Performance Management At General Motors (GM)
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Published: Tue, 17 Jul 2018
The following assignment explores General Motors Europe in four dimensions as set out by learning outcome spertaining to performance management module. The four learning outcomes (LO) would measure,
- LO1: Setting GME performance targets to meet strategic objectives.
- LO2: Agreement on team performance targets and subsequent contribution to meet those objectives.
- LO3: Monitoring and control process for the goals.
- LO4: Politics of personal interaction of Sir Leahy. A discussion on his leadership, persuasion and influencing skills.
In order to achieve these learning objectives, the author has drawn upon from his practical work experience together with the primary and secondary research through various resources. This article would primarily be divided into two segments within the domain of learning objectives as defined above. The division would be between Performance Management and Performance Measurement. Performance is defined as potential for future successful implementation of actions in order to reach the objectives and targets. The article shows that performance is constructed by the management system and by managers from his own experience of working at GME and taking a more macro view of the organisation. Performance management explains performance measurement and gives it meaning. (Lebas, 1995)
Setting performance target to meet strategic objectives
General Motors, one of the world’s largest automakers. GME was founded in 1908 by William C. Durant. GM headquarters is in Detroit, GM employs 209,000 people in every major region of the world and does business in more than 120 countries. GM has been the global automotive sales leader since 1931.GM and its strategic business partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM’s largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Russia. General Motors Europe acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. GME is running business with revenue of $135.6 billion (GME, 2010a). GME is using different performance management tools.
In this assignment score card methodology is discussed that GME is using.
Balance Score Card can be used as a short and long term fortheir financial and non financial performance measurement.
There are four parts of balance score card; financial perspective, internal business perspective, customer’s perspective,learning and growth perspective. Balance Score Card is like your cars dash boardwhere there is indicator on as you drive, you can look at the dashboard to obtain real-time information such as how fuel, speed and the distance you’ve traveled or even anyfaulty system etc.”It’s known to help companies and implement the changes required to meet their business goals” (Pangakar & Kirkwood, 2007). The balance score cardenables the companies to develop a more comprehensive view of their operations andto better match all operating and investment activities to long- and short-term strategic objectives (Punniyamoorthy & Murali, 2008).
Link of each perspective in the Balance Score Card (BCS)
High performance work system (HPWS) is also another method to explain the situation in General Motors. Independent work teams, open systems and performance-based pay are known collectively as high-performance work systems (Rouse, 2000). HPWS have also “come to be known as high involvement work systems, flexible work systems and high commitment work systems” (Aghazadeh & Seyedian, 2004) In other words, they are simply work practice that can be deliberately introduced in order to improved organizational performance. The main focus of HPWS is rearranging work so that the employees participate in decisions that affect the everyday operations of an organization. There are three potential factors that can affect high performance work system in General Motors; retrenchment of workers, technology used and layout design.
A worker is the key success to any organization. Retrenchment will cause General Motors to lose talented workers subsequently lose competitive edge. To survive in the changing environment, a company must rely on their workers creativity, ingenuity problem solving ability and strong team work. Workers are able to make their own decision on the best way to accomplish their work. The knowledge and skill shared will create a high performance work system. For example, an engineer in General Motors is developing a fuel efficient engine. Engineer A may need assistants from Engineer B, however when GM decided to retrench workers, Engineer A will face difficulty in developing the engine. Performance of employee can be boost through team works. A study by Thompson, Baughan and Motwani indicates that company such as General Motors, Proctor & Gamble, Xerox Corporation had huge increase productivity as high as 250 percent and double their profit (1998).
The use of technology is another feature in High Performance Work System. All managers in every department of General Motors are able to identify the technology they use in their organization. The application of Human Resource Information System that can store information on workers that can assist managers in deciding which employee is performing and which is not. The use of technology without human operating it is also meaningless. Managers in General Motor can identify whether the qualified workers are able to operate the tools or not.
1.1 The link between team performance and strategic objectives
As it is clear from the figure that all the perspectives link eachother. So all the four parts directly effect the strategic objectives of the company. This principle is used at strategic level.
1.1.1 Organisation’s Strategic Objectives
Goals of GME
Lead in advanced technologies and quality in creating the world’s best vehicles
Give employees more responsibility and authority and then hold them accountable
Create positive, lasting relations with customers, dealers, communities, union partners and suppliers to drive our operating success
Strategic Objectives of Organisations
Financial Growth: Increase the revenues, gross profit and sales.
Financial Efficiency: To improve overall productivity.
Current Customer: To expand sales to existing customers,
To increase customer retention,
To increase customer loyalty,
To create and use a customer database.
New Customer: Introduce existing products into a new market,
Anticipate future customer needs through customer feedback.
Customer Service: Improve our service approach for new and existing customers.
Product/Service/Program Managment: To have all product meet standard of excellence guideline.
Operations Managment: To continually improve internal process to realize efficiencies,
Capitalize on physical facilities (location, capacity, etc.)
Improve organizational structure.Redirect or restructure available resources.
Technology Managment: Increase efficiencies through use of wireless or virtual technology.
Communication Management: Improve internal communications.
Customer Management: Acquire enhanced CRM data mining capabilities.
Marketing Management: To continuously broaden our customer database by getting new information on customer characteristics and needs.
Develop and implement a promotional plan to drive increased business.
Channel Management: To aggressively strengthen our upstream channels.
Improve the distributor and supplier relationships.
People: To hire, develop and maintain the right people, in the right place
Employ professionals who create success for customers.
Training:Develop broad set of skills useful for customer support.
To develop the leadership abilities and potential of our team.
Strategic Objectives of GME
Integrity: We will stand for honesty and trust in everything we do. We will say what we believe and do what we say.
Continuous Improvement: We will set ambitious goals, stretch to meet them, and then “raise the bar” again and again. We believe that everything can be done better, faster and more effectively in a learning environment.
Customer Enthusiasm: We will dedicate ourselves to products and services that create enthusiastic customers. No one will be second-guessed for doing the right things for the customer.
Teamwork: We will win by thinking and acting together as one General Motors team, focused on global leadership. Our strengths are our highly skilled people and our diversity.
Innovation: We will challenge conventional thinking, explore new technology and implement new ideas, regardless of their source, faster than the competition.
Individual Respect and Responsibility: We will be respectful of the individuals we work with, and we will take personal responsibility for our actions and the results of our work.
1.1.2 Workforce requirements that are capable of achieving the organisation’s objectives
General Motors Europe is using the hierarchical approach. In this method each and every employee is controlled by the respective supervisor. And each supervisor gives the performance report of the employee to the top management. In GME every employee is loyal. The company place the right employee to the right job to achieve the objectives of the organisation. There are 209,000 employs of the company. Each and every employee get the proper training for its job which helps the organisation to achieve the objectives with the help of compitent employs.
1.2 Tools and Techniques available to set team performance targets
The following important purposes are derived from different resourses including General Motors website,articles,General Motors final reports.
The operational performances of GME are reported and viewed on the quarterly at board level and than the summary report is send to the top management. The performance of employs are checked with the help of score card. I gives the daily performance measurement which could be also used for the long term strategic purposes. Daily , weekly and monthly targets are reviewed regularly. An important consideration is to make sure the objectives remain appropriate and robust measures of performance in the company.
GME core purpose is to create value for customers to earn their lifetime loyalty.
GME,s success depends on customers. The customers who shop with them and the people who work for them. If customers like what the company offer, they are more likely to come back and shop with them again. If the GME team find what the company does rewarding, they are more likely to go that extramile to help their customers.
1.2.1 Processes that deliver outcomes based on organisational goals and aims
GME use balanced score card methodology throughout its organisational operations. Every department change the balance score card according to their needs. These performances are measured during team meetings at lower level and is discussed at strategic level.
1.2.2 Appropriate methods for evaluating performance
Each and every employee has Personal Development Planning folder. This folder contains all the performance appraisals, the training already given and the future training needs and some departmental performance data. Again the score card helps the company to identify the improvement .
1.2.3 Review capacity and capability of current work force
Using the current work force GME has become the largest company and employer in Europe private sector.GME is still expanding by leaps and bounds and earning higher profit than before.The market has enough labour to cater for the recruitment at Europe level. However, for international operations,the recruitment is carried out at local countries. With the current workforce of 209,000 people, the company is more than capable to sustain itself against any future expansion plans.
1.2.4 Plans to meet long term, medium and short term requirements
Increase General Motors U.S. market share to 33%
Improve customer satisfaction as evidence by points of market share, not fractions
GM’s Future Hydrogen Power Plans (Mike Floyd, 2010)
GM Cuts Unnecessary Spending
GM Sales Soar 11.4 Percent In March On Market ‘Shift’ First Posted: 04/ 1/11
Medical plan and insurance for the employs
All of these plans meet the objectives criteria and are in alignment with the growth.
1.2.5 communicate workforce plan
GME communicates above mentioned plans through its staff briefings, pamphlets, staff benefits periodical, staff’s own website, intranet, films and advertising. The use of flexi hours is very popular in organisation at GME due to the nature of people doing part timer jobs at operational end therefore each department maintains a rota and extra hours available folder through which employees can communicate and leave message for each other along with using staff message boards.
The formal training program in GME consists of five components, of which the first three are available through GM University, which is one of the largest corporate educational programs in the world.
General Motor has established a learning organization and culture for its employees across the entire enterprise.GM University is designed to align the company’s training investment with its business needs, and disseminate best practices and core value.
- Foundation skill training (i.e. computer software, GM history and business orientation)
- Functional specific skills and techniques
- Leadership and professional development
- On-the-job training in each department In addition, GM supports advanced education and certification through tuition assistance, Cardean e-MBA program, and technical education programs.
Tuition Assistance Program: This program regular active salaried employees are eligible for tuition assistance upon date of hire.
Graduate Education: Variety of graduate programs are available throughout GM. Checked with the operating unit of interest to you for individual opportunities.
On-Site Classwork: Number of educational courses are offered in conjunction with educational institutions throughout the United States.
New Hire Mentoring: The GM New Hire (GMNH) is the unique support system for new GM team members. Simply put the GM new hires are paired with our experienced GM team members with the primary objective of professionally transitioning and developing new hires into the GM culture. Providing and enabling to experience professional growth, corporate culture, new ideas and perspectives, while driving for business results. Mentoring is critical as move into the future. The new hires of today, will be our leaders for tomorrow.
1.2.6 Improvements made are in line with the organisation’s vision and objectives
Total worldwide vehicle sales $8.4 million in the year
Offering a lease product in certain geographic areas
In the year ended December 31, 2010 company worldwide market share was 11.4%.
Total of 20,215 distribution outlets throughout the world.
Currently offer 19 FlexFuel vehicles for the 2011 model year.
Increase the volume of vehicles produced from common global architectures
to more than 50% of company total volumes in 2015.
Diesel vehicles have become important in the European marketplace, where company encompass 50% of the market share.
1.2.7 Improvements to reduce gap between what customers and stakeholders want
The success of the GME means that the stakeholders at all levels are very happy with the performanceof company. GME’s share is considered to be the most reliable on the market.The gap between customer and stakeholders is substantially reduced by keeping the community and different stakeholders at the heart of scorecard where the progress is checked on recurrent basis.
Agreeing Team Performance Targets To Meet Strategic Objectives
This sections aims to look into the team performance targets which match with theultimate strategic gains.
2.1 Required Performance Targets Within Teams Against Current Performance
It is the duty of the company to engage with the community and find out about their local shopping preferences. Teams are urged to be polite, helpful and cordial . every company have targets. These targets are compared with the year on year,season on seaon and like for like weekly targets. All the section managers and staff have the access to the relevant information and these targets are reiterated through an internal communication channel. Every single staff working at company has targets.
2.1.1 The type of skills, knowledge, understanding and experience required to undertake current and planned organisational activities
At operational level, there is not much need for high skills required but along with the increment in the hierarchy of the management, the relevant skills are also increased. For example, sectional managers have to be versed in time keeping and management, store managers are more project oriented and have to be more financially aware. GME identify the training needs of its staff. As the company is becoming more technologically oriented, company is investing a lot in the training of systems such as self help check outs monitoring and online reporting. Company employees can manage their own profile these days online and have their personnel related matters sorted through this channel. All this need to be communicated and people are trained through GME Academy.
2.1.2 Systems for collecting and assessing information on the overall performance of theorganisation to identify opportunities for improvement
GME relies heavily on digital ways of collecting and assessing information. Although, it does engage with community through local leaflets and local surveys but on strategic level it engages through CSR (corporate social responsibility) initiative. It has found out that it needs to invest ingreener and more fair trade products. Every transaction at GME front end is stored for 5 years,this huge amount of data helps to analyse and compare sales data on the overall performance.
2.2 Encourage individual commitment to team performance in achieving organisational objectives.
Staff members are encouraged through motivational techniques such as staff value awards competition, employee of the month and encouragement for every staff to become team members. Such techniques help raise the staff morale ultimate resulting in getting individual’s commitment.
2.3 Context of delegation, mentoring and coaching to achieve organisational objectives
The concept of mentoring is used at graduate training schemes where graduate recruits get their mentor for a year or so period. Operational staff tend to get more coaching and any limitations in their skills are catered for locally in the staff training room. At grass root level there is not much of delegation involved, more or less the operational teams do the jobs that they are asked to do with avery little chance of job rotation.
3 Monitor activities to improve team performance
A strategy implementation to improve team performance process has to be a top to bottom approach. Communication lies at the heart of strategy implementation. If the top management doesn’t have the required motivation coupled with strong communication channels then it would behard to monitor any strategic systems and processes. (Mabey 2002). Therefore, GME has adopted various channels for the smooth flow of information and introduced various checks and balances so that the balance score card is measured according to the objectives set. This whole process encompasses the involvement of supervisors, team leaders and other managers during staff appraisals which are conducted twice a year. Employees are encouraged to take part in company development programme which is labelled as personal development planning(PDP). Every employee develops his own objectives. The progress is monitored through PDP folder and staff appraisals.
Identification of the work objectives, key dates and support materials are provided by the management and also at their daily and weekly staff meetings so that staff can measure their contribution. The balanced score card is considered to be used for organisational fitness for the purpose and is classified as the in-out approach to controlling strategic performance. Balanced score card helps to strengthen the core competencies of an organisation and enables workforce to sustain the competitive advantage in the market. (Prahalad and Hamel, 1990; Teeceet al., 1997).
3.1 Monitoring team performance
Following a resource based review of the adopted balance score card methodology at GME. It encapsulatesthe daily, monthly, quarterly and annual strategic control and the steps through which it iscontrolled and monitored.
Balanced score card focuses on alignment and integration of the human activity factor with the operations. It conditions how people work instead of directly trying to influence people (employees and community) what they should achieve. The balanced score card helps to review the objectives and progress through all structures of management and at all levels. GMEs recurring operational issues are discussed at weekly or monthly basis whereas, the strategic issues come up more often at managers meetings on quarterly basis. This is in alignment with the classical view of the balance score card evolution.
3.2 Evaluation of team performance against agreed objectives
Team performances are evaluated through 360 feedback, team briefings and by adopting Deming’s PDC approach. The areas of improvement are defined and are communicated at once throughTeam Exercise.
4 Contribution of influence and persuasion to team dynamics
Since the evolution of different management theories, the modern business world uses a mix of all these. Employee motivation through monetary means is still a bigger factor behind better labour output. The contribution of these motivational techniques to influence the team dynamics is measured in this section.
4.1 Methodologies to gain commitment to action
GME management uses a combination of Taylorism and Maslow theory of need such that it enriches the job satisfaction by really involving its staff into decision making allowing them to become a part of the organisation and by giving them monetary incentives through bonus and other performance related pay increments. This is a proven methodology to gain GME Staff’s commitment in achieving the targets. GME employs over 209,000 and all of them take part in Staff Question Time Sessions which enables the company management to obtain a valuable feedback about the work conditions (Email GME, 2011). This is a 360 degree exercise such that it not only gives feedback to employees but also enables staff to share their experience and opinions to help serve customers better. Staff Training and development is another successful tool that company use to engage with its staff and to enrich their experience of working with them. A good programme such as HPWS (High Performance Work System) is highly effective in experienced staff retention. Staff retention and loyalty is a trademark of every successful organisation.
4.2 Impact of individual dynamic on securing commitment to action
The impact of the chief executive on securing its staff ‘s commitment to action is distilled at all levels of GMEs organizational structure. For any strategic action has to be channelled through effective top level management. GME’s current boss has earned industry as well as its employee’s respect by achieving various awards and taking GME,s success to an unprecedented level.
The above assignment has tried to explore GME within four learning outcomes as specified aboveand has found that due to visionary leadership and innovative performance management measures. The four learning outcomes inspected setting of performance targets through the purpose and balance score card methodology adopted by the company. GME further uses various controlling and monitoring mechanism together with it’s ‘High Performance Work System’ to help implement its objectives. Different motivational techniques are used to build up the morale and generate higher labour output by the team members.These teams include enrichment of employees experience through training and development,sharing of success through shares and profits incentives. And eventually, the all important strategic leadership has been discussed. It is argued that without the visionary leadership of management GME would not enjoy the benefits that it is enjoying today. Despite being the leading supermarket, GME continues to expand into more diversified portfolio and the author of this article, having worked in one of the stores, feels confident that the trend would continue in the foreseeable future.
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