Essay Example on Maximizing Performance to Achieve Excellence & Profits in Organizations

Introduction

Organizations base their excellence and profit maximization on general performance. When performance is weak, then it implies that a business is not following the right trajectory. When it excels, it is an indication of excellent management as well as supporting the correct path. One of the critical aspects that need to be noted is that there are several issues that an organization's management faces regarding performance. Several organizations fail to achieve their original goals because of the inability to motivate employees to perform better and deliver as per set objectives. Performance management plays a significant role in organizations because managers use it to align company objectives with teams of employees in a bid to heighten productivity, effectiveness, and profitability. It follows a guideline that stipulates the activities to be done and results in the expected form of each employee. Through the performance management guidelines, appraisal of employees is done to ascertain the delivery of the set objectives. The discussion will, therefore, define the meaning of performance management as it explores the issues revolving around it.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Concept of performance management

Performance management refers to the process of ensuring that the laid down activities and results meet the organization's objectives most appropriately. The essential element is effective communication between a manager and an employee so that there is maximum support towards the achievement of set goals. Performance management revolves around the organization itself, the employees, and the departments. When an organization effectively manages its performance, there are a couple of benefits it reaps. Some of the benefits include; Direct monetary achievement, which entails gradual growth of sales, elimination of any task overrun. Another advantage is highly motivated employees, which results in improved engagement in the organization's projects, increased transparency, and great confidence at work. Besides, it also leads to better control, planning, directing execution of other management functions.

Most Prominent Types of Performance Management Plans

There are several performance management plans, and they include; comparison system, trait system, 360-degree feedback, behavioral system, goal-oriented system, and grading and checklist. According to the comparison plan, the method compares the performance of one employee to that of the rest in the team. It is the most systematic because it uses comparison based on the return. It is ideal when only one employee is supposed to be promoted as each of the employees is graded and ranked against the rest based on set parameters. The trait plan focuses on the attributes portrayed by an employee. The supervisors rate the staff based on the rates they depict, for instance, reliability, honesty, teamwork, punctuality, support to others, and keenness in following instructions, among others. Several trait checklists contain simple features with ratings such as Very good, Good, average, need improvement, to mention but a few. It is one of the traditional performance management plans and can be affected by a supervisor's biasness, therefore, making it unfair times. Most employees may end up with satisfactory, and this puts them on average and limiting full exploitation of the real picture.

Additionally, in the 360-degree feedback plan, the employer is required to investigate customers, co-workers, supervisors, and even the subordinate about an employee and get feedback from them regarding behavior and actions of the individual. It one of the most reliable because various sources are giving their different opinions, and therefore the chances of having biased feedback are meager. It is advantageous because it allows the employee to set objectives and visions for self-development, which is not only a benefit to them but also the organization. There is also the focused behavioral system that measures the performance of an employee by basing it on specific codes of behavior. It utilizes different scales that use parameters to rate the individual, for instance, either excellent or poor. For example, the graphic level slides from unique to poor. Those who perform the best are at the top of the graph, while the ones with poor ratings are inclined towards the lower part of the chart. The average performers are in the middle of the figure, where the curve is not high and also not so small.

The grading and checklist is also a performance management plan where the grading system uses letters ranging from A-F. The people who perform well are rated with the letter A and the worst with letter F.; On the other hand, the checklist uses questions that answer either yes or no. It can be ineffective because there are average performers who are working towards being excellent.

Comparing the Impact of the Plan on Organization and Employee. The impact the plans create on the organization can be both similar and different depending on various factors. One of the effects is that it helps an organization as well as the employee to set goals and work towards a given trajectory to achieve them, and this brings fulfillment to both when completed. Another impact that is similar to both the organization and the employee is that through the performance plans, growth is stirred because weaknesses and strengths are identified. The two will work towards improving their areas of weaknesses and then maintain their advantages. Similarly, in both, if the performance management plan is not done effectively, it can give false indicators leading to wrong decision making. On the contrary, there are differences in the impact created to and individual and the organization. To the company performance management plan can lead to restructuring while to an employee, it can lead to termination or resignation if the results are not satisfactory.

Relationship Between Performance Management and Compensation. The relationship between performance management and compensation is symbiotic because one is dependent on another. One thing, however, is that it is a complex correlation because it is difficult to predict how one might affect the other. When people are compensated or promised compensation, they tend to improve their performance. In this regard, payment is one of the tools that can be used by performance managers to help employees work hard towards achieving an organization's goal. However, money is not the only factor that can help in motivating employees. According to Hertzberg's two-factor theory, compensation is a hygiene factor, and this brings satisfaction to employees, not necessarily driving them. Therefore employees can be compensated and still fail to perform as expected.

Factors That Should Be Considered When Successfully Implementing Performance Management within an Organization

One of the factors that should be considered is the establishment and use of a useful rating scale that can be used to appraise employees. When a sound rating system is developed, then it will help in reflecting the actual state of an employee as well as an organization. Besides, an organization should consider the use of a forced distribution system, which allows it to compare the performance of one employee to others to create harmony and strike a balance. Additionally, the managers doing performance management should have the right skills needed to conduct the process. They should be aware of the company's objectives and also have the right skills, which entail coaching, performance appraisal, goal setting, and development planning. Another factor to consider is the presence of multitier feedback in the organizations which help in getting feedback from all the concerned parties, for instance, customers, employees, and supervisors, among others.

Conclusion

In conclusion, it is essential to note that performance management is a critical process because it helps the company to align its objectives with the role to be played by each employee. It allows an organization to realize the strengths and weaknesses of its employees and help them improve in one way or another. Great performance plans such as comparison system, trait system, 360-degree feedback, behavioral system, goal-oriented system, and grading and checklist will an organization get the accurate picture and take the necessary steps towards improvement.

References

Berkeley. Edu (n.d). Performance Management: Concepts & Definitions https://hr.berkeley.edu/hr-network/central-guide-managing-hr/managing-hr/managing-successfully/performance-management/concepts

Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review, 93(4), 40-50.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2015). Human resource management. Instructor, 2015.