Managing People in Organization: Performance Management
1. Organization
1.1 'Definition'
Organization, by definition, is a group of people with a shared purpose either in business or in government. In today's world, as the economies of different countries progress, many organizations are set up by people in order to achieve a certain goal collectively such as sustainable development in order to create a better future for the next generation. It is imperative that the organizations take into account the actions they do today to avoid ramifications of their actions in near or remote future, and the decisions are, in the end, taken by the people who run the organization
1.2 Types
1.3
.
Every organization has different departments ranging from human resource, finance, marketing, sales, operations which are run by people. Each and every department is closely linked with one another in order to run the business smoothly and optimize its efficiency. Therefore, in order for the organization to attain its optimum potential and work efficiently, it is essential that people who run the organization should work in harmony. The goals of the organization can be achieved if and only if all the departments work effectively, efficiently and in collaboration with each other towards achieving the goals. The bigger the organization, the larger the number of employees it has to manage to generate output and meet its goals. Hence, it is essential that managing people in such a large organization should be efficient enough which leads to fewer conflicts and less friction in the organization so as to ensure smooth flow of the work leading to a collective result. Therefore, it is imperative that the organization creates an environment which is conducive to the efficiency of the employees. It is possible only if the employees are rewarded and appreciated for the contribution they have done towards the project within the organization. This is possible only if each and every employee's performance is reviewed on a timely basis by their superiors and line managers depending upon the size and the structure of the organization. Larger companies have a complex hierarchy wherein each and every employee is reviewed by their superiors at different levels of the hierarchy in the organization, whereas, smaller companies have a smaller hierarchy in which employees are reviewed by the CEO of the company. This process is a part of 'Performance Management' which is an essential tool for the evaluation of the staff in an organization.
Organizational Hierarchy Reporting
Organization ' Functional ' Individual Scorecard
Performance Management System
'Performance Management' is one of the most effective methods of reviewing and evaluating the performance of employees which, when channeled in the right direction, leads to the achievement of goals of the organization. An appraisal, which is a part of performance management, can be reviewed in different ways over a different time frame. Certain companies prefer to review employees over a span of three months to over a year as per the human resource policies defined within the company. Shorter goals would mean frequent assessment of the employees in the organization. Broader goals would mean assessment of the employees after a certain period of time. Therefore, we can conclude that the performance management system is a method which is 'result-oriented'. It helps in assessing the output of the employees after a brief interval of time combined with the task assigned in that particular time-frame.
The salient features of performance management system are:
' The shift to performance orientation.
' AOP is the Performance driver
' AOP is translated into goals and measurable targets
' Goals and targets are mutually agreed
' Performance is measured- on the actual achievement of goals and attitudinal skills displayed
' The basis for annual increments and rewards.
The Performance Management system can be classified into:
' Planning- Setting performance expectations.
' Development- Capability enhancement.
' Monitor and Review- Performance measure.
' R&R- High Performance.
Three main areas of PMS:
' Performance on Goals and Values & Beliefs will individually assessed at 100%, which will be converted to:
' Goals will carry ' 70%
' Values & Beliefs -30%
' Training Needs Functional and Behavioral
' Strengths/Areas of Improvement
Performance Management cycle:
To conclude, the performance management system is usually result oriented as opposed to the process called 'Balance Scorecard'.
Translating Strategy into Action
The process of developing a good Balanced Scorecard gives an organization, most often for the first time, a clear picture of the future and a path for getting there
As the critical transition from vision to action begins, the real value of the Balanced Scorecard is experienced
PMS is based on the Balanced Score Card
Financial Customer
Learning & Growth Internal Processes
Balance Scorecard
Balance scorecard is the predecessor to the process of Performance Management method. Every company has a vision, a statement and a strategy which it abides by, and follows it with due diligence. Balance scorecard gives momentum to the vision and the strategy of the organization. It helps in defining the vision of the company and gives clear-cut goals and objectives towards achieving the same.
The salient features of Balance Scorecard:
' It helps the organization to quantify the Vision into Goals and measurable objectives
' It clarifies Strategy and if a Strategy is lacking, the process evolves a Strategy
' It makes sharing and consensus across the organization essential, it is a great team-builder
' It requires the organization to have a detailed action plan that will deliver the Goals
' It promotes feedback loop & learning and allows corrective action
' It highlights critical processes for breakthrough performance
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