RESEARCH

PERFORMANCE IMPROVEMENT
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Performance Improvement

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TABLE OF CONTENTS

[Link]
2. PAST SCENARIO
[Link] SCENARIO
[Link] ANALYSIS
5. ESSENTIALS REQUIRED
[Link]

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Introduction

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Performance improvement

Performance Defined

Performance is a measure of results achieved. Performance efficiency is the ratio between

effort expended and results achieved. The difference between current performance and the
theoretical performance limit is the performance improvement zone.

Performance improvement

It is the concept of measuring the output of a particular process or procedure, then

modifying the process or procedure in order to increase the output, increase efficiency, or
increase the effectiveness of the process or procedure. The concept of performance
improvement can be applied to either individual performance or organizational performance.

At the operational or individual employee level,

Performance improvement usually involves processes such as statistical quality control.

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At the organizational level,

performance improvement usually involves softer forms of measurement such as customer

satisfaction surveys which are used to obtain qualitative information about performance
from the viewpoint of [Link] way to think of performance improvement is to
see it as improvement in four potential areas. First, is the resource INPUT requirements
(e.g., reduced working capital, material, replacement/reorder time,and set-up requirements).
Second, is the THROUGHPUT requirements, often viewed as process efficiency; this is
measured in terms of time, waste, and resource utilization. Third, OUTPUT requirements,
often viewed from a cost/price, quality, functionality perspective. Fourth, OUTCOME
requirements, did it end up making a difference.

Levels

Performance improvement can occur at different levels:

 an individual performer(through performance appraisal)

 a team
 an organizational unit(through TQM)
 the organization itself(through BENCHMARKING)

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Performance Appraisal

Performance Appraisal, also known as employee appraisal, is a method by which the

performance of an employee is evaluated (generally in terms of quality, quantity, cost and
time). The roots of performance appraisal can be found in Frederick Winslow Taylor's time
and motion study. Performance appraisal is a part of career development.

Performance appraisals are a regular review of employee performance within organizations.

Generally, the aims of a scheme are:

• Document criteria used to allocate organizational rewards.
• Facilitate communication between employee and administrator.
• Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc.
• Give feedback on performance to employees.

• Identify employee training needs.

• Provide the opportunity for organizational diagnosis and development.
• Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.

A common approach to assessing performance is to use a numerical or scalar rating system

whereby managers are asked to score an individual against a number of objectives/attributes.
Employees are also allowed the opportunity to assess the person (manager) at the same time.

Total Quality Management (TQM)

Total quality management is a management strategy aimed at embedding awareness of

quality in all organizational processes. TQM has been widely used in manufacturing,
education, government, and service industries, as well as NASA space and science
programs.

Total Quality provides an umbrella under which everyone in the organization can strive and
create customer satisfaction at continually lower real costs.

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Definition

TQM is composed of three paradigms:

Total: Involving the entire organization, supply chain, and/or product life cycle

Quality: With its usual Definitions, with all its complexities (External Definition)

Management: The system of managing with steps like Plan, Organize, Control, Lead, Staff,
provisioning and suchlike[citation needed].

As defined by the International Organization for Standardization (ISO):

"TQM is a management approach for an organization, centered on quality, based on

the participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society."

One major aim is to reduce variation from every process so that greater consistency of
effort is obtained. In Japan, TQM comprises four process steps, namely:

Kaizen – Focuses on "Continuous Process Improvement", to make processes visible,

repeatable and measurable.

Atarimae Hinshitsu – The idea that "things will work as they are supposed to" (for
example, a pen will write).

Kansei – Examining the way the user applies the product leads to improvement in the
product itself.

Miryokuteki Hinshitsu – The idea that "things should have an aesthetic quality" (for
example, a pen will write in a way that is pleasing to the writer).

TQM requires that the company maintain this quality standard in all aspects of its business.
This requires ensuring that things are done right the first time and that defects and waste are
eliminated from operations.

Benchmarking

It is a process used in management and particularly strategic management, in which

organizations evaluate various aspects of their processes in relation to best practice, usually
within their own sector. This then allows organizations to develop plans on how to adopt
such best practice, usually with the aim of increasing some aspect of performance.
Benchmarking may be a one-off event, but is often treated as a continuous process in which
organizations continually seek to challenge their practices.

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PROCESS

The process for Performance Improvement is:

Design- to develop a plan that is thought to improve a process

Measure-to collect information (data) that will allow us to compare what we used to do
with what we believe to be an improvement.

Assess- we review the data to determine whether the change we have made is only a change,
or an actual improvement.

Improve-based on our assessment of the data, we continue on the cycle with making
changes again which we think will get us further improvements.

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PAST SCENARIO

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The past decade saw a plethora decade where managers were urged to promote teamwork
through reward systems and new organization forms, to pay for performance, to train
managers and staff in “total quality” principles, to deploy cross-functional teams, to re-
engineer core business processes, to return to value-based management fundamentals, to
adopt the Baldridge criteria, to foster and reward continuous improvement, to implement
“balanced scorecards,” to derive and use customer-driven performance measures, to
benchmark these measures, and to employ all these strategies while downsizing,
outsourcing, simplifying, and producing just-in-time results. No manager could afford to
employ all these programs. Some management improvement protocols that extolled
simplification, streamlining, clarity, and accountability became obese, rigid, and even
Bureaucratic, violating their own precepts. The streamlining agenda needed a dose of its
own medicine.

Conscientious managers had little objective information to enable them to choose from an
array of rapidly promulgated ideas. “New” management ideas were backed by little
verifiable data demonstrating their efficacy. Many ideas were superbly presented not only in
print but also by consultants who polished and added pricey legitimacy. Most new methods
were promoted without attacking other strategies, but with a dogmatism that implied the
superiority of new theories over their antecedents and competing models. Anecdotal
evidence was used to extol new methods of organizing, managing, and rewarding people,
buoyed by rising optimism about the productivity and competitiveness of American
industries.

However, the thoughtful manager could find little evidence about the relative effectiveness
of various improvement programs, to enable an informed decision about where best to
invest limited time. Which tools would most efficiently and assuredly lead to improved
management effectiveness and enterprise performance?

In fact, many of the improvement programs that surfaced (or re-surfaced) during the past
decade were unvalidated models. They may sound sensible and appear to yield worthwhile
benefits. But empirical evidence -- in terms of systematic, verifiable cause and effect --
rarely links management behaviorsbelieved to be Beffective with desired work group
performance patterns(such as teamwork and collaboration), or with measured organizational
performance.

Shortcomings of Management Behavioral Models

Many management behavioral models are inadequate in other ways, besides lacking an
empirical basis.

Some models prove too complicated to assimilate and put into practice, such as conditional
or situational models that expect a manager to adopt different supervisory behaviors based
on different attributes of the group being supervised or the task at hand. Experienced
managers know that they will be perceived as more credible and trusted if subordinates do

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not experience variances in management style from task to task, group to group, or
individual to individual.

Some management models are descriptive and analytic, rather than normative, providing
little guidance on how to put them into practice. And the models that are normative often do
not define behaviors that can be broadly understood and applied -- at all levels by different
people.

Some management models are great leader-centric, basing “theory” on a heroic,

charismatic, larger-than-life interpretation of what made popular political or business leaders
effective.

Although these accounts are fascinating, they entail several problems:

First, it is not clear to most managers how to apply a leadership model of heroic
proportions to everyday problems in their immediate organizations. This challenge can be
disillusioning and frustrating because many of the “great leader theories” center more
around traits than behaviors.

Managers intent on improving their leadership skills cannot do anything about changing
personality or physical traits. Useful models must be built on understandable, changeable
behaviors.

Finally, many models are incomplete because they do not encompass work group dynamics
influenced by management behavior. Some of these models survey employees about
whether management behaviors are perceived favorably or experienced as effective, but
they do not measure whether desired work group patterns (teamwork, collaboration,
information-sharing) actually improve based on such behaviors. Whether or not
“management styles” are perceived favorably by those supervised is interesting, but not
nearly as useful as measured correlations between normative management behaviors and
work group effectiveness.

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PRESENT SCENARIO

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Performance IMPROVEMENT: Current Trends

Recent research reveals that the majority of organizations are utilizing performance
management systems / performance management software and many are in the process
of revamping their first generation systems. According to Development Dimensions
International (DDI), performance management systems are active in 91% of 3,600+
organizations studied. This article will review the current trends in performance
management, and how companies worldwide are making changes.

Performance Management - A Definition

According to SHRM (Society for Human Resource Management), "performance

management is the organized method of monitoring results of work activities, collecting and
evaluating performance to determine achievement of goals, and using performance
information to make decisions, allocate resources and communicate whether objectives are
met."

It is likely the majority of employees equate "performance management" to their

performance appraisal form and yearly discussion with their manager about "how they are
doing in their job." But things are changing in this area of HR.

Online performance management systems

59% of HR executives identify improvement of HCM (Human Capital Management)

technology as a key response to their business challenges. Main areas of focus:

hiring management solutions

pre-employment assessment

employee self-service

performance management

However, with all this focus on online systems,

More than half (52%) of companies surveyed in 2005, are stuck in paper-based performance
evaluation systems with annual reviews.

As companies transition to online performance management systems, some key ingredients

are:

Scalability - able to deploy on large scale with solid security

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Employee self-service - managers and employees able to access systems anytime, any
place, on-demand

Integration - ability to connect with other HR systems

Increased Communication Regarding Employee Performance

With increasing use of performance management technology, managers and employees

more easily communicate regarding performance issues. Annual performance reviews are
being replaced with more frequent schedules (quarterly, monthly, etc.). In addition,
performance management technology enables organizations to include feedback from a
variety of audiences. Such 360-degree feedback is internal (supervisors, peers, subordinates)
and external (customers, vendors, etc.).

A new Research report is a little more favorable, however still shows room for
improvement. Below are some highlights from their research database of approximately 1.2
million employees in over 400 organizations worldwide:

Less than 50% of employees believe their organizations adequately address poor
performance.

Clearly it is a challenge for most companies large or small to manage the performance of
their employees . . . especially in the eyes of those employees. However, those organizations
making the connection between employee performance and organizational performance are
taking steps to integrate once disparate hr functions with online systems that offer long term
ROI towards organizational and individual employee success

Process

The Process of appraising an Individual is:

Determines The departmental Manager would determine the specific goals and objectives
individual goals for a person performing a specific job. The requirements of the job would
and objectives drive the individual performance targets.

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Advise The Manager would communicate expectations to employees prior to the new
employees of appraisal period commencing, including how their performance was to be
goals and measured and what were the specific outputs.
objectives

Receive The employee would receive the information regarding performance

performance expectations from their supervisor or manager, most likely during a formal
expectations session.

Performs work The employee would then perform work with the knowledge of what were the
expected outputs and behaviors.

Appraises work The departmental Manager would appraise an employee’s performance based
against objectives on observed behavior, measurable outputs or deliverables, perhaps employees
peers and subordinates (360 degree), or other agreed criteria.

The Manager would make a specific assessment against each measurable item
and probably an overall assessment against company program guidelines: For
Make an example, rating of 1 to 5, where 1 is excellent and 5 is unsatisfactory.
assessment

Advise employee The Manger would probably advise HR of the result, especially if there were
and HR of results bonus payments attached to the result or if there was an unsatisfactory result
where a person was to be managed out of the company. The manager would
require HR guidance on how that process was to proceed and what warning
systems needed to be in place. The Manager would advise the employee of the
assessment, probably in a formal feedback session.

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Records The HR Clerk would record performance results in HRIS, including

performance assessment, date of next review.
results

The HR Clerk would record any future dated activity and any performance
improvement warnings issued.
Record future
dated activity

Receives The employee would receive feedback from the Manager and agree where
feedback and performance was deficient, additional training required, and career path
makes preferences.
comments

Monitors The departmental Manager would monitor progress and any follow up action
performance required.
and follow up
action

Deletes old The HR Clerk or HR System Administrator would arrange to delete old
performance performance records when the agreed date has been reached.
records

Produces
Reports The HR Clerk would produce and distribute performance related reports

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CRITICAL ANALYSIS

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This paper will try to give further insights on the prospects of Performance Improvement.

Increased Integration of HR Functions

Research shows there is a clear need to integrate the traditional HR functions into a more
holistic, strategic approach to human capital management. Some integration opportunities
include:

Aligning employee goals with corporate goals

Linking reward and recognition programs to performance

Targeting learning and development toward performance gaps

Identifying skills and competencies of top performers for retention and succession planning

Integrating traditional HR functions, will give rise to an increased need to automate them.
Connecting the functions at their integration points into clean, close-looped systems
eliminating duplication of data and streamlining reporting processes is the charge for many
organizations.

Strategic HR - The Link Between Employee Performance Management and

Organizational Performance

Increasingly companies are focusing on "strategic HR," aligning human resources initiatives
with the overall goals of the organization to improve business success. Aligning Employee
Performance Management (EPM) with Corporate Performance Management (CPM) has the
following effects:

90% of companies surveyed, perceive improved management of their workforce as key

to gaining competitive advantage.

Organizations are aligning their employee performance goals with corporate performance
goals through technology solutions.

Employees Perceptions A recent survey of indian organizations and 3,000 employees

revealed the following of their employees:

Only 29% feel their companies do a good job of identifying and rewarding top
performers

Only 27% feel there is a clear link between performance and pay

Only 24% feel their companies manage poor performers so their work improves.

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ESSENTIALS REQUIRED
FOR
PERFORMANCE IMPROVEMENT
What essential features would be evident in a complete, useful model?

First, it would be simple in ways that lend broad structure and clarity to the complex
relationships among managers, employees individually and in groups, and the overall work
product of these relationships. Effective management models contain both analytic and
synthetic features. Analytic elements dissect a problem and provide a descriptive
framework, while synthetic elements reformulate in a normative way that aims for
improvement. Managers may not comprehend how to improve behaviors by reading a
purely analytic or descriptive analysis, even of the highest caliber.
Therefore, useful management models need to contain synthetic as well as analytic
components.

Second, good management models come to grips with values that motivate behavior.
Improvement is about changing behaviors (of managers, employees, work groups), which
are rooted in the belief systems that characterize the “informal organization.” Therefore, in
order to influence how people in a workplace lead, follow, communicate, and solve
problems, an improvement model must engage the dynamic interplay of
values,expectations, disincentives, symbols, motivations, and beliefs that affects individual
and team behaviors.

Third,the value of a behavioral model depends on whether it can be validated empirically.

Changing management practices and work group patterns requires an investment of time
and resources, and a validated model provides assurance that the organization is not
rewarding the wrong behaviors, incentivizing the wrong values, sending mixed messages
about expectations, or pursuing a trend that will soon fall out of favor if it does not produce
quick results.

Finally, a performance improvement model needs to be capable of changing behavior

through measurement, feedback, and learning.

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