The impact of performance management

Overview

The impact of performance management in the human resource system in any organization plays a consistent determination on defining the success on the company's ability to reach their corporate goals. Huselid (1995, p. 635) indicates the importance of human resource management policies and practices as influencing factors critical to the performance of the organization in various fields involving human relations; industrial relations; and industrial and employment psychology. Many corporations engage in international businesses, making it more difficult for them to implement a uniform policy with their human resource management considering the geographical boundaries involved. However, there is one company, the DMG World Media, engaged in home and consumer shows business that was able to implement a performance management system that allows them to surpass the boundaries and hindrances commonly encountered with international human resource management. This paper will present the company's own initiative of conquering common problems that most international business organizations failed to address in their management in human resource management. International business expansion allows for better trade among entrepreneurs. It gives bigger opportunities to cover various areas of trade in the world thereby increasing the productivity of an organization. It also allows them to tap varied talented employees of cultural diversities. However, poor management in the human resource can take the peril of poor quality productivity among the employees who are considered to be the pillars of any corporate organizations. Staffing is an important aspect of human resource management where proper hiring is done through the selection of competent and skilled workers. Harzing and Ruysseveldt (2004, p. 252) identifies the process of expatriation as a part of international staffing where managers are transferred from one country to another. Perhaps it is one of the several forms of strategies that could settle the issue of international human resource management where managers are tapped to serve various service centers of the organization to find where they are best suitable to work for in terms of performance value. This is an essential value of incorporating performance management that the DMG World Media have successfully exploited to help manage their human resource production and services that best support the company's productivity goals and vision for growth. This paper will show how DMG was able to survive against the challenge of running an international human resource management through the value of performance management that brought success, order, profitability, and productivity within their business organization.

Body

DMG World Media is an international company exhibiting home and consumer shows. Although they are not a multi-million asset-based company with employees of less than 1,000, they have remarkable record in terms of its own human resource management system. This system mainly revolves on the performance management approach which gives weight to employee performance as the vital pillars of their business success. Bacal (1999, p. 13) states that performance management poses a challenge to many corporate managers for varied reasons. One is their opposition to the company's policies and procedures. Second, they are quite intimidated that the process could cause irate among the employees and they are placed in an unpleasant situation like having an argument with them. Third, they refuse to invest time and effort to monitor employees' performance and provide feedback to the company on what areas needs to strengthen in the management of their pool of workers. The DMG World Media was able to directly confront the issue by simply looking for individuals who are goal oriented and are willing to exert the effort in the performance of their duties. The executive vice-president of DMG World Media proudly states that all of their rank and file employees come from diverse cultures from various parts of the world and yet they found an effective way of counteracting the common predicaments of managers in observing the performance management principle. Their mere selection of persons who are fit to become managers in terms of choosing groups of workers who are highly motivated, and those who understand the business and their customers well help them solve the attitude problem factor within the organization managers and employees.

Dransfield (2000, p. 69) provides the definition of Michael Armstrong on performance management as a process tailored to improve the organizational, team, and individual performance that which the managers have the responsibilities of providing a driving force to motivate them. The DMG World Media capitalizes on choosing managers who are trained to understand the meaning of their business, to have better understanding on their role as ministers of the new performance management adopted by the company which they called the Open Exchange. It is the company's constitution that embodies common principles for human resource management observed from the parent company to other companies that stems from it worldwide. It instills to the managers that they are the leaders in their field and with great confidence passes the same motivational strings that extends to other members of the organization. The main essentials of the fundamental policy of the performance management imbued within the DMG's organizational structure are the implementation of the regular reviews of employee and managers' performances. Armstrong (2004, p. 15) explains the concept of performance management with the purpose of creating a shared vision of the goals of the organizations. It is a concept that helps individual employees in recognizing their role in contributing to the success of the organization where they belong. He also presented that there is the caveat for this system of human resource management is it being a rigid, top-down imposed system hence he implied that performance management should not be regarded as a system but rather a flexible process. Managers need to apply a revolutionary process with greater flexibility when managing subordinates. Nevertheless, he suggests that performance management in an organization should be a balanced process that must be focused on future planning and improvement of performance than being a retroactive process; that the capabilities and skills of each member of the organization must be recognized; adopt a more coaching and counseling type of appraisal; with a more definable objectives of the organization that will strengthen the significant contribution of employees; and no forced distribution of performance ratings to avoid the win-lose scenario. In these respects, the DGM's human resource management deals with the negatives of their employees outside the appraisal process in their organization while the positives are being well documented. They give high regards on the contribution of their workers and the team efforts between their managers and subordinates. Although their employees are dispersed from different countries, there is no diversification among them as they were taught how to value their company's goals, understands their contributions as being part of the company as they share a common personality and common organizational cultures.

One can notably indicate that the DMG adopts an appraisal system that is different from the traditional systems observed by other companies. As mentioned earlier, they do away from the negatives with their appraisal system and give more weight by documenting on the positives. Most companies dwell more on the negative aspects of the employee performance which often demoralizes them from efficient performance of their duties. DMG however provides better reinforcement in terms of the positive performance of their employees and move forward to planning a more effective performance management of their staff.

Harris, Brewster, and Sparrow (2004, p.113) indicates that the heart of human management is effective communication. It fosters better commitment, satisfaction, improves team work and internal control, and promotes better collaboration between stakeholders. They further stated that maintaining the communication between the administration and employees is the role of managers. It is part of international human resource management that most organizations have difficulty of implementing. The management weakness is bound on the failure of its managers to establish the implementation of a uniform policies and culture among their workers which will be on the same path of direction which the organization is taking in reaching their goals. DMG media, in terms of evaluating employee performance, implements a policy of screening the productivity of their employees on per event basis instead it being an annual event. They always hold on to this principle in their belief that with this kind of process underperforming employees are pressured to improve their performance and are compelled to confer with their managers regarding any problems they encounter that hinders them to perform well with their duties. This continuous process done per event instead of annually allows the organization to monitor and act promptly in addressing poor performance of employees.

Rao (2004, p. 108) reiterated the importance of implementation of an appraisal system in the human resource department, it being a valuable tool in bringing the employees' attention to the organization's objectives. It involves gathering important data on the employee's performance rating, a mid or half-year analysis of performance data, review of action plans and achievements of employee. It also gives way for an opportunity to review performance standards of each department and to gather data that could be used for evaluating trends in improving performance. This process allows the human resource management to identify whether the employee is fit for the job they are assigned to perform and to implement job rotation when needed, delegate specific duties that suit the qualification of the employee, grant awards and merits of promotion to high performing individuals as a motivating factor. The DMG organization did not run short in implementing these suggestive factors of valuing communication and using the appraisal system as a channel by which managers get to understand and know the capabilities of their employees and help them find positions that will allow them to perform better.

Armstrong (2007, p. 500) provides a clear distinction between the performance appraisal and performance management. In his views, performance appraisal involves formal rating by managers to employees while performance management is a wider, more continuous process and a natural process of management that promotes the mutual expectations between the organization and employees. Performance appraisal has been discouraged as it presents a more bureaucratic system that focuses more on the mistakes and shortcomings of the employees and exercises a rigid management control. Generally, the difference between the two systems of analyzing performance within the organization is that in performance management, a dialogue exists between manager and employee rather than being a top-down assessment, and ratings are seldom used in assessing the performance of employees in performance management. It being a flexible process, documentation is seldom performed rather it focuses on directing the issue towards reaching the goals and objectives of the organization. DMG has successfully adopted the performance management process in their international organization, allowing their managers to implement it throughout the various branches of their company worldwide. It thus result to a positive response of identifying employee's weaknesses and strengths that allows managers to re-align job assignments of workers that best suit their skills. Rothwell (2001, p. 185) describes the relationship between performance appraisal and performance management. The former focuses on the past performances of employees in deciding for grant of promotions, incentives, and job changes, while the latter involves the work environment and the effects of work to the performance of the employee. It is more future-oriented where any discrepancies of the past are addressed and focuses on providing remedy in the future. It is not a general rating system but rather indicates the problems point by point through a one-on-one communication among managers and subordinates. The DMG obviously capitalizes on their employees' skills. They know that the effective way for their employees to be performing better is placing them with the right kind of job to perform. Rothwell stated that adopting a creative pool of workers involves consideration of their competencies and placing them at the right job which is a principle adopted by DMG.

Mathis and Jackson (2008, p. 352) noted that managers often have predicaments in the implementation of evaluation to employee performances. Managers identify their roles as being coaches of employees and in assisting them to improve performances, the part of rendering judgment often makes them deal with internal conflicts. Employees in turn often despise the result of the appraisal and the recommendations rendered by managers. That is why performance management is better than implementing an appraisal rating that could be biased at times as it allows better communication between the manager and employees and together let them resolve conflicts by establishing an action plan that will help resolve common conflicts and hindrances that will help the employee improve their performance for future endeavors. Fluss (2005, p. 93) identifies the potential of performance management as a solution to facilitate the needed changes in the organization's employees, different departments, and various corporate levels putting emphasis on the success of such through "institutionalized culture." The success of the organization depends on consistent re-evaluation which involves a dynamic process. Dowling, Festing, and Engle (2008, p. 283) state that multiple ratings such as the 360 degrees feedback may be used in domestic context while considering that it should involve a team of evaluators. The involvement of multiple evaluators will help in addressing the cross-cultural complexities involved in the performance of international assignments among employees. Surveys show that for rating expatriate performances, it requires multiple raters that are usually composed of a manager based on the host country, the self rater (employee), and the human resource manager of the host country. Authors thus believe that the use of multiple raters is the most effective means of conducting an accurate assessment of performance. However, the use of the 360 degree feedback to be used in the international context may be limited by the availability of trained and knowledgeable raters. Eckerson (2006, p. 19) identifies two important structures in the performance management architecture namely business and technical aspects. The business aspects involves the strategies and policies used by the organization while the technical aspect involves a metric system that defines the needed data to collect and how they should be calculated. These metrics dictate how organizations monitor, measure and manage an effective strategy for the organization. With the broad parameters involved, the key for a successful performance management is the identification of the major needs of the company to prosper with their employees to narrow down their concentration of strategy applications. DMG usually opt for training employees who need major improvements in their performance. They also value the importance of job placements according to the qualification of the employees. The adoption of performance management helped an international company such as DMG in the management of its employees from different countries through the integration of a uniform policy on evaluation and imposing a uniformly implemented work cultures among them that optimizes the employees' performances.

Recommendations

Because human resource management plays an integral role in the performance of the employees, which in turn can affect the success of any organization, it is recommended that a thorough and accurate management of systems must be identified that will be beneficial to both the organization and its workers. It is the human resource management's responsibility to identify the unique needs of the organization and how to handle common conflicts that must be addressed to prevent downfall on the performance of their employees. The adoption of the 360 degrees feedback can be internationally beneficial if the organization could tap competent raters as it involves the evaluation of cross-cultured employees. The 360 degrees program used to be domestically applied but its application for international human resource could benefit an organization if they aim to target the implementation of a uniform corporate standards and policies. But it is recommended that the human resource management should also adopt multiple raters to engage with the evaluation of employee performance, as also recommended by some authors of literatures involving performance management, to be able to address the need to counterbalance the possibility of biased judgment.

Conclusion

This author concludes that performance management in international human management is a valuable tool to address common conflicts and problems that add to the detrimental effects of running an international-based company involving cross-cultured employees. There is no hard and fast rule that will help companies project better output in the performance of their employees but DMG evaluated the needs of the company and capitalizes more on a face-to-face performance evaluation system. It helps the managers understand the performance of employees better without the apprehension of the common negative effects of the traditional rating system. The flexibility of their policy in terms of meeting the needs of the organization and that of their employees as well allows them to cover more substantial areas that were address efficiently that helps in the success of their company. It is therefore conclusive, based on the projected outcome of the performance management system used by the DMG company, that placing the right employees to function for a specific duty that is in line with their expertise and qualification is the key for a more productive performance. It also made the author realize that there is a positive psychological effect to the employees when you offer them more motivating ratings than to dwell on implementing a bureaucratic manner of appraisal system that gives more weight on their poor performance rather than being future-oriented manner of evaluation. Performance management allows managers identify their role in assisting employees to reach the goals and objectives of the company, while employees are given the chance to air the problems they encounter with their work and gives them better opportunity to provide feedback to the managers whether they are comfortable with the duties and responsibilities involved in line with their area of specialization. The imposition of a common work culture and policies is a part of a successful international human resource management. DMG proves that flexibility in their policies allows more room for gauging the needs of their employees, whose needs and problems are unique and distinct from each other. Thus, a performance evaluation allows an organization to evaluate, re-evaluate, construct applicable strategies, and implement them to meet the changing demands of employees' needs to perform their duties more efficiently. This author further concludes that this form of management allows better interaction among managers and employees that gives the latter's role importance as part of the organization. This in turn gives a positive effect in the performance of duties.

References

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