402 covering all the employment categories in Tech Mahindra, Hyderabad. The respective data is analysed with descriptive statistics, chi-square and multiple regression. And the respective results are interpreted and the conclusion is drawn based on the data analysis. 2. PURPOSE OF THE STUDY The purpose of this study was to investigate the impact of performance management system on employee performance in Tech Mahindra, Hyderabad Background of the study The Performance appraisal in practice though is a traditional one, started in early 20 th century by Tylor. Appraisal was used to decide whether or not the salary or wage of an individual employee was justified. As a result, the traditional emphasis on reward outcomes was progressively rejected (Clardy, 2013). Performance appraisal or performance review is a process for individual employees and those concerned with their performance, typically line managers, to engage in a dialogue about their performance and development and the support they need in their role. It is used to both assess recent performance and focus on future objectives, opportunities and resources needed editor@iaeme.com

3 Ravi Chandra G and Dr. A. B. Saraswathi While performance appraisal is an important part of performance management, in itself it is not performance management: rather, it is one of a range of tools that can be used to manage performance (Greenberg & Haviland,2008). Performance management is a holistic process bringing together many activities that collectively contribute to the effective management of individuals and teams in order to achieve high levels of organizational performance. The process is strategic, in that it is about broader issues and long-term goals, and integrated in that it links various aspects of the business, people management, individuals and teams (Julnes, 2008) Today s organizations implement recognition programs to bring out cultural change. They create budgets for employee incentives in the attempt to win their loyalty. Performance management is a strategic approach to delivering successful results in organizations. This is done through improving performance and developing talents as well as building capacity of staff. Performance Management is supposed to be a continuous process between supervisors and employees. This is important as it helps to review the previous findings and encourage gradual improvement (Bruce, 2014). For a management system to be effective, employees must believe that they have an opportunity for meaningful input into the appraisal process (Berry, 2004). They should have the freedom to challenge the evaluation they get especially when it s contrary to how the appraise themselves. It is important to allow employees to share their opinion in order to encourage fairness in the appraisal procedure. When this is adhered to, staff members will agree with the management system that has been put in place as a legitimate and productive way of accessing their performance. As noted by (Cooper, 2005) without the perception of fairness, a system that is designed to appraise, reward, motivate, and develop can actually the opposite effect and create frustration and resentment. The organization should set up clear performance expectations to be communicated to employees. The expectations include results, actions and employee behaviors. Employees will then understand what output is required from them when their terms of reference are clearly stipulated. It also helps to set out standards and outcomes. According to Aguinis, (2009), continuous communication between supervisors and the employees helps to diagnose problems as and when they arise as well as taking remedial actions. With a view to meet the above results and to find out the impact of performance Management System on Employee Performance the present research study has been chosen Problem Statement Based on the above discussion the study aims to identify the impact of all the three phases of performance management system on employee performance in Tech Mahindra, Hyderabad. 3. OBJECTIVES OF THE STUDY To analyse the impact of Developing & Planning performance phase of Performance Management System on Employee Performance in Tech Mahindra, Hyderabad. To analyse the impact of Managing & Reviewing performance phase of Performance Management System on Employee Performance. To analyse the impact of Rewarding Performance phase of Performance Management System on Employee Performance. To examine the overall impact of all the 3 phases of PMS on Employee Performance of Tech Mahindra, Hyderabad editor@iaeme.com

4 A Study on Impact of Performance Management System on Employee Performance with Specific Reference to Tech Mahindra, Hyderabad To suggest measures /Recommendations for improving the Employee Performance levels through Performance Management System. 4. RESEARCH QUESTIONS 1. How does the Developing & Planning performance phase of Performance Management System influences the Employee Performance in Tech Mahindra, Hyderabad 2. How does the Managing and Reviewing performance phase of Performance Management System influences the Employee Performance?. 3. How does Rewarding Performance phase of Performance Management System influences the Employee Performance? 4. How Performance Management Systems help in improving Employee s Performance? 5. SCOPE OF THE STUDY The scope of this study was limited to the study of performance management systems and how they influence the performance of employees of Tech Mahindra, Hyderabad. This study concentrated on the following key areas; Developing and planning performance, Managing and reviewing performance and Rewarding performance Theoretical Frame work The elements of performance management system cycle include: Setting of objectives, measuring the performance, feedback of performance results, reward system based on performance outcomes and amendments to objectives and activities (Mabey et al, 1999) The stages of Performance Management System According to Schneider, Beatty and Baird (1987), A Performance Management System is classified into a development, planning, managing, reviewing and rewarding phase Employee Performance In the organizational context, performance is usually defined as the extent to which an organizational member contributes to achieving the goals of the organization. Employees are editor@iaeme.com

5 Ravi Chandra G and Dr. A. B. Saraswathi a primary source of competitive advantage in service-oriented organizations (Luthans and Stajkovic, 1999, Pfeiffer, 1994). In addition, a commitment performance approach views employees as resources or assets, and values their voice. Employee performance plays an important role for organizational performance. Employee performance is originally what an employee does or does not do. Performance of an employee could include: quantity of output, quality of output, timeliness of output, presence at work, cooperativeness (Gungor, 2011). Macky and Johnson pointed out that improved individual employee performance could improve organizational performance as well. From Deadrick and Gardener`s (1997) points employee performance could be defined as the records of outcomes archived, for each job function, during a specified period of time. If viewed this way, performance is represented as a distribution of outcomes achieved and performance. Source: Schneider and Baird (1987) 5.4. Developing and planning performance The Performance and Development Planning process is designed to help all employees to understand the importance of the work they perform. Specifically, the developing and performance planning helps employees determine where to focus their efforts so that high value results are obtained ones that move the organization forward to meet its goals. This phase also supports the development of stronger working relationships by providing some guidance on how the values of Tech Mahindra can be integrated into the working day. By looking at the goals of the organization, the priorities in every department and the work, it becomes easier to make the connections between employees work Managing and reviewing performance Refers to the annual formal process of reviewing and documenting employee performance. It is an on-going process where employees and supervisors can work together to: Identify and describe work expectations; Develop goals and plans to guide the work of the employee; Discuss learning and development needs; Recognize achievements; and Plan for future individual and organizational growth and development editor@iaeme.com

6 A Study on Impact of Performance Management System on Employee Performance with Specific Reference to Tech Mahindra, Hyderabad All employees participate in the managing and reviewing performance process with their supervisor. The timing of the process is integrated with the Work Unit's annual planning cycle Rewarding Performance A form of additional compensation paid to an employee or department as a reward for achieving specific goals or hitting predetermined targets. A performance reward is compensation beyond normal wages and is typically awarded after a performance appraisal and analysis of projects completed by the employee over a specific period of time. Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization. 6. HYPOTHESIS FRAMING Keeping in view of the objectives of this study the following hypothesis has been established. H1 0 : There is no significant impact of Developing and Planning phase of Performance Management System on Employee performance H2 0 : There is no significant impact of Managing and Reviewing Performance phase of Performance Management System on Employee performance. H3 0 : There is no significant impact of Rewarding Performance phase of Performance Management System on Employee performance. H4 0 : There is no significant impact of all the 3 phases of Performance Management System on Employee performance. 7. RESEARCH METHODOLOGY 7.1. Research Design Research design employed a case study design to assess the impact of performance management systems on employee performance. Performance management system is the main independent variable upon which employee performance is dependent. The analysis of data was done separately and merged at the point of interpretation, to obtain a complete understanding of the research problem Population of the study The study involved 402 respondents selected from a total population of around 17,000 employees of Tech Mahindra, Hyderabad as of This sample size has been selected given the limited time and financial constraints of this study. By using a case study design findings were representative of the populations from which the sample was drawn but was expected to have limited external validity (Generalization). All the levels of employees were included in the sample Sampling Techniques The study used purposive sampling. A sample of 402 employees from all the levels was selected to present the entire employees of Tech Mahindra, Hyderabad editor@iaeme.com

7 Ravi Chandra G and Dr. A. B. Saraswathi 7.4. Data collection Methods The study used multiple sources of data to get broad view about employee performance and performance management systems. Data was collected through primary and secondary data collection methods. Over 4 weeks the data was collected. The responses were measured through Likert five point scale; 1 = Strongly Disagree (SD), 2 = Disagree (D), 3 = Neither Disagree nor Agree (N), 4 = Agree (A), 5 = Strongly Agree (SA) Data collection tools A structured Questionnaire was administered to 402 respondents, Reliability and Validity of data was tested prior to the actual data collection Data Analysis Method In order to measure the relation between variables (dependent and independent) multiple regression and correlation were applied. Descriptively the data was both analyzed and tabulated. Firstly, the correlation model was applied to the Independent variables and then multiple regression was applied to check the impact on dependent variable. 8. RESULTS AND DISCUSSION 8.1. Reliability Table 1 shows that instrument used in this study was reliable with Cronbach s alpha value of 1 st independent variable (Developing & Planning Performance) 0.955, with cronbach s alpha value of 2 nd independent variable (Managing and Reviewing Performance) 0.980, with cronbach s alpha value of 3 rd independent variable (Rewarding Performance) 0.981, with cronbach s alpha value of dependent variable (Employee Performance) Table 1 Reliability coefficients Scale Cronbach alpha coefficients No of Items Developing & Planning Performance(DPP) Managing and Reviewing Performance(MRP) Rewarding Performance(RP) Employee Performance(EP) Correlation & Regression The summary table shows that the r value is which states that there is a strong correlation between Employee performance and Developing and Planning Performance of PMS. The obtained r 2 value is 0.737, which states that a unit change in one variable leads to 73.7% change in the other variable. From the ANOVA table it is assured that, the model is significant as the p value is which is less than The obtained regression equation is as follows. EP= *DPP...(1) Case(1): DPP=5, then EP Becomes The above value of EP states that performance is not up to the mark. Case(2): DPP=21, then EP becomes The above value of EP states that performance is up to the mark. DPP &EP scores range from editor@iaeme.com

8 A Study on Impact of Performance Management System on Employee Performance with Specific Reference to Tech Mahindra, Hyderabad Similarly, the r value is which states that there is a strong correlation between Employee performance and Managing and Reviewing Performance phase of PMS. The obtained r 2 square value is , which states that a unit change in one variable leads to 80.7% change in the other variable. From the ANOVA table it is assured that, the model is significant as the p value is which is less than The obtained regression equation is as follows. EP= *MRP...(1) Case(1): MRP=10, then EP Becomes The above value of EP states that performance is not up to the mark. Case(2): MRP=50, then EP becomes The above value of EP states that performance is up to the mark. MRP &EP scores range from Then, the r value is which states that there is a strong correlation between Employee performance and Rewarding Performance of phase of PMS. The obtained r 2 square value is 0.707, which states that a unit change in one variable leads to 70.7% change in the other variable. From the ANOVA table it is assured that, the model is significant as the p value is which is less than The obtained regression equation from the above table is as follows EP= *RP...(1) Case(1): RP=10, then EP Becomes The above value of EP states that performance is not up to the mark. Case(2): RP=50, then EP becomes The above value of EP states that performance is up to the mark. MRP &EP scores range from Interpretation for Multiple Regression: Y=a+b1x1+b2x2+b3x3 Where y stands for Dependent variable i.e Employee Performance; a stands for constant or intercept; b stands for beta value; x stands for Independent values i.e Developing & Planning Performance (DPP), Managing & Reviewing Performance ( MRP), Rewarding Performance(RP). Incorporating the values in the above equation EP= (DPP)+0.377(MRP)+0.004(RP) From the above regression equation it can be stated that one unit increase in DPP leads to units rise in EP. Similarly when one unit change in MPP leads to units rise in EP. But, in the case of RP variable one unit increase in it s value hardly increases the value of EP by units. The model is significant as the P value is which is < Therefore the model is accepted. Thus, EP= * * *30 = = editor@iaeme.com

9 Ravi Chandra G and Dr. A. B. Saraswathi 9. CONCLUSION The present study focused on learning all the three phases of Performance Management System i.e Developing Planning Performance, Managing and Reviewing Performance and Rewarding Performance and its impact on Employee Performance. Data analysis indicates that, there is a strong correlation between Employee performance and above three phases of PMS. However first two phases of PMS Developing Planning Performance and Managing & Reviewing Performance play significate role on Employee Performance while comparing with the third phase (Rewarding Performance). As part of this study my suggestive action is to focus on Third phase as well to bring around a change and enhance the overall Performance Management System. REFERENCES [1] Aguinis, H. (2009). Performance management. Upper Saddle River, N.J.: Pearson Prentice Hall [2] Berry, B. (2004). Organizational Culture: A Framework and Strategies for Facilitating Employee Whistleblowing. Employee Responsibilities And Rights Journal, 16(1), 111. [3] Bruce, J. (2014). Risky business: How social psychology can help improve corporate risk management. Business Horizons, 57(4), [4] Clardy, A. (2013). A General Framework for Performance Management Systems: Structure, Design, and Analysis. Perf. Improv., 52(2), [5] Cooper, C. (2005). Leadership and management in the 21st century. Oxford: Oxford University Press. [6] Deadrick, D. L. & Gardner, D. G. (1997), Distribution Ratings of Performance Levels and Variability: An Examination of Rating Validity in a Field Setting, Group & Organization Management Journal 39 (4). [7] Drewitt, T. (2013). A manager's guide to ISO Ely, Cambridgeshire, U.K.: IT Governance Pub [8] Lee, D. (2006). Practice management. Philadelphia: Saunders. [9] Gungor, P. (2011). The Relationship between Reward Management System and. Procedia Social and Behavioral Sciences, Retrieved from com. [10] Greenberg, M., & Haviland, A. (2008). Issues and performance in the Pennsylvania workers' compensation system. Santa Monica, CA: RAND Corp./Center for haealth and safety in the workplace. [11] Julnes, P. (2008). International handbook of practice-based performance management. Los Angeles: Sage Publications. [12] Schneier, C. E, Beatty, R. W. and Baird, L.S.(1987),Human Performance Appraisal: Resources Development,Press Ambers [13] Dr. B Nagaraju and Pooja J, Impact of Salary on Employee Performance Emperical Evidence from Public and Private Sector Banks of Karnataka. International Journal of Marketing and Human Resource Management, 8(4), 2017, pp [14] Ravi Chandra G and Dr. A.B.Saraswathi, Impact of Performance Management System on Employee Performance- A Conceptual Frame Work for It Organizations, International Journal of Civil Engineering and Technology, 9(6), 2018, pp [15] S. Vasanthi and Dr. S. Rabiyathul Basariya, Employee Cross Training and its Impact on Employee Performance, International Journal of Civil Engineering and Technology, 9(6), 2018, pp editor@iaeme.com

10 A Study on Impact of Performance Management System on Employee Performance with Specific Reference to Tech Mahindra, Hyderabad [16] Lathesh K R and Vidya D Avadhani, A Study on Social Intelligence and its Impact on Employee Performance of Insurance Sectors in Mysuru City, International Journal of Mechanical Engineering and Technology 9(1), pp [17] K.N. Lakshmi and K.S. Sekhar Rao, A Study on Role of Emotional Intelligence on Employee Performance. International Journal of Civil Engineering and Technology, 9(3), 2018, pp [18] Dr. Nirzar Kulkarni. A Study on Relationship Between Employee Performance with High Performance HR System in Automobile Industry of Nagpur. Journal of Management, 4(2), 2017, pp editor@iaeme.com