Making Performance Appraisal a Positive Force in Their Organisations - Case Study Example

Executive Summary Organizations have stressed the need to increase the use of different performance management tools so that the employee contribution towards the organization can be found. This will facilitate in the development of new tools which will help to increase the motivation of employees and help the organization to achieve the goals in a better way. Omega Inc due to lack of proper performance evaluation and measurement tools have seen a decrease in sale which has affected the motivation level of employees and made consumer doubt the product of the company. The paper thereby looks towards evaluating the manner in which the performance of Omega Inc has been affected and the different direction that the management has to work to improve the business. This paper evaluates the different options and highlights the best option that the business can choose from the different alternatives. The findings suggest that the optimistic model fits the requirements of the organization as it will increase the satisfaction of the employees through extrinsic rewards. This will help to improve the commitment level of the employees and help to improve the performance of the organization by being able to work on the different areas through which the organization benefits. The use of balance score card will also help Omega Inc to use different parameters pertaining to different field like financial, customer, learning & growth which will help to work on the internal process of the company. This will ensure the measurement of the performance of the employee against different metrics which will help to develop the overall appraisal system of the employees. Using the model will provide Omega Inc to ensure better efficiency and develop the different business opportunities that the model will provide which will translate into both increased consumer confidence and development of the business The paper also proposes the use of different models which has been used by organizations in the past. This will help to evaluate and develop a new parameter based on which the organization will be able to analyze the problems and identify the results based on different variables. This will thereby ensure that Omega Inc is able to identify the model and develop it based on the business requirements so that the growth of the overall organization future prospects increases. Omega Inc thereby has to use the optimistic model of business development which will help to identify the different parameters which will help to improve relations and ensure improved customer satisfaction so that the appraisal system used in the organization is appropriate and based on the employee requirements. Along with it Omega Inc needs to use a balance score card which will help to look into the different variables associated with finance, customer and overall operations so that better strategies which facilitate in the development of these areas can be made. This will ensure that Omega Inc is able to motivate the employees as proper tools will provide the required push which will ultimately transfer into increased customer satisfaction and will provide immense benefit both to the organization, employee and society to be able to gain better benefits and improve the business operations. Table of Contents Introduction 5 Present Issues 6 Performance Management: The Potential for Consolidation 7 Inter-linkage between performance and performance renewal 7 Performance Management & Organizational Performance 8 Impact on Employees 9 Performance Management & Pay 11 Balance Scorecard 11 Conclusion 12 Recommendations 13 References 15 Introduction The technological innovation has helped in the development of new tools used in the field of performance management which has gained the support from both practitioners and academicians as it has its use in different fields. Omega Inc needs to understand the manner in which the different tools to measure performance will benefit them and ensure that the deficit in sales are filled. Using different tools will have an impact on the performance of Omega Inc at all levels. The condition in which Omega Inc presently is in requires the development of some tools and multidisciplinary actions so that a framework through which improved performances can be delivered is identified and customer satisfaction is enhanced. This makes the paper look towards approaching the following steps. The first step is to identify the present situation of Omega Inc and identify the problems that the business is presently witnessing. This will lead towards developing a paradigm through which the actual scenario is evaluated. This will work on three fundamentals; firstly the manner in which the new sales system has to be implemented; secondly the issues concerning the performance of the organization and; lastly the implication that the changes will have on employees and the relations that will be affected due to the changes that the organization is looking at. This will finally lead towards a final recommendations based on which Omega Inc will be able to improve their performance and ensure better performance from all level The recommendations are based on different factors but are limited to an extent that the acutal applicability of the final decision will depend on the market situation, the acceptance of the employee and the manner in which the overall changes are being implemented. In addition to it the recommendations is based on the prevailing conditions and any alteration or changes in this situation might make the actual situation differ and will present the recommendation not to be beneficial for the organization. Present Issues The success of Omega Inc can be gauged on the efforts of the agents who have looked towards directing the sales executives in such a manner that overall efficiency and enhance performance is possible. The decrease in the sale representative motivation has affected the business as it has transformed into decrease sales and market share which is making it difficult for Omega Inc to sustain their business (Fuller and Unwin, 2003). Despite efforts by the management to support the sales representative through training the benefit has been limited which has increased the focus on ensuring better strategy to deliver the stated objectives. Some of the issues which Omega Inc is facing are Affect on the work culture present in the organization due to lack of employee motivation to accomplish the task Lack of proper performance management system which will help to provide feedback to the employees regarding the areas they have to develop their skills for better achievement of their stated objectives The lack of proper performance appraisal system on the part of the agents has made it difficult to understand the employees who are contributing and who are not which has affected the entire work force and made it difficult to perform on the stated standards Increase focus of the company just to ensure sales and achieving the target has affected the level of services which has affected the customer satisfaction level and led towards loosing vital customers which were otherwise loyal to the company The different issues which Omega Inc faces has been highlighted above and is primarily due to the lack of proper performance management tools and appraisal system in the organization. This has made it imperative that Omega Inc looks towards addressing this issues on a priority basis and look towards developing tools which will help them to continue with their quality services and ensure better customer satisfaction (Brown and Reich, 2007). Performance Management: The Potential for Consolidation Different studies carried out in different directions and in different fields show the importance of having a performance management system in the organization. Since, it looks towards evaluating both the macro and micro factors the relevance of the tool increases. This has made performance management grow and it provides various linkages between planning, execution, assessment, review and achievement of the objective of the business as it looks towards working on the different areas through which the overall efficiency can be gained (Brown, 2009). The varied advantage that performance management system provides has certain disadvantage associated with the cost structure and the cost in high especially in the short run which makes it difficult for the business to ensure smooth operations (Harley, 2002). This will make Omega Inc look towards determining the manner in which job security and appraisal can be improved for the organization. This will require that with the development of performance evaluation procedure a tool which helps to impart relevant training to the employee is also developed so that the different framework and gaps can be filled (Guest, 2002). This will require that Omega Inc looks towards aiming for the future and increases their investment in the direction of human capital by having better training program developed for them. This will require that the infrastructure through which the relevant skills will be provided is developed and the employees are empowered to direct their efforts in a better way so that the organization is able to pursue its objectives in the predetermined manner (Goddard, 2004) Inter-linkage between performance & performance renewal Omega Inc has to ensure that a linkage that exist between performance and the manner in which it will be reviewed and appraised is developed so that better functioning and development of performance evaluation tool is possible. This makes it important that Omega Inc lays stress on the linkage that exist between performance and its execution so that proper tools are developed through which the performance of the employees can be reviewed and appraised. This will require that the person evaluating the employees has the required skills and is able to access the performance on correct parameters (MacDuffie, 2005). This will help to understand the different areas that the employee needs to work in the future for better attainment of the goals. This will require fairness and transparency along with monitoring the performance so that there are no discrepancies and the employee feel the complete process fair and based on it is able to determine the compensation for them (Ramsay, Scholarios and Harley, 2000) This makes it important that every linkage which will have an effect on the final performance is evaluated by Omega Inc and based on it future strategies are developed so that it benefits the organization on the whole. This will help Omega Inc to work towards long term goals as identifying the gaps and working on those will help to fill those and will increase the likelihood of having the efforts directed in a manner through which effectiveness is gained in the overall performance. Performance Management & Organizational Performance The manner in which organizations have started to use different tools of performance management has increased the dependence on it and has made it one of the prime tools in evaluating the organizational performance. This is because of the fact that organization that uses these tools are better placed and is able to evaluate different factors and parameters which would have not possible otherwise. This thereby benefits organizations that use the tools as they are able to develop a better framework in coordinating the efforts of the employees. The strategy of developing a performance evaluation tool will help Omega Inc to identify the different areas which when worked on will help to improve the performance. This will make the management lay stress on areas through which overall effectiveness can be gained. This will also provide the required direction through which the appraisal of the employees can be gauged and will thereby transform into increasing the satisfaction level of the customers which will translate into better business opportunities (Osterman, 2005). Impact on Employees Performance management tools will provide the required advantage only when employees are involved and increased focus on employees is made so that increase satisfaction of the employees can be measured. This will require that Omega Inc is able to understand the requirements of the employees and make a change in their perception and behavior so that the inequality which is present in the work force reduces and the entire work force is able to commit themselves towards the larger goals of the organization. Omega Inc through this process will be able to develop a measure which will look towards social justice. This will thereby help in the development of performance appraisal system which focuses on the different aspect of business and through it Omega Inc is able to use the resources in the most efficient manner (Harmon, Scotti and Behson, 2003). This brings forward two models which Omega Inc can look at as the models look at increasing employee empowerment and providing intrinsic rewards to the employees so that the workforce is better motivated and they look towards pushing all their efforts towards increased customer satisfaction. Omega Inc through this method will be able to gain efficiency both in the use of resources and increasing customer satisfaction as employees will be contend which will finally get reflected on the work. This is depicted below (Ramsay, 2000, p. 506) The above model is the optimistic model looks towards enhanced organizational performance by using extrinsic factors, improving relations, commitment and having certain discretion so that the overall efficiency in rendering services to the customer increases. This will transform into more authority and the decision making ability to employees at all levels which will transform into a happy work force and will help to multiply the efforts of the organization towards specific organizational goals. The other model which can be looked at (Forth & Millward, 2004) The above model doesn’t fit in the present situation for Omega Inc as it focuses on work intensification and insecurity. This is already the condition that Omega Inc is witnessing as decrease in sales have increased the burden on sales executives and increased the job insecurity associated with them. The above model is the exploitation model and looks towards working on the weakness and areas which can be exploited of the employees so that the organization is able to use it to their advantage. This model leads towards job strain which will increase the risk for the business as the manner in which trade unions have increased will impact the working and increase the pressure on the organization to give higher compensation (Handel and Gittleman, 2004). Omega Inc has to look into both the models as it fits their present situation and weighing both the models have to choose one. Omega Inc has to ensure that the model chosen should fit their working culture and instead of reducing the commitment level of employees should enhance them. This will require working on the different aspect of the model and developing a tool which helps to increase the level of monitoring and is used in a manner that helps in long term development of the organization (Fuertes & Sanchez, 2003). Performance Management & Pay Skills of an employee determine the compensation of employees as employees who are skillful and are able to handle the different situations in a better way are likely to get a higher compensation in comparison to others. To ensure correct evaluation of the compensation the performance management process has to be developed which uses different tools focusing on different areas of employee performance so that correct talent is spotted. This will also provide an opportunity to look towards developing tools for job discretion and improvement. The cost involved in this model and identification of the different skills is high but using a process which ascertains the different areas of employee involvement will ensure that the business is able to gain efficiency as the cost associated with employee turnover and the entire process of recruitment and selection doesn’t have to be done again and again (Danford, Richardson, Stewart, Tailby & Upchurch, 2004). Omega Inc by using the different parameters will be in a position to develop a performance based system where the employees are evaluated. This will help to ensure the linkage between performance and pay and will motivate the employee to work harder. Better benefits in this direction can be achieved if employees are also provided training, job security, promotion within the organization and similar other things based on the performance evaluation parameters. It will motivate the employees and ensure that they work towards bigger things which help in the development of a cause and effect relationship through which the organization is able to demonstrate better results (Felstead & Gallie, 2002). Balance Scorecard Using balance score card along with other performance evaluation tool will benefit Omega Inc as this tools looks into different variables. The fact that balance scorecard looks into different variables like financial, customer, learning & growth, and internal business process it will help to review the performance of Omega Inc in a better way. This will help in the identification of employee contribution towards the organization and will thereby help to understand the compensation package of the employee based on different parameters (Farias, 2008). Omega Inc through the process of balance score card will be able to look into different factors which look towards evaluating the present services and process that is being used by the company. This will help to identify the gaps that exist and Omega Inc can look towards fulfilling the gaps by designing training program based on the need of the organization so that better performance is delivered. This will also help Omega Inc to find the different metrics which can be used in evaluating the performance of the employees so that an appraisal system which is developed has the required ingredients (Becker and Gehart, 2006) Conclusion Omega Inc which is facing problem related to employee confidence and decreasing sales have to look towards developing tools which helps to evaluate the performance of the employee and develop appraisal tools based on it. The problem for Omega Inc is compounding and needs to look towards altering the behavior of the employees so that tools which will help to measure the performance of the employee based on intrinsic and extrinsic reward is developed (Pil & MacDuffie, 2006). Performance management on this front will help Omega Inc as it will help to develop the required metrics through which the performance of the employee will be evaluated and overall efficiency gained. Omega Inc has been thereby presented by two models i.e. the optimistic model and the exploitation which looks towards working on the different variables through which the performance of the employee can be improved. Both the business focuses on different aspect of the employee contribution towards the organization which will thereby help to increase customer satisfaction. The optimistic model will help Omega Inc as it looks towards increasing the morale of the employee and works on different aspect of the business which will help to ensure overall efficiency (Edwards & Wright, 2000) Recommendations The present condition of Omega Inc requires that they develop a performance management process which looks towards employee appraisal so that employees are better satisfied and works coordinating their efforts towards a common goal. This requires that Omega Inc focuses on the optimistic model as this model looks at enhanced organizational performance by using extrinsic factors, improving relations, commitment and having certain discretion so that the overall efficiency in rendering services to the customer increases. This will transform into more authority and the decision making ability to employees at all levels which will transform into a happy work force and will help to multiply the efforts of the organization towards specific organizational goals (Baird, 2002). This will benefit Omega Inc as it will be in a position to be able to ensure that they are able to develop a framework through which the overall process improves and the organization is able to ensure higher customer satisfaction. This will thereby transform into increased customer satisfaction and improve the morale of the employee which will lead towards better accomplishment of the goals in the future. References Becker, B. E. and Gehart, R. 2006. The Impact of Human Resource Management on Organisational Performance: Progress and Prospects, Academy of Management Journal, 39 (4), pp. 779-801. Baird, M. 2002. Changes, Dangers, Choice and Voice: Understanding What High Commitment Management Means for Employees and Union, The Journal of Industrial Relations, 44 (3), pp. 359-375 Brown, C. and Reich, M. 2007. Micro-Macro Linkages in High Performance Employment Systems, Organizational Studies, 18 (5), pp. 765-781. Brown, T. 2009. Restructuring, Teams and Learning: The Case of a Clothing Company, Studies in Continuing Education, 21 (2), pp. 239-257 Danford, A., Richardson, M., Stewart, P., Tailby, S. and Upchurch, M. 2004. High Performance Work Systems and Workplace Partnership: A Case Study of Aerospace Workers, New Technology, Work and Employment, 19 (1), pp. 14-29. Edwards, P. and Wright, M. 2000. ‘High Involvement Work Systems and Performance Outcomes, The International Journal of Human Resource Management, 12 (4), pp. 568-585 Farias, G. 2008. High Performance Work Systems: What We Know and What We Need to Know, Human Resource Planning, 21 (2), pp. 50-55. Felstead, A. and Gallie, D. 2002. For Better or Worse? Non-Standard Jobs and High Involvement Work Systems, SKOPE Research Paper No. 29, University of Warwick Forth, J. and Millward, N. 2004. High-Involvement Management and Pay in Britain, Industrial Relations, 43 (1), pp. 98-119. Fuertes, M. and Sanchez, F. 2003. High-Involvement Practices in Human Resource Management: Concept and Factors that Motivate their Adoption, International Journal of Human Resource Management, 14 (4), pp. 511-529 Fuller, A. and Unwin, L. 2003. Learning as Apprentices in the UK Workplace: Creating and Managing Expansive and Restrictive Participation, Journal of Education and Work, 16 (4), pp. 407-426. Goddard, J. 2004. A Critical Assessment of the High-Performance Paradigm, British Journal of Industrial Relations, 42 (2), pp. 349-378. Guest, D. 2002. Human Resource Management, Corporate Performance and Employee Well-Being: Building the Worker into HRM, The Journal of Industrial Relations, 44 (4), pp. 335-358. Handel, J. and Gittleman, M. 2004. Is There a Wage Pay-off to Innovative Work Practices?, Industrial Relations, 43 (1), pp. 67-97. Handel, M. and Levine, D. 2004. The Effects of New Work Practices on Workers, Industrial Relations, 43 (1), pp. 1-43 Harley, B. 2002. Employee Responses to High Performance Work System Practices: An Analysis of the AWIRS95 Data, The Journal of Industrial Relations, 44 (3), pp. 418-434. Harmon, J., Scotti, D. and Behson, S. 2003. Effects of High-Involvement Work Systems on Employee Satisfaction and Service Costs in Veteran Healthcare, Journal of Health Management, 48 (16), pp. 393-418 MacDuffie, J. 2005. Human Resource Bundles and Manufacturing Performance, Industrial and Labor Relations Review, 48 (2), pp. 197-221 Osterman, P. 2005. Skill Training and Work Organisation in American Establishments, Industrial Relations, 34 (2), pp. 125-146 Pil, K.F. and MacDuffie, J.P. 2006. The Adoption of High-Involvement Work Practices, Industrial Relations, 35 (3), pp. 423-455 Ramsay, H., Scholarios, D. and Harley, B. 2000. Employees and High-Performance Work Systems: Testing Inside the Black Box, British Journal of Industrial Relations, 38 (4), pp. 501-531. Read More