Performance management

Introduction:

In order for any organization to prosper, it is essential that proper systems are implemented to assess the worth and value of its key resource; its employees. It is of prime importance that impartial evaluation is carried out for each employee and according to the results necessary actions are then taken (Bass, 2005). These evaluation systems are often specific to each organization and so is the case for the Manufacturing industry. This paper is an attempt to explain Performance Management, specifically performance appraisals as a human resource strategy and discuss how its successful implementation could be utilized to assess the need for training among the employees of steel manufacturing sectors in India. For the purpose of understanding, appraisal is defined as the process of occasionally reviewing an individual's performance against the different fundamentals of one's job (Armstrong, 2000).

Background:

Since performance management is a subset or a function of human resource management (HRM), it is important to first understand HRM itself. HRM is defined as a function inside the organization that emphasizes on staffing, management and providing overall administration and directions to the people who are employed there. It is usually done by line managers (Gronfors, 2003). It also deals with issues pertaining to compensation, planning for development, employee motivation, safety and well-being of employees, ensuring proper communication, training and performance management (Gronfors, 2003).

Research to establish the link between HRM activities and service behavior has implications not only for academic research but for managers. Firstly, it emphasizes the need for management to focus on their HRM practices to play a strategic role in establishing a reputation of service excellence for their organization (Gronfors, 2003). Managers need to recognize that the responsibility for the effective utilization and management of human resource processes and systems is their responsibility and not that of the human resource department. Secondly, that it is as important to manage both external and internal relationships (Bartol, 2004). This means managing the level of service provided to customers and at the same time managing relationships with employees. Both the external and internal relationships are interlinked (Pinnington, 2000). It is this fundamental understanding that human resource management plays a critical role in creating and sustaining service excellence which will give an organization the competitive edge.

However, performance appraisal is a human resources assessment technique used to measure the work effectiveness of an employee by using objective criteria. The information obtained through performance appraisal provides foundations for recruitment, selection, training and development of existing staff, and motivating and maintaining a quality work force by adequately and properly rewarding their performance. It hopes to achieve higher productivity outcomes by delineating how employees meet job specifications. Whereas post appraisal training is specific training recommended based on outcomes of appraisal to enrich the potential of the individual employees in an organization.

Primary rationale behind choosing 'Performance Appraisal' as my dissertation topic is due to its two important purposes, they are evaluative and developmental. Firstly, it plays a significant role in measuring individual contribution towards organization development and secondly, its momentous role in identifying training needs among appraised employees. Moreover, in the contemporary business era, all stress is on the resources and for any organization; its staff are the most principal resource.

Review of literature:

History of management reveals that performance appraisal systems initiated as simple tools to justify income (Bass, 2005). Appraisals were used as a benchmark to justify whether an employee's salary was justified or not. As a result, the method of appraisal was aimed to provide material results only. If an employee was found as an under-achiever he or she would bear a demotion and if found to be meeting targets and performing as per the set criteria, he or she would get an increment. Nonetheless, little or no consideration was given to the growth or developmental aspects of employees. Hence material benefits were the only source of motivation for the employees to perform well (Bass, 2005).Though this appeared to be enough motivation, in reality it was not.

Performance Appraisals are that feature of administrative control which time and again tends to be ignored by organizations (Pinnington, 2000). Nonetheless, it remains a central feature in improving the overall prosperity and effectiveness of the organization and hence its importance cannot be undermined. It can be defined as an organized and formal way of interaction between a manager and his employee, which often takes the form of an annual or even semi-annual meeting/interview, in which the work performance of the employee is discussed and evaluated, with a focus to recognize his strengths and weaknesses together with opportunities for development and growth (Reger, 2004).

Employees are the key asset for any company and this main resource requires more than just material boosts to continue its performance (Gronfors, 2003). Assessing employee performance is a major responsibility of the managers. In manufacturing settings, performance appraisals are a key method that offers documented review and feedback on the level of achievement or performance of individuals. These appraisals help in deciding on future employments, increments, perks, but most of all they facilitate better and effective communication between employees and their managers. These appraisals then become an important part of the employee's record and have significant influence in their future growth (Beardwell, Holden 2007).

However, the main aim of the entire exercise of performance assessment is to improve the employee in area where he/she lags behind. Thus the post-appraisal trainings are designed in such a way that they attain a few aims. The foremost amongst them is to give the employee a fair idea of his/her standing in the organization, Next is to enable them to perform better in future by explicitly stating their responsibilities, then to help plan their career growth and last to improve the relations amongst the higher and lower hierarchy of the organization by offering channels for communication (Porter, 2005).

Having stressed upon the importance of performance appraisal systems, it is also important to recognize that an ill-designed or poorly implemented appraisal system can be detrimental to the employee and in the long run for the organization. It is essential for managers to understand the impending consequences of failing to fairly administer employees' performance (Beardwell, Holden 2007). It is crucial that managers are able to clearly and willingly articulate their expectations and provide utmost support to their employees in attaining those goals. This ensures a productive and professionally present real and well-documented appraisal system; one that ensures productivity of the performance evaluation system and hence protect the company from legal liabilities also (London, 2001).

Employee performance can be seen as a key intervening variable through which HRM practices could have an impact on priorities and competitiveness of an organization (London, 2001). Views on leadership have changed substantially over the past centuries, particularly in the past few decades, but the mark of a great leader remains the art of balancing people and self. Research shows that the leader's role in a business is to accomplish goals and objectives through employees (Porter, 2005). In order to achieve this, the leaders must be triumphant in motivating employees. The practice of motivation and theory are two difficult subjects, touching on several disciplines. Motivation in most workplaces is poorly practice and for one to value motivation it is critical to understand human nature itself (Beardwell, Holden 2007). In simple terms employee motivation can be best defined as the complex force, requirements, drivers or any other such procedures within the working staff that will ensure voluntary involvement from within and create an environment of achievement and accomplishment of personal targets. Along with motivation comes the concept of incentive, appraisals, rewards and expectations.

Research Questions:

  1. To assess the role of performance appraisals in motivating employees?
  2. How to utilize the performance appraisal process to meet the organization targets?
  3. To devise measures to enhance employee potential through structured post-appraisal training.

Methodology:

The foundation of a research study is built over the structure with which it is conducted. This structure is called the research methodology (Remenyi et al. 1998). Buckley et al. (1975), state that a valid research study utilises an appropriate research methodology. Hence, it is critically important for a researcher to choose the methodology of the study with great care and thorough understanding of the intricacies involved (Amaratunga et al. 2002).

The sample for the proposed study includes both employees and managers of JSW Steel Ltd., (India). The researcher intends to employ opinions of leaders from JSW Steel Company so that a significant number of participants can take part in the study in leaders has not been specifically studied before. Outsourced employees will not be a part of this study as they are not involved in the process of structured performance appraisal.

For this proposed study, the researcher has taken considerable thought before deciding about the methods to be employed. The researcher studied the Process Onion (Saunders et al. 2003) in detail and decided on using phenomenology as the research focuses on discussing the phenomenon of leadership qualities. Using phenomenology, the researcher has determined to employ qualitative approach for data acquisition as well as analysis. Employing qualitative methods will ensure determination of the underlying themes in the collected data in order to develop theory, which is the fundamental purpose of research studies using phenomenology and qualitative approach.

The researcher has determined to develop a semi-structured interview questionnaire which shall be used for acquiring primary data. Qualitative methods have been successfully employed by scholars in studies focused on determination of performance appraisal standards (Bryman et al. 1996; Gardner and Lowe 2000). Using semi-structured interview questionnaire shall allow the researcher to provide the participants with sufficient room and time to revive their memories and their ideas about the answers sought for the studied. It will also give the researcher the ability to direct the interviews in the desired direction but with considerable freedom for the participants.

The interview questionnaire would be designed to be in line with the research questions of the proposed study, which have been stated above. The questions included will be designed to encourage the participants in providing their opinions regarding appraisals, especially with regard to its impact on motivation in workplace and training. Collected data data will be coded and analyzed to identify and explore patterns

The validity of the proposed research would depend on the design of the instrument. It is considered fundamentally important by the researcher that the instrument designed should be in line with the research questions as it would make the instrument and the responses collected by it valid. The matter of reliability and generalisability of qualitative studies is complex. Due to the subjectivity of opinions a change of sample may result in a varying set of responses (Stake, 1980). However, Adelman et al. (1980) believe that if the findings of a qualitative study are considered individually for generalization, they can be applicable to the field of study the research is devoted to.

Throughout the secondary research, care has been taken while using authentic words and authentic references. As mentioned, considerations were made during literature review, which presented a reliable literature review. While during the primary search two considerations were of highest importance. The personal information of one who responds is kept safe and is not revealed to anyone except the researcher who keeps this information until the completion of this research. And the information will be demolished upon the approval and publication of the research.

Project Plan:

  1. Introduction and background.
  2. Engagement with the literature/literature review.
    • Performance appraisal.
    • Post appraisal training.
  3. Company profile - JSW Steel Ltd., (India).
  4. Methodology
    • Methodology and data collection (Interviews).
    • Arrangement of data (Process of encoding and decoding).
  5. Analysis and interpretation.
  6. Conclusions and recommendations.
  7. Appendices, references and bibliography.

References:

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  • Amaratunga, D. Baldry, D. Sarshar, M. and Newton, R. (2002). Quantitative and Qualitative Research in the Built Environment: Application of "Mixed" Research Approach. Work Study. 51 (1), pp. 17+.
  • Armstrong, Michael (2000). 'Performance Management: Key strategies and practical guidelines'. Lonon: Kagon Page Limited.
  • Bartol, Kathryn M (2004) 'Performance appraisal: maintaining system effectiveness, Public Personnel Management'. (Publishers name was missing).
    • Bass, B. M. (2005). 'Leadership and performance beyond expectations'. New York: Free Press.
    • Beardwell and L Holden (2007), 'Human Resource Management: A contemporary perspective', (2nd edition). London: Pitman.
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    • Gronfors, T. (2003) 'Performance Management: The Effects of Paradigms, Underlying Theory and Intrinsic Processes. Vantaa: Facile Publishing.
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    • Porter, L. W., Lawler, E. E., & Hackman, J. R. 2005. 'Behavior in organizations'. New York: McGraw-Hill.
    • Reger, R., Gustafson, L., Demarie, S. & Mullane, J. (2004) 'Reframing the organization: why implementing total quality is easier said than done', The Academy of Management Review, 19, pp. 565-584.
  • Remenyi, D., Williams, B., Money, A. and Swartz, E. (1998). 'Doing Research in Business and Management'. London: Sage.
  • Saunders, M., Lewis, P. and Thornhill, A. (2003). 'Research Methods for Business Students', (3rd edition). London: Prentice Hall-Financial Times.
  • Stake, R. (1980). 'The Case Method Inquiry in Social Inquiry. In Simons, H. (Ed.). Towards a Science of the Singular'. Norwich: CARE.
  • Gantt Chart Project, google.co.in, URL: http://www.irc.gmu.edu/resources/findingaid/TAC_Visio/PDF/Gantt%20Chart%20Project.pdf (Accessed on 18th April 2010)

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