Define Performance management

Posted by Ripon Abu Hasnat on Saturday, June 13, 2015 | 0 comments | Leave a comment...

Performance management is the process of identifying, measuring, managing, and developing the performance of the human resources in an organization. Basically we are trying to figure out how well employees perform and then to ultimately improve that performance level. When used correctly, performance management is a systematic analysis and measurement of worker performance (including communication of that assessment to the individual) that we use to improve performance over time.


In other words, Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.

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Characteristics of an Ideal Performance Management System

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The following is a set of characteristics that is likely to allow a performance management system to be successful. Practical constraints may not allow for the implementation of all these features.
However, we should strive to place a check mark next to each of these characteristics, as the more features that are checked, the more likely it is that the system will live up to its promise.

Strategic congruence
The system should be congruent with the unit’s and organization’s strategy. In other words, individual goals must be aligned with unit and organizational goals.

Thoroughness
The system should be thorough regarding four dimensions. All employees should be evaluated; all major job responsibilities should be evaluated, the entire review period, and not just the few weeks/months before the review, on positive aspects as well as those in need of improvement.

Practicality
Systems that are too expensive, time-consuming, and convoluted will obviously not be effective. On the other hand, good systems are available and easy to use (e.g., performance data are entered using user-friendly software), and are acceptable to those who want to use them for decisions.

Meaningfulness
The system must be meaningful in several ways. First, the standards and evaluations conducted for each job function must be considered important and relevant. Second, performance assessment must emphasis only those functions under the control of the employee. Third, evaluations must take place at regular intervals and at appropriate moments. Fourth, the system should provide for continuing skill development of evaluators. Finally, the results should be used for important personnel decisions.

Specificity
A good system should be specific, meaning that it should provide detailed and concrete guidance to employees about what is expected of them and how they can meet these expectations.

Identification of effective and ineffective performance
The performance management system should provide information allowing for the identification of effective and ineffective performance. That is, the system should allow for distinguishing between effective and ineffective behaviors and results, thereby also allowing for the identification of employees displaying various levels of performance effectiveness.

Reliability
A good system should include measures of performance that are consistent and free of error. For example, if two supervisors provided ratings of the same employee and performance dimensions, ratings would be similar.

Validity
The measures of performance should also be valid. In this context, measures are relevant (i.e., include all critical performance facets), are not deficient (i.e., do not leave any important aspects out), and are not contaminated (i.e., do not include factors outside the control of the employee).

Acceptability and fairness
A good system is acceptable to and perceived as fair by all participants. Perceptions of fairness are subjective, and the only way to know whether a system is seen as fair is to ask the participants.

Inclusiveness
Good systems include input from multiple sources on an ongoing basis.
First, the evaluation process must represent the concerns of all the people who will be affected by the outcome. Consequently, employees must participate in the process of creating the system by providing input regarding what behaviors and/or results will be measured and how.
Second, employee input about their performance should be gathered from the employees themselves before the appraisal meeting.19

Openness
Good systems have no secrets. First, performance is evaluated frequently, and performance feedback is provided on an ongoing basis. So employees are continually informed of their performance. Second, the appraisal meeting consists of a two-way communication process, where information is exchanged and not just delivered from the supervisor to the employee. Third, standards should be clear and communicated on an ongoing basis. Finally, communications are factual, open and honest.

Correct ability
The process of assigning ratings should minimize subjective aspects. However, it is virtually impossible to create a completely objective system because human judgment is an important component of the evaluation process.

Standardization
Good systems are standardized. This means that performance is evaluated consistently across people and time. To achieve this goal, the ongoing training of the individuals in charge of appraisals, usually managers, is a must.

Ethicality

 Good systems comply with ethical standards. This means that the supervisor suppresses her personal self-interest in providing evaluations. In addition, the supervisor evaluates only performance dimensions for which she has sufficient information, while respecting the privacy of the employee.

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Aims and Role of Performance Management Systems

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The information collected by a performance management system is most frequently used for salary administration, performance feedback and the identification of employee strengths and weaknesses. In general, however, performance management systems can serve the following purposes:  (a) strategic, (b) administrative, (c) information, (d) developmental, (e) organizational maintenance, and (f) documentation. Let’s consider each of these purposes in turn.

Purposes served by a performance management system

• Strategic Purpose:
To help top management achieve strategic business objectives

• Administrative Purpose:
To furnish valid and useful information for making administrative decisions about employees

• Information Purpose:
To inform employees about how they are doing and about the organization’s and the supervisor’s expectations

• Developmental Purpose:
To allow managers to provide coaching to their employees

• Organizational maintenance Purpose:
To provide information to be used in workplace planning and allocation of human resources

• Documentation Purpose:

To collect useful information that can be used for various purposes (e.g., test development, personnel decisions)

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Disadvantages/ Dangers of Poorly Implemented Performance Management Systems

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Some of the negative consequences associated with low-quality and poorly implemented systems. These are discussed below:

1. Employees may quit due to results.
If the process is not seen as fair, employees may become upset and leave the organization. They can leave physically (i.e., quit) or withdraw psychologically (i.e., minimize their effort until they are able to find a job elsewhere).

2. False or misleading information may be used.
If a standardized system is not in place, there are multiple opportunities for fabricating information about an employee’s performance.

3. Self-esteem may be lowered.
Self-esteem may be lowered if feedback is provided in an inappropriate and inaccurate way. This, in turn, can create employee resentment.

4. Time and money are wasted.
Performance management systems cost money and quite a bit of time. These resources are wasted when systems are poorly designed and implemented.

5. Relationships are damaged.
As a consequence of a deficient system, the relationships among the individuals involved may be damaged, often permanently.

6. Motivation to perform is decreased.
Motivation may be lowered for many reasons, including the feeling that superior performance is not translated into meaningful tangible rewards (e.g., pay increase) or intangible rewards (e.g., personal recognition).

7. Employees suffer from job burnout and job dissatisfaction.
When the performance assessment instrument is not seen as valid, and the system is not perceived as fair, employees are likely to feel increased levels of job burnout and job dissatisfaction. As a consequence, employees are likely to become increasingly irritated.6

8. There is increased risk of litigation.
Expensive lawsuits may be filed by individuals who feel they have been appraised unfairly.

9. Unjustified demands are made upon managers’ resources.
Poorly implemented systems do not provide the benefits that well-implemented systems provide, yet they still take up managers’ time. Such systems will be resisted because of competing obligations and allocation of resources (e.g., time). Worse, managers may simply choose to avoid the system altogether.

10. Standards and ratings vary and are unfair.
Both standards and individual ratings may vary across and within units, and may also be unfair.

11. Biases can replace standards.
Personal values, biases and relationships are likely to replace organizational standards.

12. Mystery surrounds how ratings were derived.

Because of poor communication, employees may not know how their ratings are generated or how the ratings are translated into rewards.

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Advantages/ Contributions of Performance Management

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There are many advantages associated with the implementation of a performance management system. A performance management system can make the following important contributions:3

1. Motivation to perform is increased.
Receiving feedback about one’s performance increases the motivation for future performance. Knowledge about how one is doing and recognition of one’s past successes provide the fuel for future accomplishments.

2. Self-esteem is increased.
Receiving feedback about one’s performance fulfils a basic need to be appreciated and valued at work. This, in turn, is likely to increase employees’ self-esteem.

3. Managers gain insight about subordinates.
Direct supervisors and other managers in charge of the appraisal gain new insights into the person being appraised. Gaining new insights into a person’s performance and personality will help the manager build a relationship with that person. Also, supervisors gain a better understanding of each individual’s contribution to the organization. This can be useful for direct supervisors as well as for supervisors once removed.

4. The job definition and criteria are clarified.
The job of the person being appraised may be clarified and defined more clearly. In other words, employees gain a better understanding of the behaviors and results required of their specific position.

5. Self-insight and development are enhanced.
The participants in the system are likely to develop a better understanding of themselves and of the kind of development activities of value to them as they progress through the organization. Participants in the system also gain a better understanding of their strengths and weaknesses, which can help them better define future career paths.

6. Personnel actions are more fair and appropriate.
Performance management systems provide valid information about performance, which can be used for personnel actions such as merit increases, promotions and transfers, as well as terminations. In general, a performance management system helps ensure that rewards are distributed on a fair and credible basis.

7. Organizational goals are made clear.
The goals of the unit and the organization are made clear, and the employee understands the link between what he or she does and organizational success.  Performance management systems can help improve employee acceptance of these wider goals.

8. Employees become more competent.
An obvious contribution is that the performance of employees is improved. In addition, there is a solid foundation for developing and improving employees by establishing developmental plans.

9. There is better protection from lawsuits.
Data collected through performance management systems can help document compliance with regulations. When performance management systems are not in place, arbitrary performance evaluations are more likely, resulting in an increased exposure to litigation.

10. Timely differentiation between good and poor performers.
Performance management systems allow for a quicker identification of good and poor performers. Also, they force supervisors to face up to and address performance problems on a timely basis.

11. Supervisors’ views of performance are communicated more clearly.
Performance management systems allow managers to communicate to their subordinates their judgments regarding performance. Thus there is greater accountability in how managers discuss performance expectations and provide feedback.  When managers possess these competencies, subordinates receive useful information about how their performance is seen by their supervisor.

12. Organizational change is facilitated.

Performance management systems can be a useful tool to drive organizational change. Employees are provided with training in the necessary skills, and are also rewarded for improved performance so that they have both the knowledge and the motivation to improve product quality and customer service. Performance management provides tools and motivation for individuals to change, which, in turn, helps drive organizational change.

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Distinction between Administration and Management

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Although the terms ‘Administration’ and ‘Management’ may appear to be similar, they are actually different. In our daily conversation we use the two terms interchangeably. Administration is concerned with laying down suitable policies for the whole concern whereas management will simply execute these.
Administrators are the owners of the business.

Managers, on the other hand, are the salaried employees of the concern. The basic difference between administration and management is given below.

Sl.No
ADMINISTRATION
MANAGEMENT
1.
All policy decisions are made by the administration.
It is concerned with the implementation of the policies. Certain routine decisions may be made by the managers on less important matters.
2.
Administrators are the owners of the concern.
Managers are the paid employees of the concern.
3.
Administration is basically interested in results, i.e., profitability, sales, future prospects and so on.
Managers actually work for the remuneration they get. They direct their efforts towards the attainment of the goal set by the administration.
4.
Administrators do not take part in the daily activities of the concern.
The managers are responsible to the administrators on the daily work done in the concern.
5.
The decisions made by the administrators
are influenced by the availability of capital,
Government regulations and such other factors.
The managers are empowered to take decisions only on routine matters. They are usually guided by opinions, values and beliefs in making decisions. They also act based on precedents. i.e., past happenings.
6.
Administration is almost a permanent body. No major change, therefore, takes place in it.
Management is not a static body. Managers may resign, retire or may even be removed from service.
7.
It is a top-level function.
It is a lower-level function.

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The Different Assumptions between American and Japanese Management

Posted by Ripon Abu Hasnat on Monday, September 8, 2014 | 0 comments | Leave a comment...



Just as Douglas Mac Gregor's theory X and Y were based on management assumptions about people, so too is Ouichi's Theory Z approach. Here are 5 Theory Z principles.

1.     Job Security :
The Japanese Theory Z approach believes that people are a far too valuable resource to be lost when the economy has a downturn. In a recession, the Japanese don't fire people, they'll reduce their hours until things pick up. By contrast, when a US company is in trouble, they waste no time laying people off and as a result lose all the knowledge, skills, and expertise that go with them.

2.     Trust :
The Japanese feel that you should never give people a reason to distrust you. Loyalty is expected of all employees. In American companies, distrust and suspicion are endemic. If a person or supplier is not delivering, the company will go elsewhere for a better deal.

3.     Decision-Taking :
There are two differences between the Japanese and American approaches to decision-making. In Japanese companies, everyone gets involved in the decision-taking process as part of their commitment to the organization. As a result, the process is slow. In the US, decision-taking is the responsibility of the few and so is quick.

4.     Teamwork:
In Japan, organizational success is viewed as the result of team effort, so it is illogical to reward individuals. In the US, there is still a belief that, if you do the work and claim the results, you should get the reward.

5.     Motivation and Target-Setting:
The Japanese corporation rarely sets individuals targets as a way of motivating them. They believe that individual motivation comes from others in the team. As a result, it often takes years before a Japanese employee receives their first performance evaluation and even longer before they are promoted. By contrast, the American corporation believes that the role of management is to set their subordinates targets and ensure that these are met, using evaluation and promotion as incentives and rewards.

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Define management and Explain its nature

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Definition of Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources and natural resources. Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manage others.

Nature of Management
In for-profit work, management has as its primary function the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued products at a reasonable cost (for customers) and providing rewarding employment opportunities (for employees). In nonprofit management, add the importance of keeping the faith of donors.

In most models of management/governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods (such as employee-voting models) of selecting or reviewing managers; but this occurs only very rarely.

In the public sector of countries constituted as representative democracies, voters elect politicians to public office. Such politicians hire many managers and administrators, and in some countries like the United States political appointees lose their jobs on the election of a new president/governor/mayor.

1.     Universality:
Management is an universal phenomenon in the sense that it is common and essential element in all enterprises. Managers perform more or less the same functions irrespective of their position or nature of the organization. The basic principles of management can be applied in all managerial situations regardless of the size, nature and location of the organization. Universality of managerial tasks and principles also implies that managerial skills are transferable and managers can be trained and developed.

2.     Purposeful:
Management is always aimed at achieving organizational goals and purposes. The success of management is measured by the extent to which the desired objectives are attained. In both economic and non-economic enterprises, the tasks of management are directed towards effectiveness (i.e., attainment of organizational goals) and efficiency (i.e., goal attainment with economy of resource use).

3.     Social process:
Management essentially involves managing people organized in work groups. It includes retaining, Developing and motivating people at work, as well as taking care of their satisfaction as social beings. All these interpersonal relations and interactions makes the management as asocial process.

4.     Coordinating force:
Management coordinates the efforts of organization members through orderly arrangement of inter-related activities so as to avoid duplication and overlapping. Management reconciles the individual goals with the organizational goals and integrates human and physical resources.

5.     Intangible:
Management is intangible. It is an unseen force. Its presence can be felt everywhere by the results of its effort which comes in the form of orderliness, adequate work output, satisfactory working climate, employees satisfaction etc.

6.     Continuous process:
Management is a dynamic and an on-going process. The cycle of management continues to operate so long as there is organized action for the achievement of group goals.

7.     Composite process:
Functions of management cannot be undertaken sequentially, independent of each other. Management is a composite process made up of individual ingredients. All the functions are performed by involving several ingredients. Therefore, the whole process is integrative and performed in a network fashion.

8.     Creative organ:
Management creates energetic effect by producing results which are more than the sum of individual efforts of the group members. It provides sequence to operations, matches jobs to goals, and connects work to physical and financial resources. It provides creative ideas, new imaginations and visions to group efforts. It is not a passive force adapting to external environment but a dynamic life giving element in every organization.

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