The performance management culture

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Culture can be described as the 'sum total of an organisation's ways of operating and working together. It is also the shared beliefs and the written and unwritten policies and procedures that determine the ways in which the organisation and its people behave and solve problems' (Idea, 2006). Culture exerts its influence in many ways, for example, through the way that people relate to each other or their openness to new initiatives. Culture also has a powerful influence on the effectiveness of any performance management system that management wish to implement. Performance management is an outcome of effective management systems. This management technique is concerned with arranging the conditions of the workplace for individual, group, unit, division, regional, and corporate success. Performance management can be applied to various aspects of any organisation and can have an affect on all the various stakeholders within an organisation It requires that systems, processes and structures are arranged carefully according to the laws of behavior to support the necessary direction, skills, resources, and motivation people require to conduct their work successfully, whether at the executive level or less prominent roles, in all types of industries and across all kinds of business drivers of success. These can include mergers and acquisitions, managing culture changes within an organisation, strategic initiatives turned into solid implementations, ensuring safe practices while meeting objectives and reducing waste. It is a leading indicator of performance because it drives a system or organisation toward desired future goals and provides solid management and performer steps along the way through daily behavior patterns of every department and employee within the organisation. In the area of organisational development, (OD), performance can be thought of as actual results versus desired results. Martins (2007), explains a cycle of managing issues surrounding performance in an organisation as follows: a performance problem is any gap between desired results and actual results. Performance improvement is any effort made at closing this gap actual results and desired results. Any discrepancy, where actual is less than desired, could constitute the performance improvement zone. This Performance management and improvement cycle continues when: Performance Planning is conducted in order to establish the goals and objectives of the organisation. Performance coaching takes place when a manager intervenes in order to provide feedback and suggest possible ways of adjusting performance and performance appraisal occurs when individual performance is formally documented and feedback is delivered to the employee. Some of the direct financial benefits of performance management often include an increase in sales, a reduction in overall operation costs and a potential decrease in any project overruns that may have occurred otherwise. Other major benefits for the organisation that employs detailed performance management practices include improving management control, the alignment of all aspects of the organisation with the goals set out by the Chief Executive Officer and a decrease in the length of time it can take to implement new strategic or operational changes through improved communications networks operating within the organisation (Austin, Brethower & Dickinson, 2009). An integral component of adapting performance management practices within an orgainsation is to insure that these methods are successful in motivating the existing workforce in a number of areas. These areas include: improving employee engagement as they can now see how their contribution directly affect the organisations high level goals. Professional development systems can then be better aligned to achieving business level goals and transparency is created in the achievement of the organisations goals and high confidence is placed in bonus payment schemes (Chauvel & Despres, 2002).

The role of the Individual

Performance Management can only be successful if individual managers truly understand how to ensure the development of skills and provide sufficient training and coaching resources so that each employee or section can be fairly measured by the success of their direct reports, not by business results only. Employee Performance Management (EPM) is a future orientated system of strategic alignment and employee objective setting with regular reviews and reporting and is distinguished from employee appraisal, as the latter does not include a goal setting process and is an open-ended management process with no feedback against clearly defined strategic goals. Performance Management is often confused with performance appraisal, the latter only forming the final part of the performance management cycle. Performance appraisal contrasts with performance management as it is a backwards looking process of performance, measuring aspects and performance of the organisation that have taken place in the past (Danielle, Weise & Buckley, 1998).Performance appraisal is also focused on past performances and has proven to be less effective than an appropriately implemented EPM approach (Jeroen & Deanne, 2007).

The principles that are central to performance management are derived from the science of behavior analysis, also known as the psychology of learning (Van Dyk & Conradie, 2007). Learning is about gathering and understanding information about what has and has not worked and applying this to bring about positive change. Learning from your own activity or from that of others are both important. For learning to be useful there needs to be a willingness to be challenged about actions and achievements. For people to engage in the process of learning they need to understand the purpose of doing so. In a culture where openness about under-performance results in apportionment of blame, people will be reluctant to engage. Where learning is seen as an opportunity for constructive dialogue that drives improvement, people will me more likely to invest time and effort in it. When things have gone well, success should be celebrated (PMMI Project, 2006). The term performance management is often thought to refer to structures and processes of Human Resources Management, for example compensation, appraisal, selection, retention and competencies (Baptiste, 2008).These are important elements of a well-designed workplace, but most often they are systems, processes, and procedures designed without knowledge of behavior. They often suppress or overlook the ways in which motivational factors can be built into the workplace to produce accelerating performance for the correct objectives, processed in the correct way and for appropriate reasons (Douglas & Morris, 2006).If an organisation can employ a suitable performance management process it can help the organisation to get the best out of every department and employee under its control. Weldy (2009) argues this is done by setting out clear steps on how to improve performance that are based on principles of individual learning. A critical component of successful performance management implementation is that performers gain excellence in their own performance. This is achieved by developing strong high performance habits that can be applied across similar or different areas for effective problem solving and work habits. Whether it is learning highly technical skills in a nuclear facility or learning the foundations of good corporate social responsibility in a sports orgainsation, the goal at the individual level is to do work that is of a high standard, is efficient and effective, and to establish a real sense of pride in the work that they do (Chauvel & Despres, 2002). The conditions that surround behavior, that is what people say and do that are recognised or punished over time also help to support sustained patterns or diminish such patterns of success. How well an organisation does in applying the elements of performance management is found in the success of its employees in serving stakeholder needs, meeting their targets, producing desired impact and creating a culture of respect and commitment, with a focus on active learning, inclusion, and creating a culture where the focus is aimed at building long lasting habits of success. Monitoring overall organisational performance allows for the effective delivery of strategic and operational goals. Previous research has shown a distinct correlation with using performance management programs or systems and improved organisational results (Kennerly & Nelly, 2003; Swailes, 2004; McNamara & Mong, 2005).

Performance management refers to a term first introduced by Dr. Aubrey C. Daniels in the late 1970s to describe a method for managing behavior and results, the two critical elements of what is known as performance. Performance can be regarded as a combination of behavior and results, and should not be viewed as independent of either component. Neely (2005) describes performance management as the ongoing process of setting goals, self-assessment, manager assessment, peer-assessment, coaching, development planning, and evaluation. Performance management is a forward looking process, taking frequent measures as work occurs and responding to small steps forward.

Business Performance management is a specified set of processes that help businesses discover efficient use of their business units, financial, human and material resources. This can be contrasted to operational performance management, which focuses on creating methodical and predictable ways to improve business results, or performance, across all aspects of an organisation. A critical element of this practice is integrated business planning, which refers to the technologies, applications and processes of connecting the planning function across the enterprise to improve organisational alignment and financial performance.

Project Performance Management is a sub-discipline of project management that seeks to establish measurements of project performance, such as performance of project scope, performance according to a time schedule and even performance according to a project budget. It seeks to use such measurements to inform project stakeholders, lead the project team and improve project performance.

A spin off of this process is Earned Value Management, which is a technique for measuring project progress in an objective manner. Mawhinney, Redmon & Johnson (2001) suggest EVM has the ability to combine measurements of scope, schedule, and cost in a single integrated system. When properly applied, EVM provides an early warning of performance problems. All of these combined processes are often placed under one single practice called customer performance management. This refers to the practice of managing the effectiveness of all the business activities and processes related to the handling of customer relationships and providing a common set of financial and customer focused goals and objectives. This includes all aspects of creating and maintaining a detailed source of customer related data.

A key aspect of performance management is performance measurement. Whatever the process being driven with performance management, clear and concise measures are required in order to properly define the desired goals. Most performance management systems fail to achieve the desired goals of the process owner or project sponsor because goal measurement is ambiguous, not specific enough, poorly communicated or because results cannot be measured effectively. In the case of business, the typical approach is to create "smart goals," those which are specific, measurable, achievable, relevant, and timely.

Performance measurement is a process whereby organisations establish the parameters within which systems and practices, investments, and acquisitions are reaching the results that are required by management (OCIO, 2007). There are many types of measurements. Educational institutions use exams that are graded to establish academic abilities of students; in sports, time is clocked in split seconds to verify the athletic abilities of athletes and in sports organisations, national and international results play a large role in how they are deemed to be performing their duties at the optimum level. Similarly in teams and other organisations, there are various tools and measurements to determine how they perform (Gamble, Strickland & Thompson, 2007).

The daunting task of measuring performance for organisations across industries and eras, declaring the top performers, and finding the common drivers of their success did not occur to anyone until Peters and Waterman began researching and writing the ground breaking performance measurement book, In search of excellence (1982). This book challenged industrial managers' actions and attitudes, and inspired researchers and scholars to further pursue the theory of high performance, a key to any competitive business organisation. This task becomes more complex as corporations diversify into multiple industries. Research must take this into consideration when conducting a comparative analysis of companies within the traditional and non-traditional organisational environments such as sports organisations.

The traditional control-oriented performance measurement system in the industrial era is losing its relevance in today's fast changing environment where organisations are re-shaped into flat multi-functional hierarchies. Performance measurement will get tougher with globalization and increasing complexity of organisations' business models, teams' roles and responsibilities. The diversity of organisations is now posing a huge problem for the ways in which performance measurement practices can be facilitated. A huge variety of organizations exist today. For example, there is government, educational, financial services, manufacturing, retail, non-profit and sports organisations. Then, there are sub-industries. In the financial services sector, there are the banks, insurance, mortgage lender and exchange organisations. And in each entity, they can further be broken down into deposit, loan, and credit card investment departments. In the deposit department, there may be savings, current and fixed accounts. This can continue to break down until there is an individual that performs a task that is unique. If the bank example has 10,000 staff, it is unfeasible to have 10,000 different performance measurements. It is becoming a great challenge for all large organisations to keep track of the huge diversity of skilled professionals and ensure alignment to the organisations mission and values.

The measurements of intangible and non-financial aspects of an orgainsation are another problematic issue that faces many organisations. Traditionally, accountants play a major role in measuring an organisation's success. Unfortunately, annual reports do not allow managers to monitor the progress to build capabilities and acquire the intangible assets needed for future growth (Shepherd & Gunter, 2006). Non-financial measurements will be required to link an organisations long term strategy with its short term actions. Unlike financial measurements which are straight-forward and certain, non-financial measurements will require more judgment and justification. Furthermore, unlike financial measurements which are governed by accounting standards and principles, non-financial measures will be more susceptible to misuse and manipulation, and will require honesty and transparency in order to be useful.

Performance measurement is conceptually related to other evaluation processes. There is often a professional and conceptual divide between performance managers and evaluators, with evaluators criticizing some performance measurement approaches as being too simplistic (Greene, 1999). In particular there is the problem of attribution which is usually not dealt with well in performance measurement systems. This relates to the previous discussion on intangible and non-financial measurement. Put in its simplest form, the mere measurement of changes in outcomes over a period of time does not establish attribution. Schaffer (2002) argues that even if an organisation takes action over the period of time in which measured outcomes improve this, will not say anything about whether such measured changes can be attributed to the actions of the organisation rather than to any other factor. The performance measurement movement can challenge evaluators over the fact that their designs often involve extensive and often costly studies which are not feasible in the vast majority of cases where performance needs to be measured quickly and cheaply for pragmatic management reasons.

As with any other organisational change management program, implementing a performance measurement system will encounter resistance especially in large bureaucratic organisations. First of all, employee's natural resistance to be measured will inevitably cause an obstacle. Self-serving managers who are experts in their field may have the freedom to choose and manipulate measures for their own benefit. Furthermore, in large global organizations, consistency in implementation across departments may be a problem if communication and coordination is not executed well (Fitzgerald & Van Eijnatten, 2002). In addition, inexperienced managers may not know what they want to find out and collect data and statistics which may not be that useful. This will cause frustrations and unnecessary effort for staff at the working level to prepare additional data and reports which serve little value.

Throughout the implementation of a Performance Management system, which may span from months to years, there is a need to constantly focus on the critical goals that can bring visible progress and enhancement. Otherwise, there is a tendency for busy employees to lose sight of the ultimate objective of performance measurement, and treat its implementation as a mere data collection exercise for management. Teams must create measures that support their mission, or they will not fully exploit their ability to perform the process faster and more responsive. In addition, to remain competitive and relevant, the measures need to be continually reviewed and revised as the environment and economy changes (Geary, Brache & Jossey-Bass, 1995).

Employee involvement is a critical component of any successful performance measurement system. A truly empowered team must play the lead role in designing its own measurement system as it will know best what sort of measurement it needs to align with the organisation's own strategy (Greasley, Bryman, Dainty, Price, Soetanto & King, 2005). This empowerment should not be limited to management level or the finance department, but be extended to every single individual in the organisation. Each individual or team must contribute and in return own the Performance Measurement system themselves.

There is no value for measurements that cannot be put into a simple and clear report. Measurements must focus on the most critical items and not sacrifice quality for quantity. Too much measurement may mean that organisations end up spending too much time collecting data, monitoring their activities, and not enough time managing the project outcome. A well implemented Performance Measurement system should eventually be a tool that allows a consistent language to be used within the organisation. It should allow different individuals to trace their measurements to the management and organisation's strategic vision and goals, and allow different departments to cross-reference their priorities and targets using the same language.

Unlike performance appraisal and evaluation, measurement must be a forward looking process. A good Performance Measurement system should also capture its relevance to the organisation's vision, validate its strategies and chart new directions. It should not dwell in the past but focus on measurements that impact future deliverables. Enduring goals require more effort and many organizations prefer to focus on initiatives that promise short-term financial results even though other initiatives may have higher long-term payoffs (Fariborz, 2001). A possible reason is the increasing competitiveness and high staff turnover of many organisations. This builds a culture of short-term full time employment, where employees do not envision themselves staying on with an organisation long enough to see any long-term plans achieve there goals. One possible solution for such long-term goals which cannot be realised for many years, such as many initiates in sports organisations, is to identify meaningful output-oriented milestones that lead to achieving the long-term outcome. Performance measurement must not sacrifice one aspect of the orgainsation just to improve performance in another. The Performance Measurement system should cover a comprehensive range of measures and offer perspectives that provide an understanding of cause-effect relationship to rearrange resources or priorities effectively. This usually requires a balance of financial and non-financial measures. These measures agreed by the employer and employee, have to be ambitious and challenging, and at the same time, be realistic and attainable. Too little means employees fall into complacency and too much and they start to rebel or leave. This requires a careful balance and is the manager's responsibility to make decisions where disagreements may arise (Booth, 2006).

Before anything can be done, senior managers need to buy-in to the change management philosophy and adopt the performance-based management principles. There must be management endorsement at company wide level to ensure consistency with other existing initiatives such as cross-functional integration, customer-supplier partnership, continuous improvement, and team, rather than individual accountability. Lyons (2006) claims the focus should be on strategy and vision, and not day-to-day operational controls. Managers should dictate strategic goals, ensure that each team understands how its job fits into the strategy, and provide training so that the team can devise its own measures. He goes on to claim that ownership and accountability for performance remains with the teams, and managers should allow the teams to decide which measures will best help them perform their jobs. Managers should not make the mistake of thinking that they know what is best for the team. If they do, they have crossed the line, returned back to the command-and-control (Moffat, 2000) ways, and render their empowered teams powerless.

An integral part of many performance management systems is to set various targets. Performance targeting has an important place in the organizational manager's toolkit. There is no reason to doubt that, when used properly, targeting can make a positive contribution to organizational performance. However, the assumption that organizations will indeed make proper use of performance targets is not always well founded. Designers of performance targeting schemes if they wish to add value to their organisation's performance must bear in mind the limitations of performance targeting, and the potential of targeting schemes to cause significant and unintended perverse outcomes. Experience has shown that when targeting schemes are not carefully designed and implemented, they risk causing more harm than good (Hood, 2003). This has proven to be one of the major pitfalls when establishing performance targets. In sports organisations and many other public sector entities performance pitfalls can be viewed as of critical importance due to the special conditions related to oversight and accountability in the public as opposed to the private sector (Schacter, 2002).

Performance targets are created in order to place attention on particular processes and outcomes relating to a given organisation and also to align the behaviour and actions of individuals to the overall goals and objectives of the organisation, along with the expectations of stakeholders. However, as is the case with virtually every scheme designed to influence human behavior, performance targeting systems are subject to the law of unintended consequences. In many cases, unintended behaviors induced by performance targets are perverse, leaving organizations and their stakeholders worse off than before the introduction of targets (Van de Walle & Roberts, 2008). The most prominent example of this occurs when individuals become solely focused on thee targets that are set out for them and place less emphasis on producing quality products, services and benefits to the consumer which is ultimately the main objective of most organisations. As a result, if targets are not properly monitored and used in the most appropriate ways, they can often cause individuals to lose sight of the organisations main goals and objectives, and therefore prove to be immensely counter-productive.

Performance management is most commonly applied in the traditional business setting, but can also provide significant benefit to many other institutions such as schools, churches, community meetings, health setting, governmental agencies, political settings and sports organisations (Diaz-Martin, Iglesias, Vazquez & Ruiz, 2000). These principles are needed whenever organisations interact with their environments to produce desired effects. Performance management has a wide variety of applications such as employee performance, software performance and business or corporate performance (Bourne, Franco & Wilkes, 2003). Performance management in sport in Ireland, and indeed in many other nations, is a relatively new phenomenon. Little research has been carried out into examining how sporting institutions and organisations view the issue of performance management and if they use models such as The Performance Prism, Balanced Scorecard or EFQM model (Wongrassamee, Simmons and Gardinerin, 2003) in order to assist them in achieving their strategic goals and manage performance effectively. These models have been proven to be successful in the traditional business environment and given that many sporting entities have much in common with the business industry, it is imperative for research to be carried out to critically examine this issue in greater detail.

Public and voluntary sports agencies share much common ground with traditional business organisations. They have members and stakeholders much like traditional businesses have customers and clients. Many belong to the world of non-profit organisations, that is organisations whose main goal is not financial returns, rather the performance of their mission (Chappelet and Bayle, 2005). This is why the issue of performance management is such a crucial area for such entities, perhaps even more so than organisations operating within a traditional business environment.

Chappelet and Bayle (2005) comment that sport is playing an increasingly important role in a rapidly changing economic, political, cultural and social world. A new context for all levels of sport is developing around the globe, providing an extraordinary opportunity to discover and take advantage of elite level sports experience in amateur and professional contexts. One of the greatest challenges for organisations involved in the management of elite level sport is to ensure that their current and future managers have the necessary skills to lead their organisations in the twenty-first century (Chappelet and Bayle, 2005). Managers within these organisations must familiarise themselves with performance management techniques and adapt them to this unique sector of the management world.

Many commentators (Mahony and Howard, 2001; Miller, 1997) on sport as a business suggest that the managers involved in the sport industry are limited by their ability to transfer knowledge of conceptual business practices to the sports business environment. However, Chelladurai (2005) insists that sport organisations, are in desperate need of managers from within their own ranks that have the capabilities of managing the performance of their organisation and steering their strategic goals. It is for this reason that further research must be carried out in this field to extend our knowledge and understanding of performance management by organisations integral to development of sport on the Island of Ireland and across the globe.

The dynamics of sport on the Island of Ireland are quite different to many other nations of similar size and demographics. One sports organisation in particular, the GAA, dominates the sporting landscape and has done for many years. The GAA is a unique organisation when compared with other National Governing Bodies on the Island of Ireland. The organisation has a large membership base and has generated an outstanding public image by employing various corporate social responsibility schemes that contribute to communities around the country. It remains a robust and thriving organisation, constantly preparing itself for the challenges ahead, and developing new initiatives on an annual basis in order to further develop the participation levels of its sports in Ireland. Other sports such as soccer, swimming, boxing, athletics and basketball have grown in popularity since the middle of the previous century but are still not attracting similar participation and interest levels as those of the GAA. Fahey, Layte and Gannon (2004) conducted research into participation levels for various sports on the Island of Ireland. The study was commissioned by the Irish Sports Council and undertaken by The Economic and Social Research Institute as part of a comprehensive programme of research designed to increase understanding of the shape and dynamics of sport in Ireland. The report, based on a national sample of over 3,000 adults interviewed in 2003, showed that participation in physical activity in Ireland is in line with international levels, with 40% of adults participating to a level recommended by the World Health Organisation. The study found that recreational walking is by far the most popular form of physical activity among Irish adults, with about 60 per cent of responders using this form of exercise on a regular basis. Apart from walking, the most popular sports that people took part in were GAA games, golf, soccer and swimming for men, and swimming and aerobics for women (Fahey, Layte & Gannon, 2004). The most common reasons that responders gave for lack of participation in sport had to do with the lack of interest, willingness or time to take part. Interestingly, the lack of sports facilities or other impediments arising on the supply side of the sports system in Ireland was not given as a major feature in their stated reasons for not participating. The provision of sports facilities serves a purpose in raising standards in sport but is unlikely to raise public participation in sport to any great degree. This is an issue that many sports organisations in Ireland seem to overlook.

The 2012 Games will be considered a home Olympics for the Irish team and as a result, it will create an opportunity for Ireland's athletes to excel at their respective sports. If Ireland's athletes perform well at these Games it could have a lasting legacy on sporting landscape in Ireland. This in turn could facilitate national, community and individual benefits on social, economic (Haskell, 1996) and (physical and psychological) health dimensions. The performance management systems in place will be a significant factor in achieving success, and it is critical that research is carried out in order to investigate if the performance management systems in place are the most effective and efficient.

In 2005, it was estimated that the value of the social aspects of sport in Ireland was €1.4 billion (ESRI, 2005). This figure was deemed to be a significant amount in the dynamic economic environment of modern Ireland and sport in Ireland was also deemed to be a major contributor to social capital within the country. As sport in Ireland is of a major economic, political and social significance, it is imperative that performance management practices are utilised within organisations who have a part to play in the development, delivery and structuring of the sporting landscape in Ireland.