Performance management - Engendering Trust and Effectiveness
in the Organisations


By

Dr. H.C. Gurnani
Reader
Department of Economics, N.M.S.N Dass (P.G.) College
Budaun
&
Deepa Gupta
Asst. Professor
Department Of Management Studies
IILM - Academy of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
&
Mukul Gupta
Asst. Professor
Department Of Management Studies
IILM - Academy of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
 


Performance management is a relatively new concept to the field of management. It reminds us that both being busy nor training and not even lots of hard work alone produces results. The major contribution of performance management is its focus on achieving results -- useful products and services for customers inside and outside the organization. Performance management redirects our efforts away from business toward effectiveness.

In the recent past, organizations have been facing multi-dimensional challenges as never before. Increasing competition from businesses across the world has made it compulsory for the business houses to ensure that their performance management and strategies make the company viable and remain competitive. Everyone (and everything) in the organization must be doing what they're supposed to be doing with bench marked quality standards to ensure that they retain and delight their present and potential customers effectively.  This in turn necessitates that systems and processes in the organization be applied in the right way to produce the right things to produce results. All the outputs of the subsystems across the organization must be aligned to achieve the super ordinate goals, mission and vision of the organization for it to survive and grow. Only then it can be said that the organization and its various parts are really performing.

When we think of performance in organizations, we think about the performance of employees. However, performance management should also be focused on:

1. The organization

2. Departments (computer support, administration, sales, etc.)

3. Processes (billing, budgeting, product development, financial management, etc.)

4. Programs (implementing new policies and procedures to ensure a safe workplace; or, for a nonprofit, ongoing delivery of services to a community)

5. Products or services to internal or external customers

6. Projects (automating the billing process, moving to a new building, etc.)

7. Teams or groups organised to accomplish the desired result for internal or external customers

One of the keys to defining the performance is to be sure that it is in line with the needs and mission of the organization as a whole. Other factors involved in defining performance in an organization are (1) establishing a role and direction for a performer, (2) clarifying the needs of stakeholders, (3) setting goals and objectives, (4) developing a system for measuring the effects of the performance (5) developing a means of maintaining the desired performance and the behaviors that make up the performance.

To be successful, a performance management system should be instituted at all levels of the organization, and the first step towards doing this is to define the performance that is needed to produce the desired effects. In the example used of the basketball player, his performance, or behavior, was simply to shoot a ball through a basket that was fifteen feet away. This is a task that is relatively easy to define. Unfortunately, the behaviors that are needed to make an organization run smoothly and productively are not as easy to define. Defining the performance is like the foundation of a cheerleading pyramid. If it is not done correctly, all of the other aspects of the performance management system will take a hard fall. After all, how beneficial would it be for a company to spend time and resources on developing a behavior and a system to measure and maintain the behavior? Only to find out that the behavior that they defined was not the one needed to produce the product, or to deliver the service that the company needed. Only the most open-minded of all companies may be able to look at the mistake and say "at least it was a good learning experience."

The first step, setting the direction, involves aligning the performance of the individual or team with the rest of the organization. This is key, because no matter how well a person or team performs, if the performance is not in line with the mission of the organization it is just a wasted effort. In addition, it will most likely lead to conflicts that detract from the overall performance of other members of the organization, as well as the organization as a whole. Also, the role of the individual or team must be set, and to describe how their performance will add to the direction that has been set and the performance that is being defined. For instance, the direction of Bill's team is to win basketball games, and the role that Bill plays on his team is to score baskets, and in this case, make his foul shots.

The stakeholders of an organization include all of the people or groups of people who maintain an interest in the manufacturing of products and delivery of services within the organization. Stakeholders may include customers, executives, middle management, and co-performers. All parts of the organization must keep in mind the needs of the stakeholders when defining their performance. The organization itself must be concerned with the needs of its customers, as well as the needs of its employees. The individual employees must remember the needs of the organization and their coworkers when defining their performance to ensure that their behaviors enhance the final product or service. The middle management is there to act as liaisons to ensure that the needs of both the organization and its individuals are in line, and are met. As each level defines its performance, and sets its direction, the levels start to build the foundation for identifying and satisfying the needs of each of the other levels in the organization.

A coordinated approach understood by staff leads to confidence. Confidence leads to trust. Trust provides the foundation for a positive cultural environment, which in turn provides the driving force necessary to achieve performance improvements.

The special contribution that a team makes to an organization is the pooling of the collective creativity, skills, knowledge and experience of its members. This benefit is only realized in a climate of open communication based on trust, mutual respect, and commitment to a common purpose. Team members commit to an approach to working together which includes specific guidelines, developed by team members, to help them to communicate ideas and concerns, give one another feedback, conduct meetings, solve problems and make decisions.   The mature team has also developed a sense of trust among its members and with management. This sense of trust is key in performing a peer review. Because without it, the results of the assessment survey are likely to be sugarcoated. This is an attempt to make the team's level of performance look better, and to avoid causing ill feelings among the team's members that could disrupt the culture and thereby restrict the ability of the team to perform. Also, if trust is not present among the members of the team, they will feel that the best way to get a good review is to have every team member give a positive review, not necessarily an objective one. Once trust has been established, the members of the team will feel confident enough to provide real, honest answers that are objective and will best serve the future performance of the team. By establishing trust with its managers, the team becomes aware that the information they are providing will be used in a fair and productive manner, which will further promote honest and objective answers.
 


Dr. H.C. Gurnani
Reader
Department of Economics, N.M.S.N Dass (P.G.) College
Budaun
&
Deepa Gupta
Asst. Professor
Department Of Management Studies
IILM - Academy of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
&
Mukul Gupta
Asst. Professor
Department of Management Studies
IILM - Academy Of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
 

Source: E-mail May 16, 2006

     

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