The Impact of Organizational Goals on Performance Management

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1 International Journal of Management Sciences Vol. 3, No. 7, 2014, The Impact of Organizational Goals on Performance Management Jerome Nyameh 1, Jane Jaro 2, Agness Titus 3 Abstract Organizations and economic activities has suffered the greatest set back as a result of the inability of some organizational leaders to a set a reality goal for the organization, this has led to the assertion that organization hardly achieve organizational goals, contrary to the above assertion, organizational goals can lead to the coordination of performance management, which will guarantee that goals setting in organization can be achieve under the premise of performance management process. To achieve good performance, a well articulated and focus organizational goals must be a pointer for performance, because it defines what performance is and what is not. Hence this review recommends that every organization should be goaloriented in order to control, plan and coordinate performance management, because it is the organizational goals that can impact to the achievement of performance management in the organization. 1. Introduction One of the important roles of leaders and individual employee is to set goals for their organization. In fact, some would argue it s their most important function. Goals are what keep the organization moving, changing and reaching for more. Ideally, organizational goals should be what direct the efforts of every employee. What make the organization formal, is the ability of the organizational founders and the management team to clearly define the goal the organization intend to achieve within a frame of time and the control performance mechanism on the goals, that can only determine whether or not a goal has been achieve or not. If you want the organization to achieve its goals, you need to harness the passion, efforts and energy of every employee. The best way to do this is to challenge every employee to link their individual goals to the organization s goals. Make it a part of your performance appraisal or goal setting process. Every employee should know how their work and role contribute to the organization s success. This linking gives employees a larger context for their work, which is so important to engagement. As a leader, you should have visibility of employee goal alignment across the organization. Aligning your employee in this way helps you see if the organization is well positioned to achieve its goals, or if priorities and efforts need to be realigned. Performance management involves all the initiatives managers undertake to guide and motivate high performance. Such initiatives have usually focused on providing formal performance appraisals, rewards and recognition for high performance, as well as taking corrective action to tackle performance deficiencies. Performance management can also facilitate adaptability and continually improving performance in rapidly changing current workplaces. To do so, however, traditional periodic performance appraisal initiatives need to be supplemented by ongoing performance coaching (London, 2003) Organization Organizations are social units deliberately constructed and reconstructed to seek specific goals. Corporations, armies, schools, hospitals, churches, and prisons are included; tribes, classes, ethnic groups, friendship groups and families are excluded. Organizations are characterized by: 1 Faculty of Arts and Social Science, Department of Economics, Taraba State University Jalingo 2 Faculty of Arts and Social Science, Department of Economics, Taraba State University Jalingo 3 Faculty of Arts and Social Science, Department of Economics, Taraba State University Jalingo 2014 Research Academy of Social Sciences 491

2 J. Nyameh et al. 1) Divisions of labor, power, and communication responsibilities, divisions, which are not random or traditionally patterned, but deliberately planned to enhance the realization of specific goals. 2) The presence of one or more power centers which control the concerted efforts of the organization and direct them toward its goals; these power centers also must review continuously the organization s performance and re pattern its structure, where necessary, to increase its efficiency. 3) Substitution of personnel i.e., unsatisfactory persons can be removed and others assigned their tasks. The organization can also recombine its personnel through transfer and promotion There are many synonyms for the term, organization. like bureaucracy, but it has two disadvantages. First, bureaucracy often carries a negative connotation for the layman. Second, bureaucracy implies that the unit is organized according to the principles specified by Weber, which is not the case with many organizations. The book follows the definition of organizations as social units that pursue specific goals, which they are structured to serve, under some social circumstances. Therefore, the book has three foci: organizational goals; organizational structure; and organizations and their social environment. Organizational Goals An organizational goal is the desired state of affairs, which the organization attempts to realize. The organization may or may not be able to bring about this desired illustration of the future. But if the goal is reached, it ceases to be a guiding illustration for the organization and is assimilated to the organization or its environment. The real goals of the organization are those future states toward which a majority of the organization s means and the major organizational commitments of the participants are directed, and which, in cases of conflict with goals, which are stated but command few resources, have clear priority (Barney, and Griffin.1992). How goals are set: there are many factors that enter into the struggle to determine an organization s goals. Organizational departments or divisions often play a prominent role in the process. Personalities are another important determinant. When a strong leader has established himself in the key position of chief executive director, it is very difficult to unseat him. The danger of over measurement : Organizations are constructed to be the most efficient and effective social units. The actual effectiveness of a specific organization is determined by the degree to which it realizes its goals. The efficiency of an organization is determined by the amount or resources used to produce a unit of output. Measuring effectiveness and efficiency raises several prickly problems (Cherrington, 1994) When an organization has a goal, which is limited and concrete, it is comparatively easy to measure effectiveness. But when we come to organizations whose output is not material, statements about effectiveness are extremely difficult to validate. The same problem attends measuring efficiency and such related concepts as output, productivity and costs. The distortion of goals that arises from over measurement of some aspects of the organizations output to the detriment of others is a larger category of distortion that arise in the relations of organizations to their goals. Distortions due to over measurement are comparatively mild, since the main goals of the organization remain intact, though certain aspects of these goals become over emphasized at the expense of other sometimes more important ones. Goals displacement is much more detrimental (Cherrington, 1994). Basic Functions of Organizational Goals Barney and Griffin, (1955) outlined four basic functions or organizational goals, these are; i).provide guidance and direction, ii).facilitate planning, ii).motivate and inspire employees, and help organizations evaluate and control performance iv). Organizational goals inform employees where the organization is going and how it plans to get there. 492

3 Performance Management International Journal of Management Sciences Many leaders of organization has mistakenly think that performance management is concerned only with following regulatory requirements to appraise and rate performance. Actually, assigning ratings of record is only one part of the overall process (and perhaps the least important part). Performance management is the systematic process of: planning work and setting expectations, continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion, and rewarding good performance. Proposed Model of Performance Management Monitoring Planning Development Performance Management Rating Rewarding Planning In an effective organization, work is planned out in advance. Planning means setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. Getting employees involved in the planning process will help them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done. The regulatory requirements for planning employees performance include establishing the elements and standards of their performance appraisal plans. Performance elements and standards should be measurable, understandable, verifiable, equitable, and achievable. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities. Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. When used effectively, these plans can be beneficial working documents that are discussed often, and not merely paperwork that is filed in a drawer and seen only when ratings of record are required. Monitoring In an effective organization, assignments and projects are monitored continually. Monitoring well means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals. Regulatory requirements for monitoring performance include conducting progress reviews with employees where their performance is compared against their elements and standards. Ongoing monitoring provides the supervisor the opportunity to check how well employees are meeting predetermined standards and to make changes to unrealistic or problematic standards. By monitoring continually, supervisors can identify unacceptable performance at any time during the appraisal period and provide assistance to address such performance rather than wait until the end of the period when summary rating levels are assigned. 493

4 Developing J. Nyameh et al. In an effective organization, employee developmental needs are evaluated and addressed. Developing in this instance means increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, Improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens jobrelated skills and Competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology. Carrying out the processes of performance management provides an excellent opportunity for supervisors and employees to identify developmental needs. While planning and monitoring work, deficiencies in performance become evident and should be addressed. Areas for improving good performance also stand out, and action can be taken to help successful employees improve even further. Rating From time to time, organizations find it useful to summarize employee performance. This helps with comparing performance over time or across a set of employees. Organizations need to know who their best performers are. Within the context of formal performance appraisal requirements, rating means evaluating employee or group performance against the elements and standards in an employee s performance plan and assigning a summary rate Performance Management: Background and Context Rewarding In an effective organization, rewards are used well. Rewarding means recognizing employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency s mission. A basic principle of effective management is that all behavior is controlled by its consequences. Those consequences can and should be both formal and informal and both positive and negative. 2. How Organizational Goals Support Performance Management Goals setting in an organization, can aid performance management through the following: I. Maintain Employee Development Employee developments address the employee needs of the organization. Managing based on performance allows for tighter control between employee capacity and actual operational needs. Best practices in performance management also secure employee development to other critical factors including employee engagement, financial goals, and even customer satisfaction. II. Respect Employee Capabilities and Requirements Employee capabilities address individual skills and capacities. Keeping a close eye on operational metrics allows for closer alignment between individual capabilities and personal capacity to perform. Managing performance requires can be better supported when capabilities are well aligned with tasks and employee requirements are provided as necessary even down to the individual worker. III. Create Open Communication Nothing can impact organizational performance more than good, open communication. If everyone understands the purpose, goals and operational objectives and organization can run effectively. Rarely is over communication a problem. Be sure you take the time to communicate the vision, values, and operational objectives to maximize employee engagement and improve performance. IV. Support Vision with Goals and Objectives and Results Objectives and results are the outcomes that flow from specific action plans that are designed to help achieve organizational goals. If these action plans are not well aligned with the vision and goals of the organization they will fall short of producing the kinds of outcomes that you expect. Take the time to think through how well action plan objections are designed to produce the kinds of outcomes you really want. 494

5 V. Create Employee Commitment & Loyalty International Journal of Management Sciences Employee engagement grows out of a healthy organizational culture that recognizes individual effort and personal achievement. Performance metrics provide the perfect way for both manager and employees to understand exactly what tasks are required for organizational success. Such clarity aligns persona effort and operational outcomes. That in turns creates strong motivation on a personal level which leads to high levels of engagement and loyalty. When workers know exactly what is expected of them and they have been given the training and resources to perform successfully on the job they will respond accordingly. When compensation and recognition are tied to clearly defined metrics performance will naturally be maximized with minimal management effort. VI. Better Manage Risk Taking Risks are often difficult to manage. Building performance metrics around actions that are tied to good risk management is one of the best ways to minimize any risk in any form, including both financial and physical risks. Award programs focused on increasing risk awareness and risk abatement strategies can go a long way to improving behaviors that could otherwise produce unwanted and dangerous outcomes. VII. Improve Decision Making Some decisions must be made at the senior level but a lot of responsibility can be pushed throughout the organization as long as employees are properly supported with good training and are clear about overall organizational goals. This leader/leader model fits nicely into a performance management system as it increases many key metrics such as employee engagement, improved operations, customer satisfaction and improved risk management. VIII. Develop your Leadership Process Leadership processes focus first on good communication but an organizational culture that embraces learning and encourages employees to assume responsibility will support better decision making at every level in the organization. IX. Develop Employee Capabilities and Capacities Performance management is the best way to tie current operational needs to employee capabilities. Measuring performance both at the process level and the individual employee level allows for better alignment and prediction of both current and future needs. X. Achieve better Integration and coordination Integration is the process of applying lessons learned into organizational and operational processes. As an organization learns and matures, better performance is measured not only in immediate outcomes tied to specific processes, but also in terms of how different processes work together. Improvement in the harmony of interrelated processes can result in significant improvement in measured outcomes. 3. Conclusion Organizational goal setting is a very crucial activity to every organization that intend to success, in designing organizational success it is paramount to reflect on the goals, because it provide a means for managing performance, goal setting defines, the kind of performance expected of the organization, and how to achieve the goal hitherto set, no organization can manage performance effectively without, referring to the goals of the organization because the goals will determine the level of performance that will drive success, it is base on the goal set that management can be able to develop performance appraisal as a way of managing the performance in line with organizational goals. This implies that goal setting aid performance management in an organization. 495

6 References J. Nyameh et al. Barney, Jay B., and Ricky W. Griffin.(1992) The Management of Organizations. Boston: Houghton Mifflin Company. Cherrington, David J(1994). Organizational Behavior. Boston: Allyn and Bacon. Fried, Yitzhak, and Linda H. Slowik. (2004): "Enriching Goal-Setting Theory With Time: An Integrated Approach." Academy of Management Review 29, NO Latham, Gary P. (2004): "The Motivational Benefits of Goal-Setting." Academy of Management Executives 18, No. 4: Locke, Edwin A., and Gary P. Latham. (2002): "Building a Practically Useful Theory of Goal Setting and Task Motivation: A 35-Year Odyssey." American Psychologist 57, NO. 9, Terpstra, David E., and Elizabeth J. Rozell. (1994): "The Relationship of Goal Setting to Organizational Profitability." Group & Organization Management 19, Tubbs, Mark E. "Goal Setting Research in Industrial/Organizational Psychology." Multiple Perspectives on the Effects of Evaluation on Performance: Toward an Integration. ed. Stephen Harkins. Boston: Kluwer Academic Publishers, London, M. (2003). Giving, seeking, and using feedback for performance improvement. Mahwah, NJ: Lawrence Erlbaum Associates. 496