How the Performance of Omega Inc Has Been Affected Over Time - Case Study Example

PERFORMANCE MANAGEMENT AT OMEGA INC. Coordinator Name Student Name Date of Submission Word Length: 3051 words Executive Summary Recent years has seen widespread growth in the use of performance management tools so that the performance of the employees can be evaluated and based on it different appraisal program for the employees can be developed so that customer satisfaction maximizes and employees can be better motivated. Omega Inc. has been recently affected by the manner in which the business is conducted as it has led to decrease sale and decreased motivation of the employees which thereby has affected the consumer confidence in the product. The paper presents the manner in which the performance of Omega Inc has been affected over time and the manner in which the business will be able to gain efficiency in the business. This paper presents the different alternatives that Omega Inc has and also prescribes the best option for the business. Omega Inc needs towards using the optimistic model where it will look towards identifying the extrinsic satisfaction level. This will help to build relations with the management and will thereby help to improve the level of commitment which will thereby ensure better organizational performance. This will help in developing a tool which will help the business to grow. This brings forward to the use of balance scorecard so that different parameters like financial, customer, learning & growth, and internal business process are looked into. This will help Omega Inc to look into different metrics and will help to identify the manner in which the performance of the employee can be appraised. This will thereby help to develop a model which looks towards expanding the business growth opportunity and will help to develop increase customer satisfaction level and improve the overall efficiency of the business. This paper thereby looks towards a secondary analysis where past data is used for different players in the market and based on it a method is developed which use towards analyzing the result based on different parameters. This will help to ensure that the model used to gather data looks into different aspect of the business will provide useful data for the development of the business. Omega Inc thereby has to look towards using the optimistic model which works on developing relations and identifying the areas which when worked on will help to multiply customer satisfaction and also help in proper evaluation of the performance of the employees. This should be matched by the use of balance score card which looks towards analyzing different parameters like financial, customer, learning & growth, and internal business process so that important metrics can be developed and the performance of the employees can be evaluated correctly. This will help the business to provide the necessary infrastructure and ensure proper evaluation of the strategies which will help to motivate the employees to work in the required direction. This will thereby ensure better customer satisfaction and help the management to use their efforts in the correct direction where the organization, society and the employees benefit over a bigger period of time. Table of Contents Introduction 5 Present Concern for Omega Inc 6 Performance Management: The Potential for Consolidation 7 Inter-linkage between performance and performance renewal 7 Performance Management & Organizational Performance 8 Performance Management: Impact on Employees 9 Performance Management & Pay 11 Balance Scorecard 11 Conclusion 12 Recommendations 13 References 15 Introduction The last decade has witnessed increased interest from both the practitioners and academicians on the use of performance management for production, human relations and work organization. This has been looked as a fulcrum based on which Omega Inc. needs to look towards improved performance and address the lag that the sales department is witnessing. Changes made by the management on any front will have large effect on the micro and macro performance. The present situation requires some multidisciplinary perspectives which attempts to solve the business fundamental problems and provides the basic infrastructure for growth and customer satisfaction The paper thereby follows the following structure. Firstly, the present structure of Omega Inc. which has been conceptually designed is being analyzed to find the area of concern. The paper then looks to find the theoretical issues surrounding the paradigm. This makes the analytical performance to be viewed from three angles: (a) the scope and chances for developing a new sales regime (b) the different issues that relates to organizational performance and (c) the implications that this changes will have on employees and the interwining relation that the issues have. Finally, the paper looks to present different recommendations that will help to improve the organizational performance. The paper thereby looks into different regions but is limited to the fact that the practical applicability of the decision can be gauged under actual market conditions and might result in some other problems which has to be encountered to ensure effective decision. Also, the fact that the present solution is based on the present market situation and when the changes are applied the result might be different due to changes witnessed in the business environment which affects the final performance but will be limited to a large extent. Present Concern for Omega Inc Omega Inc. that has been successful over the years has been primarily due to the efforts of the agents who look to achieve business efficiency through their sales representatives. The business has recently faced the trouble of decreasing market share and business due to reduced motivation shown by the sales representative. Despite providing a training program the employees haven’t been able to demonstrate the same skills due to some areas which are of prime concern to the business. Some of the area of concern for Omega Inc is as Decreased motivation level of the employees which has affected the work culture No system in place to monitor the progress of the employees so that constructive feedback can be provided and areas highlighted which will help them to improve their performance The distributors lack a system of performance appraisal which will help to identify the people who has the required talent and will act as a problem to compensate the employees correctly Decreasing customer satisfaction due to additional pressure being placed on them due to increasing targets has affected the service level and has made the company loose valuable customers Omega Inc. has thereby been deeply impacted by the lack of performance management system which has affected the entire motivation level, performance appraisal system and reduced in reduced customer satisfaction. This has deeply impacted the manner in which the organization was providing services to its customers and requires rapid changes and steps so that the performance and belief in the company is restored so that the employees are able to perform as per the required guidance and target set by the company. Performance Management: The Potential for Consolidation There exist a large number of literatures supporting the manner in which performance management has grown. This is important that the achievement of performance can be varied due to macro and micro environmental factors (Harley, 2002). Performance management has thereby grown and provides the linkage between performance planning, performance execution, performance assessment, performance review, performance renewal and achievement of the objectives of the business (Hollingsworth & Boyer, 1997, p.2). Despite this using performance management system becomes a difficult proposition for Omega Inc. due to high short run costs due to increasing competition which look towards using low cost approach for its competitors (Konzelmann & Forrant, 2000, p. 6). This makes it important that Omega Inc. looks towards understanding the facet of performance appraisal and job security for the employees (Forth & Millward, 2004). This makes the tool of training important as developing institutions to provide the required training and development helps to improve the mindset of people (Harley, 2002, p. 43). This calls for increased investment from Omega Inc. in human capital through development of training program, brighter career prospects, job stability, and reward through performance appraisal system (Thompson, 2003). This will help to develop the required infrastructure through which Omega Inc. will be able to understand the different strategies through which the business will be able to achieve efficiency and ensure that the goals are achieved and customer satisfaction is enhanced. Inter-linkage between performance and performance renewal Omega Inc. needs to consider the importance of the linkage that exists between performance and the manner in which it will be reviewed. The most important linkage remains between performance planning and performance execution as proper planning will help to execute the goals effectively and will thereby guide the overall management in their perspective towards a common goal (Guest, 2002). Performance execution further leads towards assessing the actual performance so that based on it the areas which need to be improved can be identified and also the manner in which the performance will b reviewed can be identified (Guest, 2002). This provides the management to determine the appraisal system and also provides the required impetus based on which the organization is able to monitor and review the performance system so that the business is able to gain effectiveness. Omega Inc. needs to look towards understanding the manner in which the different linkages work and an effect on one will have an effect on the entire performance. This thereby makes it all the more important to identify the different areas which will have an effect on the overall performance and needs to build on it so that long term gains and the chances of accomplishing the goals are better ascertained. Performance Management & Organizational Performance Performance management has been a topic of discussion due to manner it has resulted in positive improvements which has benefitted the organizational performance over a period of time (Ashton & Sung, 2002, p. 17). This shows that using the performance management system helps the organization to increase the chances of better outcome compared to organizations which don’t use performance management system (Goddard, 2004, p. 352). This creates a debate whether performance management system organization are able to perform better performance but on situations which required the use of better system (Wood, 1999, p. 368). Omega Inc. through the process of performance management will thereby be able to gauge the performance of the organization and ensure strategies to improve the working of the business. This will help Omega Inc. to develop the required transition through which the business will be able to bring effectiveness and ensure proper performance appraisal system so that customer satisfaction multiplies and the business is able to gain the required growth and leverage they are looking for. Performance Management: Impact on Employees The value of performance management can be reaped only when the role and importance of employees are considered which makes it require to re-focus on employees and develop tools for satisfaction of employees (Appelbaum, 2000, p. 110). This makes it important that Omega Inc. explores the employees’ perception and behavior so that the quality of the workforce can be improved accordingly and reduce the growing inequality that exists in the workforce (Appelbaum, 2000, p. 110). This will ensure that Omega Inc. is able to find out reasons for social justice and ensure proper performance appraisal method which helps to provide the employees with the tools to ensure maximum customer satisfaction. This helps to develop two models which Omega Inc. needs to consider so that maximum customer satisfaction can be ensured and the employees are provided with increased empowerment and intrinsic reward so the employees are motivated and contended (Edwards & Wright, 2001, p. 570). This will help Omega Inc to ensure better customer satisfaction and will thereby develop the structure through which employees are more committed as shown below (Ramsay, 2000, p. 506) The above model is the optimistic model which looks towards extrinsic satisfaction through increased compensation, incentives which are matched by improving management relations. This will help to ensure that the employees are more committed and having the discretion will help to ensure increased organizational performance and ensure that Omega Inc is able to provide better services and increased customer satisfaction. The second model is as The above model shows that insecurity and work intensification results in results in job strain which finally has an effect on the performance of the organization. This is an exploitation model which looks towards exploiting the employees which thereby has an effect on the performance of the employee and dips the overall performance of the organization thereby creating unclarity in the manner the business is conducted (Fuller and Unwin, 2003). The above model thereby helps to depict the manner in which Omega Inc has to look towards developing ways in which the company will be able to improve the performance and ensure better appraisal methods so that customer satisfaction is enhanced and the employees are able to perform in the most diligent manner. Performance Management & Pay Compensation of an employee has a long lasting relationship with the performance and employees who demonstrate higher capabilities and skills are bound to get a higher pay. Using performance management as a measure of performance appraisal increases the job discretion which makes the employee use a wider range of skills thereby enabling the organization to be able to perform effectively (Handel & Levine, 2010, p. 3). This will also help the organization as setting a compensation package based on performance will help Omega Inc to offset the cost associated with high turnover of employees, recruitment cost and training cost which they have to incur when they recruit a new employee. Omega Inc. through the performance based system where the performance is evaluated can identify the differentials that exist in the wages by increasing the amount of intrinsic rewards (Forth & Millwards, 2004). This will require that the performance appraisal system includes teams, training programs, internal promotion, and job security so that employees are motivated and look towards accomplishing the task on hand. This will help Omega Inc. to develop a cause effect relationship and will help to ensure better performance monitoring system to ensure better performance and satisfaction of the employees. Balance Scorecard Omega Inc. can look towards the use of balance scorecard for performance appraisal as it is different from other traditional methods which are used to evaluate the performance of employees. Since, this method uses a mix of financial, customer, learning & growth, and internal business process (Fuertes and Sanchez, 2003)it helps to analyze the performance better and based on different factors which thereby helps to understand the employees’ contribution better and will help to determine the compensation package accordingly. Using the balance scorecard will provide Omega Inc an opportunity to look into different factors like the present services, process and human resource factor that is being used. This will thereby provide the required push that will enable Omega Inc to develop the training program in such a manner that it helps to magnify the skills of the employees. This will provide the metrics that Omega Inc needs to appraise the performance of the employees and will provide the framework against which the performance will be evaluated and will help to re-align the activities from time to time as the need will arise. This will also provide Omega Inc to understand the areas and activities which are strengthening and will help to make strategies keeping in mind the financial and non financial aspect. This will thereby ensure that the employees’ performance are evaluated on correct metrics and will provide the necessary responsibility and accountability through which efficient services are provided to its customers. Conclusion The discussion on the problems faced by Omega Inc and the tools that will help them to combat those identifies the use of important tools so that data is gathered and appraised correctly. The problem highlights the increasing level of complexities that Omega Inc is facing due to lack of performance management system which will help to provide proper training and measure the performance of employee based on different parameters so that extrinsic and intrinsic rewards can be identified. Performance management will here act a tool which will consolidate position of the organization and its employees as it will help to develop metrics through which the performance is evaluated and steps taken to improve them. Omega Inc has two models where they can look towards intrinsic rewards and training to ensure maximum customer satisfaction which will thereby ensure the use of optimistic model. The company can also use the exploitation model where there is job insecurity and fear which looks towards the exploitation of the employees. Using the optimistic model will help to develop the infrastructure and ensure better customer satisfaction. The performance and pay are also interlinked and using the performance management aspect will help to improve each and every direction that will ensure better customer satisfaction. This also calls for the use of balance scorecard as it uses different metrics like financial, customer, learning & growth, and internal business process which will help to evaluate the performance of the employees better and will help to make training programs and develop tools so that customer satisfaction multiples and the business is able to gain efficiency in the overall operations. Recommendations Omega Inc based on the manner in which they have performed and the manner in which the performance of the employee is evaluated needs to develop the required tools and mechanism to ensure better customer services and customer satisfaction. Omega Inc on this front needs to look at developing a performance management system so that the performance is monitored and tools are developed for improved performance Omega Inc needs to look towards developing a performance management system based on the optimistic model which looks towards extrinsic rewards and developing management relations so that the employees’ performance can be evaluated and strategies develop to increase the satisfaction level of employees. Using the above model will help to ensure that the model works on the areas where the employees talent is evaluated on various parameters and the required training program is developed. Further, Omega Inc also has to look towards using the balance scorecard as it looks to use different metrics like financial, customer, learning & growth, and internal business process which will help Omega Inc to understand the entire process. This will also help the management in understanding completely the manner in which the business has been performing and based on it different parameters are used. This will also help the business to look at areas which when worked on will help to improve the efficiency and will thereby help to motivate the employees and provide the required services that the customers are looking from the company. References Appelbaum, E. 2002. The Impact of New Forms of Work Organisation on Workers’ in Murray, G., Bélanger, J., Giles, G. and Lapointe, P. Work and Employment Relations in the High-Performance Workplace, London: Continuum. Ashton, D. and Sung, J. 2002. Supporting Workplace Learning for High Performance Working, Geneva: International Labour Office. 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