Thesis report on performance management system

An Empirical Study of Key Factors to Effectively Operate Strategic Performance Management System

The board has a staff of over 93 employees, and over 40, employees in the wider sugar industry Year of book statistics, Due to cut throat competition, most business organizations have been forced to rethink employee performance management. In order to develop a sustained competitive advantage over rivals, business organizations have embarked on building the capacities of employees which cannot be replaced easily.

Generally, employee performance management practices entail: performance agreements, rewards, training and development, and appraisal as a way of effecting changes in organizations with regard to improving performance. Armstrong views performance management system as the improvement of organization performance by developing individual employees and teams. Additionally, he sees performance management as a continuous and much wider, more comprehensive and more natural process of management that clarifies expectations, emphasizes the support role of managers, who are expected to act as coaches rather than judges and focused on the future.

Business organizations in the sugar industry in Kenya are sensitive to making losses and being heavily indebted. The Sugar Industry has faced formidable challenges ranging from the closure of some factories due to adverse trading environment, leading to massive unemployment and loan defaults.

Yet other firms are under receivership for instance Muhoroni and Miwani. Punitive tax regime has also lead to uncompetitive pricing, indebtedness and cost inefficiency in the industry. Lack of strategic direction and mismanagement of some of the industry institutions has led to inability to meet set targets.

Additionally, there has been weak out grower institutions, poor roads infrastructure, and poor cane transport system. There has been low priced sugar imports arising out of the EU reforms and Economic Partnership Agreements EPAs leading to incapacitation of the local industry as well as government bureaucracy slow process of addressing sensitive matters pertaining to sugar industry. Studies conducted in this area include: Kiboi focused on management perception of performance contracts in State Corporation.

Obare focused on implementation of strategic plans in the public sector with reference to personnel Management of the Government of Kenya.

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Effects of performance appraisal quality on job satisfaction in multinational companies in Malaysia. Martin and more Human resources management: Gaining a competitive advantage. The reasons for undertaking the research were explained to the respondents in a letter. This paper only deals with internal factors, because it is possible for a company to manage and influence them directly. Management Accounting, 69 10 , Nyembezi, V.

These studies have not considered employee performance management practices. It is important to conduct a study to determine employee performance management practices in Kenya Sugar Board. For any business organization to have a sustained competitive advantage, an effective performance management system needs to be put in place.

Infusion of employee performance management practices is vital to improve performance. The objective of this study was to establish employee performance management practices in Kenya sugar board. They will be able to use the information to evaluate and implement effective performance management practices. Heads of research functions will gain more knowledge in this area and therefore sensitize various stake holders in the industry. This study will be useful to the government, especially the office of the Prime Minister charged with coordinating function of ministries.

The information will be useful in assessing best performed state corporations with view to effecting performance based pay incentives. Graham and Bennet define performance management as the integration of employee development with results based assessment. It involves performance appraisal, objective setting for individuals and departments, appropriate training programmes and performance related pay.

Appraising of functional heads by their juniors, peers, employees in other departments, and customers are also incorporated in the system. Torrington states that performance management is used to imply organizational targets, frameworks like balanced score card, measurements and metrics with individual measures derived from these. Clark defines performance management as establishing a framework in which performance by human resources can be directed, monitored, motivated and refined, and that links in the cycle can be audited. Performance management is not an annual exercise. It means ensuring that the employee has the training he or she needs to perform the job.

Performance appraisal on the other hand is a year end event- the completion of the appraisal form. Performance management is a process that starts the year with performance planning and is integral to the way people are managed throughout the year Dessler, Armstrong defines performance management as a systematic process of improving organizational performance by developing the performance of individuals and teams.

It means getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements. Processes exists for establishing shared understanding about what is to be achieved and for managing and developing people in a way that increases the probability that it will be achieved in the short and in the long term.

HR Basics: Performance Appraisals

It focuses people on doing the right thing by clarifying their goals. It is owned and driven by the line management. This was also a move from collectivism towards greater individualization of the employment relationship Pennington and Edwards, Jackson argues that performance management is a formal, structured process used to measure, evaluate, and influence employees, job related attitudes, behaviours and performance results. In essence, high performance organization whether public or private, must be keen in developing and deploying effective performance management systems, so that through such systems they can remain high performing and competitive organizations National performance review for reinventing Government, According to Armstrong , performance management is a continuous and much wider, more comprehensive and more natural process of management that clarifies mutual expectations, emphasizes the support role of managers who are expected to act as coaches rather than judges and focused on the future.

He defines performance management as a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors. Performance management is an integrated process of defining, assessing and reinforcing employee work behaviours and out comes. It includes practices and methods for goal setting, performance appraisal and reward system, which influence the performance of individual and work groups Cummings and Worley, Wilson defines performance management as a systematic approach to improving individual and team performance in order to achieve organizational goals.

It is a practice through which work is defined and achieved. Performance management is about aligning individual objectives to organizational objectives and ensuring the individual upholds corporate core values. It provides for expectations to be defined and agreed in terms of role responsibilities and accountabilities expected to do , skills expected to have and behaviours expected to be.

The aim is to develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organizations. It is also concerned with ensuring that the support and guidance people need to develop and improve are readily available Beardwell, Procurement executives Association defines performance management as: the use of performance measurement information to effect positive change in organization culture, systems and processes, by helping to set agreed- upon performance goals, allocating and prioritizing resources, informing managers to either confirm or change current policy or programme direction, to meet those goals, and sharing results of performance in pursuing those goals.

Organizations which do not integrate into their management development programmes, tend to experience lower than expected performance improvements and higher dissatisfaction Longenecker and Fink, It must also be possible to anticipate needed changes in the strategic direction of the organization and have a methodology in place for effecting strategic change. Successful accomplishment of these two tasks represents the foundations of good performance management. In essence, performance management provides organizations with the opportunity to refine their development activities.

Each review should go over the goals that were set when the employee started the job or during the last performance evaluation. Then the review should examine how well the employee has done toward reaching these goals. The employee should be asked to rate his or her performance, in addition to relying on objective measurements such as sales figures.

You and the employee should then discuss the desirability of trying to reach goals that haven't yet been achieved, and you should both set goals for the future. But reviews and evaluations are often justifiably viewed as little more than formalities that accomplish little or nothing in the way of true feedback. To make formal evaluations go more smoothly, and to eliminate any surprises on the employee's part, give feedback at the time something occurs to warrant it.

Formal performance reviews are a crucial part of the ongoing dialogue between managers and their employees. The objectives of the review conversation are to make sure that the employee and manager share a clear definition of the job, an understanding of performance expectations for the position, and an assessment of the employee's performance. Page 27 information for other human resource management functions. Constructive communication. Collaborative attitude. Openness to giving and receiving feedback. Commitment to "continuous improvement". High level of accountability—good follow-through on commitments made during conversation.

Technique Key Idea Advantages Disadvantages 1. Ranking Method Ranking employees from best to worst on a particular trait, choosing highest then lowest, until all ranked 1. Cost effective. Less objective. Morale problems. Suitable for small workforce. Easily Constructed. Easy to use. Rating may be subjective. Each characteristics is Page 28 2. Scale rated by identifying the best score that best describes his or her performance for each trait. Reduce the personal bias. Based on direct observations. Difficult to convince people to share their critical incidents through a survey. Can cover all factors.

Examples are given. Provides feedback. Time consuming. Supervisor may write a biased essay. Effective writers are very difficult to find. Management by Objectives Employees are evaluated how well they accomplished a specific set of objectives that have been determined to critical in the successful completion of job. Difficult to employees agree on goals.


Misses intangibles like honesty, integrity, quality etc. Job behavior describe employee performance in a better way.

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More objective. Behaviors are activity oriented rather than result oriented. Very time consuming for generating BARS. Each job require creating separate BARS scale. Employees are evaluated over a 1. Concepts are simple. Page 29 7. Assessment Centers period of time; say one or three days, by observing their behaviors across a series of selected exercises or work samples.

Highly flexible methodology. Exercise is hard to fake.

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Requires a large staff. Requires a great deal of time. Only a limited no. Excellent employee development tool. Legally more defensible 4. More objective being multi-rate system. May damage self-esteem of employees if the feedback is brutal. Difficult to implement in cross-functional teams. They imported Dornbusch coating lines and the best quality of Artificial Leathercloth became a reality! The years passed by and there was no looking back as the Group was growing in leaps and bounds. It was just a beginning for the team which was later strengthened when Late Shri.

Kantilal Shah and Late Mr. Amrutlal Motasha joined the business. Page 31 Later, Mr. Arvind Motasha, son of Late Mr. Vadilal Motasha also joined and the team was further strengthened. It is engaged in manufacturing of Artificial Leathercloth and is one of the largest manufacturers in the world with installed capacity of Modern and well laid out plant for production and storage. Page 32 About Joyride :- Joyride seat covers made from superior grade of leather cloths, Joyride offers better protection from harsh UV rays and keeps the seats cooler.

The product is specially designed for Indian climate keeping in mind essential factors such as heat management, durability, environment and the value for money. Durability and long life :- Joyride offers all weather protection and comes with 3 years warranty. RCVPL caters to customers in over 40 countries worldwide. Quality Policy :- To achieve customer satisfaction by providing international quality products in all our product ranges. About Vijayjyot :- Vijayjyot seating components division is leading components manufacturer for Metro, Bus, Car, Cinema and Auditorium seats.

We also manufacture and supply fully assembled Railway seats. Its seating components division provides one-stop solution to customers from design inception, proto-type sample, product development to commercial supplies. Ltd [RKPL] established in , produced knitted fabrics to meet the in-house requirements for leather cloth backing, for our sister concern - National Leather cloth Mfg. In OE the fabric is applied for back scrim application in automotive upholstery.

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  • Importance of performance appraisal system.
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Raising machine of Daintipaolo. They are 2 decades old company in seating system having clienteles at home India and abroad. Its People :- Their main focus is future growth of company lies with its human resource people. The human skills are updated with training inputs on a regular basis and also have a HR practices in our organisation. Our top management is involved in HR policy within the organization, that a clear indication that we are people performance organization.

Page 34 They have a very wide spread sales and marketing network covering 4 regions of the country. After sales service to all our customers are being monitored in the form of Customer Satisfaction Index. This is to assess and improve various parameters of services within our setup on the basis of customer's feedback. Its group :- The journey of samsons group started way back in by the confluence of two families Shahs' and Motashas' in the form of small trading house. VSPL in Group turnover is around Rs.

It proves that successful organizations realize that performance management is a critical business tool in translating strategy into results. The CEOs in the majority of the 88 Organizations surveyed say their performance management system drives the key factors associated with both business and cultural strategies. Performance management has been described as a systematic approach to the management of people, using performance goal measurement, feedback and recognition as a means of motivating them to realize their maximum potentials.

A higher percentage of measurement-managed companies were identified as industry leaders, as financially in the top third of their industry, and as successfully managing their change efforts. The findings revealed that the biggest measurement area separating successful from less successful firms is employee measurement. Successful industry leaders simply do a better job than non-leaders at measuring their workforce, which the study say is where real change won or lost.

The study results showed that: Companies with performance programs have higher profits, better cash flows, stronger stock market performance and a greater stock value than companies without performance management. Productivity in firms without performance management is significantly below the industry average, while productivity in firms with performance management is on par with the industry average. Companies with performance management significantly improved their financial performance and productivity after implementing performance management.

Faced with fast moving and competitive environments, companies are constantly This has led to much interest in the performance of employees, or more importantly, how to get the most out of employees in order to sustain competitive success. While practices in these two sectors did not differ significantly, three diverse but overlapping HRM models did emerge, each of which involved a different set of EU member states.

Dissertation on performance appraisal system

These results show the usefulness of an innovative technique when applied to research so far conducted through traditional methodologies, and brings to the surface questions about the universal applicability of the widely accepted relationship between superior HRM and superior business Performance.

It is a challenge to monitor the entire cycle of defining the competence requirement of the business, accessing existing competence in the organization and bridging the gap between the two. HR practices are crucial for any organization. Every phase from recruitment to exit interview is under the HR department. In a manufacturing industry, with every technical advancement business opportunities can show up. These opportunities can be converted into business success only with performance alignment and competence management. Under these circumstances it is worthwhile to look into the ways by which they can be motivated to work under hard conditions.

It is found that performance management processes, evaluation, its impact and factors are key themes. Researchers apply popular research approaches for data collection analysis and communication. Questionnaires were randomly administered to 46 staff members of these libraries. The focus of the study was on the administrative staff of Crawford University. The study evaluated the purpose of performance appraisal in private universities and identifies relevant factors for achieving an effective performance appraisal.

A cross- sectional survey was selected for this study because it was easy to undertake compared to longitudinal survey and the results from the same can be inferred to the larger population. The Page 41 study population was for all the administrative staff of Crawford University. The whole populations of staff were selected as respondents. A structured questionnaire was used to collect the data for analysis. Conclusively because the performance appraisal systems used in private universities are not effective and that they exist just as a matter of formalities, the private universities cannot measure members of staff performance, hence making it difficult to achieve the intended human resource management objective.

Drawing from Organizational Information Processing Theory OIPT , we examined how those three outcomes may be influenced by factors that affect OIP requirements industry, size, and geographic scope of operations and by organizational and technological factors that affect OIP capabilities.

Organizational factors included management's decision-making style and organizational structure. A target population of 76 employees was surveyed.

A structured questionnaire was self-administered to the employees to collect data. Multiple regression analysis technique was used to explain the nature of the relationship between PAS and the factors that influence it. Results of the study showed that all the five factors: Implementation process X1 , interpersonal relationships X2 , rater accuracy X3 , informational factors X4 , and employee attitudes X5 had a significant positive relationship with the performance appraisal system Y.

It shows that if these factors are taken into consideration by the ratees, the raters and the government policy makers, the PAS can be a good performance management tool. In practice, organizations have difficulty in implementing a performance management system because its different dimensions are Page 42 not taken into considerations enough. This article describes the findings of a comparative analyses conducted between a standard performance management model and performance management systems as applied by Local Development Organization LDO.

Data was collected from 50 employees of the organization with a Cronbach Alpha 0. Results identified barriers to implementation of effective PMS, also recommendations and viable solutions are presented. This paper uses a review of the literature to evaluate the development of appraisal system and argues the critic areas of appraisal system.

Performance management eliminates the shortcomings of performance appraisal system to the some extent. This framework focuses on individual performance linked to organizational performance and is designed to deliver short term business objectives as well as long term sustainable success. The population from the 9 colleges of the university and 1 school stands at as of To acquire a representative sample from the vast population of over university employees, the sample size comprised of respondents, of which 72 valid responses were used in the analysis.

Among the key observations identified in this study, the results showed that during the appraisal process, results are never discussed and communicated with each employee, even when the appraisal process is concluded, there are no serious decisions ever made nor are employees given added training to improve their performance and take corrective action. Results showed that the employees perceive performance appraisal as time wasting. Several recommendations were therefore suggested to improve the performance appraisal process at the university which include: promoting the practice of giving feedback to the employees after every performance appraisal exercise, training the employees of the performance appraisal benefits to prevent resistance and streamlining the performance appraisal.

It was further recommended that Makerere University should harness the strong points to improve the performance appraisal system and try to work on the weak areas implementation of the performance appraisal system to make Makerere University performance appraisal process result oriented, that would reduce substandard employee performance.

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