organization. Also, the organization s need to focus their attention on the performance of the employee and continuous development of the employees.

Transcription

1 PERFORMANCE MANAGEMENT A KEY TO ORGANIZATION S SUCCESS Chalcedony Kaitha, Loyola Academy Degree & PG College, Alwal, Secuderabad, Telangana ABSTRACT Employees are the greatest assets of an organization. Organizational goals are set and transformed into meaningful results through employees. They formulate and implement strategy. Organizations can create, communicate and deliver value to customers only through the outstanding efforts of employees. Therefore, for survival and success, organizations need to focus their attention on the performance and continuous development of the employees. Effective management of performance and increasing the engagement level of the employees will result in the higher contribution towards the achievement of organization s goals and objectives. This study tries to provide a link between performance management, reward system, employee engagement, employee contribution and the organizational success. Key Words: Performance management, rewards, recognition, employee engagement, employee contribution, organizational success. INTRODUCTION: Performance Management refers to a comprehensive scientific approach to ensure a link between efforts of individual employees with vision and goals of the organization, to achieve excellence in organization on one hand and satisfaction and growth of employees on the other hand. 1 With the increasing globalization, there is an increase in the flow of information, ideas and resources and employment opportunities. Therefore, in the recent times, it has become increasing cleared that sustained effectiveness of organizations depends in large measure on their ability to manage performance and develop the capacities of their employees. The competitive advantages of organizations depend on their abilities to attract, manage, develop and retain high quality. It is not just possessing the high quality talent that brings success to the organization but the contribution of the employees towards the achievement of the organizational objectives. Thus, it is of great need to actively engage the employees and help them to link between their contributions with vision of the organization. Also, the organization s need to focus their attention on the performance of the employee and continuous development of the employees. 2 Need for the study: Organizations spend a large amount of money on human resources (recruiting and retaining). Performance of the organizations depends on the knowledge, skill, attitudes and motivation level of the employees. Therefore, they have to make attempts for assessment of performance and initiate actions for developing their potential continuously. Employee contribution is an inevitable factor to achieve organization s success. Thus, we ought to shift our focus on performance management and motivate employees to show their excellent performance. The organization s success is linked with employee contribution and the employee contribution is linked with the level of engagement and the reward system which in turn is an outcome of performance management. Performance management system, therefore, is a critical factor to be considered.

2 Research Method: The present study is descriptive in nature. The data used for the study is collected from various journals (National & International), books, newspapers, and web sources. The study was planned with the following objectives: -To evaluate the performance management process -To critically examine the relationship between employee engagement, performance management, and organizational success. PEFORMANCE PROCESS: MANAGEMENT Performance management is not just about appraising but performing. 3 It includes measuring the performance of the employees and also engaging the employees. Performance Management system is an opportunity to enhance employee performance and create greater success for the company and the individual. Performance management is a continuous process that goes on throughout the year and it has the three critical elements, namely;planning the performance and development, Coaching (Mentoring) & Performance assessment. Planning performance and development: Performance management system starts with the vision. According to Drucker 4, Objectives are needed in every area where performance and results directly and vitally affect the survival and prosperity of the business. The primary purpose of setting goals and reviewing the performance against these goals is to create and sustain goal focus in the manger s and the managee s scheme of things. Planning is about knowing where we are going and how. While in the whirlwind of turbulent change, we may not be able to control the wind, but if we know where we are going, we can still use the wind to optimize goal achievement by adjusting our sails. 5 Organizational goals must be articulated without any ambiguity and the goal-setting processes should promote employee commitment and motivation to achieve them. Organizations need to set the SMART goals. 6 S Specific M Measurable and Mutual A Attainable and Adjustable R Relevant and Realistic T Time-bounded and Trackable SMART goals have certain attributes which make them measurable. When the employees know what the goals are and how they are measured, it increases the enthusiasm and they look forward for the attainment of the goals. According to Weihrich 7, when clear and shared objectives are set organization-wide at various levels, they bring about: -An improved understanding of individual roles, what is expected of each individual and the respective role accountabilities. -Higher-level work motivation through self-direction and control within the territory of specified accountability. -Increased super ordination, providing the role occupant with a sense of relevance to the organizational mission and some socially-accepted purpose. -Effective planning, therefore, is a powerful tool that can used to accomplish the objectives and goals. Coaching or Mentoring: Performance management process starts with planning but this is the phase where the performance actually begins. This is also called as monitoring the performance and mentoring the development of the employees. This phase is often referred to as the heart and soul of performance management. The purpose of mentoring and monitoring is to help the employee succeed. And, this phase requires the skills of the manager to

3 effectively monitor and mentor the performance of the individual employees which in turn has its impact on the organizational performance. Though the performance planning is done, it still remains ineffective and unexecuted without monitoring and mentoring. If we try to track the performance, instead of enhancing the performance, it will give rise to various problems. Therefore, in order to ensure execution of plans and performance, employees should be provided with coaching and counseling. Maxwell 8 says, People don t care how much you know, until they know how much you care.coaching aims at helping an employee improve his/her knowledge, skills, and abilities, attitudes to perform his /her role or tasks. It directly deals with performance problems of the employee. Coaching is not just correcting the performance deficiencies but also nurturing excellence at all levels in an organization. It helps the employee learn new skills, abilities and attitudes to use his/her existing or new strategies in a better way for the accomplishment of specified goals or results. Mentoring is more like the role of a wise advisor. We have five factors of production which is widely accepted. They are: Money (or the financial resources) Material (raw consumables which are converted into finished goods) Machines (the equipment used for the conversion) Men (people who engage in various activities in connection with the productive process) Management (the function that has overall accountability) The productive process or the work system can be made maximally effective, efficient and economic only through optimization of human resources. Therefore, mentoring is an important task to be performed by the management. Organizations are established to fulfill a purpose and the primary function of the organization is to ensure organizational success in terms of fulfilling its mission or purpose. Monitoring the performance of the employee and mentoring the development is a mechanism to meet the purpose of the organization. It can be done through constant interaction with employees. The more we know our employees, the more we can guide them towards the goal. Performance assessment or measuring the performance: Measuring the performance is also referred to as annual stocktaking which has three components, namely, stocktaking performance, stocktaking potential and appraising for recognition and reward. Stocking an employee s performance refers to acquiring the data related to: - Employee s performance as planned at start of the year - Employee s performance plan modified during the year - Circumstances for modifying plan - Employee s actual performance recorded during the year - Actual overall performance of the employee s workgroup during the year Compilation of these data is a crucial part of annual stocking taking. These data subsequently provide an input for stocktaking potential and appraising for rewards. Stocktaking potential: Annual stocktaking in an integrated process. Stocktaking performance and stocktaking potential do not happen separately at different times. They occur at the same time and are the outcomes of the same process. This step is all about identifying the employee potential and requirements of the employee role and to determine if there is a match or mismatch between the potential

4 and performance. The managers are required to possess high leadership qualities in order to identify the potential. Several tools are available that can facilitate a manager in the process on potential identification and enhancement. A few of them are Managee Career Development Window 9 also known as Johari Window, Assessment Center, Forced-choice Rating Scale, 360 degrees feedback. Appraising for Reward and Recognition: Reward management is not just determining the employee remuneration but doing it in a manner that he/she feels rewarded. The present day s competitive scenario lays emphasis on creative reward system. It provides employees positive reinforcement for achieving required outcomes. There is an increasing need to use individual performance appraisals as it helps: To motivate employees to perform better, to contribute more to the organization s results To reward and recognize great performers To validate decision to manage poor performers To give employees the opportunity to learn and develop To make the organization and its processes perform better The objective of appraising is to make things better. The appraisal process should be linked with planning the performance which sets key performance indicators against which the actual performance of the employee can be measured. This phase of performance management system enables the managers to examine the actual performance and also to identify if there is any deviation in the performance. If any deviation is spotted out, the circumstances which led that deviation can be studied and the information can be used for further planning of the performance. Performance management system, therefore, is a cyclical process which continues as long as the organization exists. EMPLOYEE ENGAGEMENT: With the global market becoming highly competitive, many organizations have identified the increasing need for investment in human capital, achieve maximum output from the employees in order to achieve success. Employee Engagement has emerged as one way for an organization to measure its investment in human capital 10. Employee engagement models are used in an attempt to develop more effective and efficient employees, thereby creating greater organizational benefits and better organizational performance. It is, therefore, essential to understand the relationship between employee engagement, performance management and organizational success. THE RELATIONSHIP BETWEEN EMPLOYEE ENGAGEMENT, PERFORMANCE MANAGEMENT AND ORGANIZATIONAL SUCCESS: Gallup has consistently found powerful links between employees who are engaged in their jobs and the achievement of crucial business outcomes. Companies with highly engaged workforces outperform their peers. A highly engaged workforce means the difference between a company that thrives and one that struggles. When employees are engaged, they are passionate, creative, and entrepreneurial, and their enthusiasm fuels growth. These employees are emotionally connected to the mission and purpose of their work. When employees are not engaged, they are indifferent toward their jobs -- or worse, outright hate their work, supervisor, and organization -- and they will destroy a work unit and a business. 11 Employee engagement, in simple words, is the positive attitude of the employee towards the organization. Prithvi Shergill 12,

5 chief HR officer at HCL Technologies, concurs and quotes a survey that states high performers are three times more likely to seek a new opportunity. There is an emerging need to retain the high performers. It is not just the increment but the creative reward and recognition system which makes the employee being cared by the organization and he/she will develop a sense of belongingness and a feeling of being a part of the organization. This element of belongingness adds accountability to the employees and they will put their heart, mind and soul in attaining the organization s success. Most of the companies, these days are trying to engage their employees through various recognition platforms such as: Xtramiles (HCL Technologies) - offers peers, team members and managers recognize employees for their outstanding efforts. Xtramiles are recognition points that the recogniser and the person being recognized receive when either one makes the appreciation. Accumulation of these points entitles them to earn rewards. "It is a platform aimed at propagating a 'thank you' culture and helps strengthen culture of employee appreciation," HATS OFF (NIIT) - This has peer recognition as an integral part. Every NIITian can send a ewow card using the online NIITian portal called iniitian. The ewow is shared with peers and first- and second-line reporting managers. Galaxy of thanks (Citi India) This enables employees to recognize each other s efforts and contributions. They can send their peers, team members, and seniors a personalized message that outlines their appreciation for their contributions. "Peer recognition programmes are critical to drive an effective employee engagement strategy," 13 Engaged employee consistently demonstrates three general behaviors which improve organizational performance: Say-the employee advocates for the organization to co-workers, and refers potential employees and customers Stay-the employee has an intense desire to be a member of the organization despite opportunities to work elsewhere Strive-the employee exerts extra time, effort and initiative to contribute to the success of the business 14 Thus, various recognition programmes increase the engagement level of the employees which will affect the performance of the employee. CONCLUSION: Performance Management is about enabling employees to perform better in order to achieve their set goals. That is, it is about creating a motivating work environment through appropriate rewards, feedback and creating enthusiasm in employees to do a better job. Employee contribution is purely dependent on his/her attitude towards the organization. Employee engagement, the positive attitude of the employee motivates him/her to contribute towards the effective accomplishment of the individual goals which are in relevance with the organization s goals. Individual goal accomplishment will result in the attainment of the organization s objectives which takes the performance to the next level and thereby ensuring organizational success. Human resources are most expensive resource. Human resources are greatest asset. They should be retained. Retention can be made possible through engagement and engagement through recognition and recognition through

6 performance management. When high performers are retained and rewarded in accordance with their performance, they strive for the success of the organization and contribute towards taking the organization to greater heights. Hence, Performance management is a key driver for the achievement of the organizational success. REFERENCES: [1] Dinesh K. Srivastava, Strategies for Performance Management, Excel Books, New Delhi, 2005, pg. no. 18 [2] VSP Rao, Human Resource Management Text and Cases, Excel Books, New Delhi, 2010, pg.no.398 [3] Prem Chadha, Performance Management, Macmillan, Chennai, 2003, pg. no xiv [4] Peter F. Drucker, The Practice of Management, Allied Publishers, Bombay, 1970, pg.no. 63 [5] Prem Chadha, Performance Management, Macmillan, Chennai, 2003, pg. no 75 [6] /performance-management/usingperformance-apprials.html [7] Heinz Weihrich, Management Excellence: Productivity through MBO, McGraaw-Hill International Editions, [8] Maxwell, ibid, pg. no. 103 [9] John E. McMahon and Stephen K. Merman, Career Development, in Joseph L.Moses, Assessment Centers in Robert L.Craig (Ed.), Training and Development Handbook, Third Edition, The American Society for Training and Development, pg. no [10] Employee Engagement Explicating the Contribution of Work Environment, Management and Labour Studies February, 2012, vol. 37 pg. no [11] [12] Citi India, Microsoft, M&M & HCL Technologies look beyond huge salary increments to keep best performers happy, Economic Times, May 17, [13] Recognition platforms, Economic Times, January 20, 2015 [14] Baumruk R. and Gorman B, Why managers are crucial to increasing engagement, Melcrum Publishing, 2006.