Is performance Management, a path to success ?
A Paper presented in July, 2008 by Rakesh.
Abstract:
Managing an industry is not an easy task. Especially these days, Where the industries are changing rapidly in to hybrid systems capable of performing different tasks like Collecting raw materials, processing, Using, producing, quality checking, delivering etc. Any successful industry is said to be successful only when it is able to perform all different tasks successfully in a particular sequence without any defects or problems. So, performance is becoming a primary objective of almost all companies. Our paper deals with the crucial aspects of performance management. Our research on performance management reveals the history of the subject and puts light on the usage of performance management in present industries. Our paper also supports the predictions made on the position of Performance management, three years down the line from now depending up on the research we have made.
2.INTRODUCTION:
In order to learn any kind of new concept, it is always good to start up with the definitions of the concept. So , our paper starts with the different definitions of Performance management . We have come up with our own definition of the performance management examining different existing definitions. We have also presented the theory behind this concept.
Section 1 deals with the history of Performance management and explains about the usage of performance management in past by different industries.
Section 2 deals with the situation of the performance management in present competitive world. It puts light on the importance of the concept and the attitudes of present industries towards performance management.
Section 3 deals with the predictions we have made about the usage of this concept in coming three years. It also deals with our expectations on Performance management in being the key of success for every industry in coming three years.
To support our arguments and research we have drawn different comparison tables and graphs which would elucidate the importance of this concept and give a clear cut vision on the usage of Performance management for the success of many industries.
3.DEFINITIONS:
[1] Blalock. B. A et al( 1999:126) cites the definition of performance management as the use of Performance measurement information to help set agreed -up on performance goals, allocate and prioritize resources, inform managers to either confirm or change the current policy to meet these goals and report on the success in meeting those goals.
The above definition is a bit confusing.
[2] Smith. C. P.( 2002:105), For NHS, in his article defines performance management as a protocol of managerial tools , made especially to serve the purpose of securing basic performance of health care system in time along the direction of policy objectives.
[3] Heathfield. M. S. (n.d) defines it on the perspective of human resource as a method of creating a work environment in which employees have the power of performing the best of their abilities. She refers it to a work system which begins when a specific job is assigned as for the specifications and ends up when an employee leaves the organization along with the knowledge gained.
She continues telling that performance management is also known as performance Appraisal, Performance Evaluation and Performance Review.
3.1.OUR DEFINITION:
Keeping the above definitions and many other definitions we have come to a conclusion on definition of performance management as a method or process of using technology to monitor the routines happening in any kind of organization , to check and recheck them for perfection, depending up on the present results to set some targets in long run for an organization and to train the staff, keeping the targets in mind. It does not deal with the work as a whole but with everything related with the method used to do the work.
4.THEORY BEHIND THE CONCEPT:
Many people have different opinions about the theory behind the Performance management as it deals with the process of doing work but not with the work as a whole.
[2] Smith. C. P.( 2002:105) states that the theory behind the Performance management can be divided in to three important points.
· Guidance
· Monitoring
· Response.
Guidance: This is a method of giving or setting particular targets to the managers and office staff depending up on their designation. Guidance also includes helping them to understand the real meaning of the goals set in long run and helping them in the line of achieving the goals.
Monitoring: Monitoring involves in checking the work done by staff up to the date, keeping an eye on the work as it is being done and recording the results and outputs in different frame works like fact sheets and score cards. Establishing comities and review comities to check the processes regularly could be a good ice breaker for this concept.
Response: Response deals with the reflections of individuals and groups working in an organizations. Immediate actions for the works to be done or positive reactions for their mistakes. Taking every opportunity to improve the process at all levels is extremely relevant.
[4] Riverside . Josh , 2006. reveals the important steps in performance management as Strategic planning, Score carding, Budgeting, Forecasting, Consolidation and business Intelligence.
5.REASONS FOR PERFORMANCE EVALUATION:
Why should we evaluate Performance? What is the reason to think about managing performance? Can the performance be managed at all? The answers for these questions always there.
The basic reason for performance improvement is that, we human beings, can never be satisfied in knowledge and quality. So, in order to ensure best quality, performance management is useful weapon. Quality is achieved by doing some job which would result in less defects or absolutely no defects. And Performance management deals with how this job is done, and how can the job be done in a better way. Performance management is perfectly manageable because this present society is well equipped with tools to record the wonders happening in far up above the sky, in space. And recording the procedures of doing a particular job, reviewing the procedure and improving the procedure is far easier than recording the heavenly bodies.
6.REFLECTIONS:
If we were asked to explain the working of a performance management system. We would explain it as planning strategically to derive the numbers from an organization and integrating all different sub departments and sections of an organization to work together and help each other in order to hit the targets set by strategic planning.
7.PRACTICAL APPLICATION:
Based on our research, In our own words, we will now explain about the working of a performance management system.
Let us take an example of an organization where the supervisors are not working properly, team managers are failing in monitoring staff. All the rules are just on papers and nothing is really working resulting in loss to the organization or no profits at all.
Specifically lets take a production team and analyse their working.
People blame others when something goes wrong. They say that objectives were not set accurately if they do not understand them. Or they would try to push the blame completely on inefficient managers.
If we were performance managers, our first question would be about the information collected so far and how is the information being used to improve the process.
We would tell them what they need to know and what they need to do. How they need to do it and why they need to do it. We would sit down with them and discuss how to do the same jobs better in future. Or in other words we would discuss the basic objectives of the organization very clearly with the team and make those objectives as public as possible.
We would introduce black boards at the desks of each and every member of the production team. Even at the desks of the supervisor, manager and chief executive officer .We would ask them to write down their weekly aims, monthly objectives, quarterly objectives and year ending objectives.
All they have to do is work towards the achieving of those objectives and if possible exceed the expectations set by themselves. They have to keep updating their results weekly.
We will walk regularly through their desks to check their black boards and discuss with them the reasons of their objectives.
8.REASONS FOR THE STEPS:
* By following this process the objectives of the staff are open to everyone. If their objectives are not smart enough or if they are not relating to our organization, we would help them in improving.
Everybody would be able to see everyone else's priorities and objectives, there by they will learn from each other.
* It makes recording and monitoring of their progress really fast. And helps us to know what they are doing and the reasons for their failures.
Finally we make everyone work effectively and solve the problem of organization.
9.SECTION I: HISTORY OF PERFORMANCE MANAGEMENT:
[4] Riverside. Josh , (2006 ) explains that the concepts of Corporate performance management was first introduced in 2001by Gartner research. He also states that the other name of Corporate performance management is Business performance management. He also outlines the main features of the new concept as the integration of all processes in a business, Automation of data processing, Support of collaboration and focus of exceptions.
[5]Holloway. J et .al (1995), Contradicting to the above statement argues that people started studying the course of performance measurement as early as in 1994. In his book he argues that Performance management is a part of MBA program of Open Business School in 1994.
[6]Lewis. J (1995), stated that the first article of Professor Robert Eccles' The Performance Measurement manifesto was written in 1991. All these facts reveal that the idea of performance management had its origin from long time ago.
[7]Rechard .P.R (2000) reveals the usage of performance management in government sector as early as 1989. He states in his abstract that depending upon the performance assessment test made in between 1989 and 1992, Environment Pollution Agency of Us declared that the waste isolation pilot plant in New Mexico compiled with its regulations.
[8]Zetie.S, Sparrow. J, Woodfield. A and Kilmartin. T(1994) Explains about one of the famous industries in Britain. The name of the company is Hydra Power Dynamics. In the book, he talks about the adapting of the Total quality management technique in order to improve the quality. But in later section when he speaks about the long term improvements, he clearly mentions the three unique features observed by the company in order to improve the performance.
Those three points are
* Number of rejection notes raised on suppliers
* percentage of output returned by customers
*percentage of orders delivered late.
The above mentioned three points were checked continuously to ensure the improvement in performance. Depending up on the statistics collected from 1989 to 1992, three clear graphs are drawn showing the trends affecting the three above said points of the industry. Clear reference is provided in the reference section about this literature for further reading.
[9]Teare . R, Atkinson .C, Westwood . C(1994), have explained in their book elaborately that six major companies of Britain namely Amersham International PLC, Campbell Lee Computer Service, Hydro Power Dynamics, ICL Kidsgrove, Land Roven and Prudential Assurance , have been working since 1990's or even before to improve their quality and performance directly or indirectly.
Hence this concept of Performance Management is not a new concept, But it is an old concept, not much recognized in olden days but very famous in present days.
| Organizations which have used Performance Management in Past | Year |
| Environmental pollution agency. U.S.A | 1989-1992 |
| Hydra power Dynamics | 1989-1992 |
| Open business school | 1994 |
| Gartner Research | 2001 |
10.SECTION II: PRESENT SITUATION OF PERFORMANCE MANAGEMENT:
Presently almost all big industries or well developed organizations are using a dedicated department for performance management. And it has become one of the primary sector in determining the profits and outputs of an industry or organization both in quality and Numbers.
Multinational companies like IBM, Infosys, Tcs, Symbiosis, Ericsson have dedicated a particular department for Performance management.
Government sectors like councils and many more government based companies are using Performance management. The Council of Bedford in United Kingdom is also using this Performance management . It has dedicated a Post called Best value and Performance review manager and is monitoring over the welfare works carried on in the council (BEDFORD BOROUGH COUNCIL, JULY 2008)
Peer evaluation of employees have rapidly increased. Soft wares are made in particular to meet the needs of applications of Performance appraisal of employees individually
Soft wares like Halogen are in good demand. It has got about 1000 customers world wide accessing and using the software to evaluate the appraisal of performance.[11](Halogen Software, June 2008)
The Milwaukee centre for Independence (MCFI) has selected recently the Halogen Appraisal method. MCFI is a non profit agency assisting children, adults and families with special needs to live a better life.[11](Halogen Software, June 2008)
Performance management has become so important these days, that dedicated Soft wares are being made to evaluate the performance of a system. People are making Soft wares to evaluate individual features of performance management. One of the significant principle is 360 degrees feed back, where employees are given complete feed back in every angle of their work analysing the relevant data.
Performance Appraisal is given utmost importance these days because it helps in development of organizations. Any kind of firm is doing appraisal of their employees and evaluating their work capacities, excellence and improvements. Keeping the perfection as main motto.
Advantages of individual appraisal are that, employee's hike in salary depends upon this performance appraisal. The Promotions, Bonuses and increments purely depend on the measurement of performance.
There is a Japanese saying that, when you are sailing on a boat look at the seashore and sail, however far the Seashore may be. In the same way, The performance management also looks towards the fruits results in long run.
| Present organizations using Performance Management | Year |
| Bedford Council of U.K | 2008 |
| Halogen software | 2008 |
| Ericssion | 2008 |
| Fishing &Marine Industry | 2008 |
| IBM | 2008 |
| Larson & turbo | 2008 |
| Tata & Birla | 2008 |
11.SECTION III: FUTURE PREDICTIONS:
Our Predictions for the future of Performance management are going to be in multi directions. Three years down the line, each and every industry would recognize the importance and productiveness of performance management . Industries would look towards complete involvement and focussing towards the business processes and goals set by strategic planning.
Different schemes and programs would come out of the growing demand of the performance management to improve people working in an organization.
Very soon, The performance management would widely spread in to schools and change the processes completely. And students will start studying about the Performance management at their early ages.
Presently Performance is measured annually in any firm, but in coming three years, the annual might become quarterly appraisal or even monthly appraisal because of the increasing fame of appraisal.
By observing the Performance management properly, the supply of present commodities like oil and fuel would become cheaper in coming three years of time because, the Performance management would improve the handling and extracting techniques of Oil and petroleum refineries.
Performance management can be applied to traffic of Britain also. Which would result in not happening of grid locks or careless Accidents on busy roads.
Performance Management is becoming really famous these days and very soon it would be like an industrial revolution.
The government of United Kingdom has already started its travel towards the future of performance management. The frame work for Public Libraries is already out.
[12]MLA Programmes (2008), gives the direct work of government towards the future fruits of Performance management. MLA was tasked with the development and implementation of a national action plan to mobilize and support the public libraries in England. The web site was also speaking about the publishing of the tools to help museums and libraries to make a greater contribution towards communities through effective Performance management.
[13]Platt. D. D( March 2008), has given a speech and presentation to local government chronicle conference. On the topic of future performance management, assessment and inspection with in children's services have downloaded his speech and Presentation and they were almost dealing with the introducing the plans and goals to the children care units like health services, care services etc. They are basically doing a survey and recording the metrics and their aim is to make a new unit which would be a one stop solution for any kind of problems of children. And the government is planning to act on the importance of educating everyone in this society about Performance planning.
[14]The Rt Hon Gordon Brown MP, The Rt Hon Harriet Harman QC MP, Leader Of the House of commons(2008-2009), in the meeting of Draft's legislative program, have given an open call to public to have their say on what the government's priorities should be for the next legislative program. This is a good example of inviting people and involving people in expressing their own ideas to design a performance management system to govern them.
We have drawn the graph depending upon our research on few industries. Strictly speaking six out of ten companies are using performance management. We have drawn the graph just to show the increase in the usage of performance management by industries along with the
time.
12.CONCLUSION:
Depending upon the our research made and Knowledge gained , we are now sure that, performance management is definitely going to make a difference. It is going to bring a revolution to the industrial world very soon and would be recognized as an official management process for amending Society.
Our tables and Graphs support our arguments and predictions about the performance management . Some kind of industries have not recognized the performance management as an effective process changing strategy but still argue that it is nothing but good management. Telling how to do things and it is just a theory. They are still sticking to their conventional management strategies.
We hope that the future of performance management would prove its mettle and conclude our article by saying that, performance management is definitely a path filled with flowers to success.
13.REFERENCING:
[1] Blalock. Bonar. Ann et al., (1999). Evaluation research and the performance management movement:From estrangement to useful integration?. Sagejournalsonline, [Online].5(126),
Available at : http://evi.sagepub.com/cgi/content/abstract/5/2/117
[Accessed on 28 June 2008].
[2] Smith. C. Peter., (2002). Performance management in British Health care: Will it deliver?. Health Affairs , [Online]. 21(3): 105,
Available at : http://content.healthaffairs.org/cgi/reprint/21/3/103
[ Accessed on 28 June 2008].
[3] Heathfield . M. Susan., (n.d). Definition of Performance management. About.com: Human Resource, [Online]
Available at : http://humanresources.about.com/od/glossaryp/g/perform_mgmt.htm
[Accessed on 28 June 2008].
[4] Riverside. Josh , (2006). History of Corporate Performance management. Ezine Articles,
[Online]
Available at : http://ezinearticles.com/?History-of-Corporate-Performance-Management&id=352957
[Accessed on 27 June 2008]
[5]Holloway. Jacky et .al (1995). Performance measurement and Evaluation, preface.[ book]
Sage Publications.
[6]Lewis. Jenny (1995). Themes and Frameworks, Introduction. Performance measurement and Evaluation [book]
Sage Publications.
[7]Rechard .P.R (2000). Historical background on performance assessment for the waste isolation pilot plan, Reliability engineering & system safety,Vol : 69, issues:1 – 3, Abstract. Science Direct.
[Accessed on June 29 2008].
[8]Zetie.Stan, John. Sparrow, Alan. Woodfield and Tom. Kilmartin (1994). Hydro Power Dynamics, Achieving Quality Performance. [book] pg:65. Long term Improvement, 19 line from bottom.
[9]Teare . Richard, Atkinson .Cyril, Westwood . Clive(1994). Achieving Quality Performance: lessons from British Industries.Cassell Publications.
[10]BEDFORD BOROUGH COUNCIL (7 JULY 2008)
Available at : http://www.bedford.gov.uk/Default.aspx/Web/PerformanceManagement
Accessed on July 2008.
[11] Halogen Software (June 2008)
Available at :http://www.halogensoftware.com/news-events/news06300801.php
[Accessed on July 2 2008]
[12]MLA Programmes (2008)
Available at: http://www.mla.gov.uk/programmes/framework
[Accessed on 4 June 2008]
[13]Platt. Denise. Dame ( March 2007), Commission for social care inspection.
Available at : http://www.csci.org.uk/default.aspx?page=1944&key=
Accessed on [5 June 2008].
[14]The Rt Hon Gordon Brown MP, The Rt Hon Harriet Harman QC MP, Leader Of the House of commons(2008-2009),The Government's Draft's Legislative Program, Norwich, TSO Publications.
Available at : http://www.edf.org.uk/news/DLP%202008.pdf
[Accessed on 6 June 2008]
