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The purpose of this report was to examine performance management in FedEx Corp. The major findings indicate that FedEx always be innovative to made their business continue growth. The effective and efficiency FedEx how to train employee be innovative. Then, customer's satisfaction is very important for the FedEx to achieve goal. In order to provide the best customer experience and earn the loyalty of the customers, FedEx must have innovative in their services. For example, use of latest technology that can benefit the organisation and also for customer.
Finally, this report recommends that FedEx continue to develop and implement in innovation to continue providing quality customer.
FedEx is a leading global logistics solutions provider, was provided customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. According to FORTUNE magazine (2012), FedEx was ranked 6th among "World's Most Admired Companies". FedEx inspires its more than 300,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities (FedEx, 2012). However, efficient customer service is a significant for staying in this highly competitive global shipping industry, let along doing so with a satisfactory profit (Oz, 2009; Gage, 2005).
Performance management is the methodical and organised system for monitoring the results of work activities, collecting information and evaluating performance, and determining the achievement of goals. "Performance management is the process through which managers ensure that employees' activities and outputs contribute to the organisation's goals" (Noe, et al, 2011). Properly using performance information can assist leaders in making staffing decisions, allocating resources and communicating whether department or organizational objectives have been met. According to Armstrong and Baron define performance management as 'a process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance. As such, it establishes shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved.' They stress that performance management is 'a strategy which relates to every activity of the organisation set in the context of its human resource policies, culture, style and communications systems. The nature of the strategy depends on the organisational context and can vary from organisation to organisation.'
According to CIPD (2012), performance management is a tools to ensure that managers manage effectively especially they ensure that the people or teams they manage. Firstly, the managers should know and understand what is expected of them. The managers have the skills and ability to deliver on these expectations. They need support by the organisation in developing the capacity to meet these expectations and given feedback on their performance. Finally, they have the opportunity to discuss and contribute to individual and team aims and objectives. Therefore, performance management is about establishing a culture in which individuals and groups take responsibility for the continuous improvement of business processes and of their own skills, behaviour and contributions.
"Employee Performance Management is a process for establishing a shared workforce understanding about what is to be achieved at an organisation level" (PeopleStreme, 2012). It is about aligning the organisational objectives with the employees' agreed measures, skills, competency requirements, development plans and the delivery of results. The emphasis is on improvement, learning and development in order to achieve the overall business strategy and to create a high performance workforce.
The key purpose of organisational performance management is to introduce systematic controls in the management process to guide and regulate the activities of an organisation or any of its parts, by means of management judgement, decision, and action for the purposes of attaining agreed objectives. Anderson and Media states "Organisational performance management is the process of making sure that your company resources are being properly used in pursuit of company goals".
Performance management is an important business strategy to ensure sustainable services delivery in any business contest. Today, many organisational are using performance management tools to manage effectiveness and sustain the business.
FedEx is a leading organisation needs for using performance measurement information to help set agreed-upon performance goals, allocate and prioritise resources, confirm or change current policy or program directions to meet those goals, and report on the success in meeting those goals.The balanced scorecard is a framework that measures a company's performance in an integrated manner. It provides a formalized mechanism to achieve a balance between non-financial and financial measurement. The Balanced Scorecard assists organisations in overcoming three key issues: effective organisational performance management, the rise of intangible assets, and the challenge of implementing strategy (Niven, 2006). The balanced scorecard concept measures organizational performance across four balanced perspectives: financial perspective, customer perspective, internal business perspective and learning and growth perspective. Therefore, the balanced scorecard was used in FedEx to analyse performance management.
FedEx had an open communication that is very effective way to control and communicate with the departments around the world. In generally, the open communication is used to delivery a strategy and the initiatives by the director to ensure the other department inside or outside the US can achieve the goals. FedEx has always used a two-way communication for giving the employee autonomy to meet the local market needs and to deliver the proper technology that can useful in other departments. Two-way communication can motivates employees - help them feel part of business, so the FedEx can easier to control and coordinate business activity. For example, the director can give a strategy and initiatives to FedEx staffs all over the world through video conference. The link between communication and employees motivation is particularly important. According to RealTime Performance (2009) identify ineffective communication between the managing director and senior managers in the FedEx that led to ineffective work environment. Because employee perceptions about the managing director's styles. Mayo emphasised importance of communication in meeting employees' social needs, and Maslow and Herzberg stressed importance of recognising employee's achievements and self-esteem needs. Therefore, communication is a significant to perform the FedEx managements become effective and efficient.
In the information era, FedEx competitor such as the United Parcel Service (UPS), United States Postal Service (USPS), and DHL, are the major carriers for the e-businesses. Customer satisfaction is the key factor for these carriers to compete for customers. Service quality is critical factor to make the choice for their parcel carrier. This industry has increasingly gained attention during the electronic-business era (Chien et al., 2002; Cho and Park, 2001; Ngudup et al., 2005; Kodama, 2005). Electronic commerce has revolutionized not only the way goods are sold, but also how these goods are delivered. Clients want customized products delivered at a high speed with complete order flexibility and convenience. Today's online customers require instant order tracking from the moment they click the "buy" button until the moment the package arrives on their doorstep (Li et al., 2006). To compete with other competitor, FedEx has deploys some flexibility on global basis to make sure that investments are sound and work well together and follow appropriate standards and architecture. The organisation global logistic has to be an IT-based industry because every part of business is dependent on IT, whether it's the sorting systems in the hub, or for the tracking systems. According to study, "For the operations, we're creating seamless applications to hand-held computers, laptops and desktops through broadband or high performance capabilities of local area networks" said Mr Carter. Therefore, in order to achieve this, FedEx has a large team of developers and IT personnel. Every technology, product, service, solution, or idea must have a tangible benefit for FedEx employees servicing customers or directly for the customer. For example, customer can easily go on line and conduct a transaction or a track of shipment with a laptop in any FedEx store in US. The technology change in the FedEx was the strength customer perspectives to attract more enjoy the service.
Innovation is a tricky concept. Businesses must promote a culture of exploration and creativity, recruit and retain workers devoted to finding new ideas, and build processes that enable business and technology pros to collaborate on potential breakthroughs. In order to provide the best customer experience and earn the loyalty of the customers, FedEx has recruited and retain talented and engaged team members in the innovation development. FedEx innovative culture emanates directly from founder and CEO Fred Smith, who has always put innovation--and, consequently, the IT function--at the center of the firm's agenda. The Memphis, Tenn., shipping giant promotes a culture aimed at continuing to innovate how it ships, tracks and manages packages, as well as how it interacts with customers and partners (Watson, 2008). In few decades, Innovation always is FedEx culture to extent the business. This culture cannot be abolish because took the company to the higher level in delivery industry. So FedEx culture is strength to defeat other deliver company become the largest delivery company in the US. In the BSC, FedEx culture is considered "internal business".
Purple Pipeline Program was launches, elite training system aimed at broadening select employees' leadership abilities and their understanding of corporate objectives--and not just focusing on technical savvy. By this program, managers nominate high-performing workers who have demonstrated their ability to lead and manage staff. In every year, FedEx will choose 40 to 50 workers to enter a six-month program focused on additional training in metrics management and leading employees to produce results more efficiently. Those selected workers remain in their day jobs, but spend 70 to 80 percent of their time in the program. After that phase, the selected workers go into "rotation." They're chosen to move into a position different from their past roles, putting to the test their leadership abilities--and the success of the Pipeline program. In additional, another source of innovation is the FedEx Labs. The facility, which opened in October 2006 in Memphis' warehouse district, houses entrepreneurs from the area and serves as an incubator for pioneering ideas. In other company such as UPS, they did not have any program such as Purple Pipeline Program to train employee become innovative. They only focus on the business area extant and generate maximum profit. Although FedEx culture is innovative, UPS still did not apply innovation in their business. For example, UPS logo still not changing because they don not want to change in the organization. Training and development in FedEx as an important role that can the company continue learning and growth in the future.
The organisation's service-quality indicator (SQI) is used to improve services and circumvent complaints and dissatisfaction. FedEx used to classify complaints systematically, and found that customers were calling to complain about different things. According to study, FedEx uses automated tracking system to gather and track data. Management meets daily to discuss the previous day's performance, and weekly monthly and annual trends are tracked.
Quality action teams (QAT) analyse data contained in the company's major databases to identify the root causes of problems that surface in the SQI reviews. The company has set up one cross-functional team for service component in the SQI to reach its aggressive quality goals. However, FedEx gain commitment to its performance objectives is through performance support. FedEx encourages its employees to be innovative and to make decisions that advanced quality goals and also provides employees with the information and technology they need to continuously improve their performance.
FedEx is the delivery company with $42.7 billion of annual revenue. The company can generate the interesting revenue because of the talent employee contribute their knowledge and strength to make the company achieve the goal. For appreciation the employee, FedEx was launched the Purple Promise awards program. The Purple Promise awards program is a FedEx reward system to reward the employees who are the in good performance and contribution to the company. "There are multiple levels of Purple Promise awards, the highest of which rewards the chosen individual with cash, a trophy, a lapel pin and recognition at an annual event"(Computerworld, 2010). The main purpose of Purple Promise awards program is to motivate personnel to achieve an organisation's goals of productivity, innovation and profitability. Furthermore, the rewards strategy can attract staff and retain staff. As a company have reward system that is the basic requirement to attract the new employee works for the company. Beside, reward system can be motivating employee work in high engagement to achieve an organisation goal.
In additional, FedEx had a variety of online and classroom training options are available to all employees. Multiple online "universities" offer technical and business courses in a variety of disciplines. "The IT group has a flexible training program in which managers meet individually with their employees to create customized development plans that identify training and development opportunities and set goals for each individual" (Computerworld, 2010). Training and development is a significant for every organisation especially in FedEx. Because it can helps for the company continuously to growth. FedEx have good financial that can be organise the classroom training for their employees.
In theoretical, total reward and training and development is the human resource perspective to perform the company in development. To perform management, FedEx is the empowerment of employees which has led to entrepreneurial behaviour among the employees (Schindehutte, Morris & Kocak, 2008). This empowerment is the reason that FedEx is able to adapt quickly to market changes and keep abreast of the development in the global express transportation and logistics sector and ahead of competition.
Through the balanced scorecard, an organization monitors both its current performance (finance, customer satisfaction, and business process results) and its efforts to improve processes, motivate and educate employees, and enhance information systems-its ability to learn and improve.
On the other hand, Balanced Scorecard can uses in other company to derive from company's vision and strategy. It is often using by the organisations to compare and find out the differentiation of few organisations performance. Although, the Balanced Scorecard can use in other company to measure performance, the culture and structure may different with the FedEx. For example, United Parcel Service (UPS) is a parcel delivery companies in the US. The management of the UPS is different compare to FedEx because the culture and structure is different. Thus, the result of performance measure is not same.
FedEx is world largest delivery company in the US. The company have a strong organisation culture there is innovative to let business continue to growth. The organisation culture was become the strength to compete with other company in the same industry. The BSC is functioned as a performance measurement tools through the four perspective - financial, customer, internal business processes and learning and growth. According to the BSC show that FedEx have many loyalty customers enjoy their services. Because the innovation in the company are generate the latest technology based services to attract customer. Although the use of the technology not only benefits to the customer, it also increase the performance in the company. On the other hand, FedEx financial is very good. The company can launched the program are costly. There are the Purple Pipeline Program and classroom training to improve employee performance. Even UPS as the main competitor did not have the training program for employees.
Beside, FedEx department is extremely important because it is the core of FedEx. The department has contributed many technology and innovation to the company.
To perform in good service, FedEx has a performance tools to measure their service. SQI is used to improve services and circumvent complaints and dissatisfaction. FedEx used to classify complaints systematically, and found that customers were calling to complain about different things. SQI has successful to determine employee in diary and the tools is used for maintain the error.