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No enterprise will be successful in this competitive era without a solid, integrated strategic plan directed by a clear vision and supported by a strong performance management system.
Performance management is the system through which organizations set work goals, determine performance standards, assign and evaluate work, provide performance feedback, determine training and development needs and distribute rewards. (Briscoe and Claus, 2008)
This study is based on Eletropart Co which is electronic manufacturer and distributor. It encompasses parts for PC market although company is relatively small with only 43 employees. The company is generating satisfactory level of profit however, the performance level of company is getting low and there is high turn over of employee.
Hence, for the improvement of performance level, this study is going to set performance targets of team to meet strategic objectives and agree team performance to contribute to meeting strategic objective of Electropart Company. This study is also going to monitor actions and activities defined to improve team performance. Furthermore, this study will apply influencing persuading skills, to the dynamics and politics of personal interactions. Finally this study will end with summary and findings and make recommendations for further improvement of performance level.
Elecparts Company will strive to be best-in-class as a distributor of quality PC products and services and a responsible corporate citizen.
Elecparts Company is committed to providing the highest quality products, competitively priced, with services exceeding our customer's expectations. We will continue to invest in facilities, systems and highly trained technical personnel providing added-value to our business relationships.
Sustaining the stable level of costs based on strong skills of continuous improvement in operations, development and distribution of high quality PC solution.
Creating proper environment for professional growth of highly skilled professionals, competitive staff remuneration and social benefits in accordance with scope and quality of their work.
Further improvements in corporate governance through restructuring of assets and optimization of management processes.
Values: Information technology is a cornerstone of our quality of life. There will be a continuing need for products and services to harness its use.
Our success depends upon people: the people who shop with us and the people who work with us. This expresses our values:
No one tries harder for customers: Understand customers, be first to meet their needs and act responsibility for our communities.
Treat people as we like to be treated: Work as team, trust and respect each other listen, support and say thank you and share knowledge and experience.
Key results area:
To get better cash flow increase sales by 5%
Reduce high staff turnover rate.
Provide managerial training to all technical managers which will develop core management skills.
Increase customer retention rate/ customer loyalty.
Improve quality of product.
Assess the links between team performance and strategic objectives of ElectParts:
Each and every organization stands with certain strategic aims and objective which they want to accomplish and it is the reason of that organization's existence which directs the organizations.
Team performance focus on setting and achieving goals at employee level, and identifying and fixing barriers related to achieving those goals. But the question is that from where these goals come from. That's where strategic planning comes in. In turn, strategic objective are used to determine and analyze the goals and objective of every single team or work unit.
Furthermore, without better team performance ElectParts can't meet desire target level and to accomplish its strategic objectives it needs to get the desire target level. Hence, there is no value of vision, mission and strategic objective without link with team performance. In order to accomplish the strategic objective ElecParts is applying performance management tools to align team performance with strategic objectives. ElectParts communicates about what is to be achieved to meet desire future state. To ensure that desire performance level is to be achieved it focuses on developing people's skills and competencies and it also provides the support and guidance for individual and team as well. In this case there is vital role of change management. To get desire level of performance team leader should able to develop change culture in an organization as per need. In that situation team member may resist. To over come from that resistance team leader can develop effective communication mechanism and set reward system to potential team member. Furthermore, there is a designed set of work for individual as well as team to achieve goals and objectives and team leader is capable to develop employee's skills to derive job satisfaction and optimum potential utility from them.
1.2 Evaluate tools and techniques available to set team performance targets
Team performance targets are the success measures of organization's performance management system which defined by performance indicators. In other words, performance targets concern with desire level of performance which organization wants to meet.
There are various tools and techniques in use to set team performance target of an organization. Such as the McKinsey 7S Framework, the Balanced Scorecard, the EFQM Excellence Model, Six Sigma Model etc. However, this study is going to discuss the McKinsey 7S Framework, the Balanced Scorecard to set the performance targets of ElecPart Comapny.
1. The McKinsey 7S Framework
This framework is a management model that describes 7 interdependent factors to organize a corporation in and holistic and effective way which are categorised as soft and hard elements according to easy and hard to influence. Together these factors determine the way in which company performs. The main focus of this framework is to align team performance with strategic objective of the company.
Figure: The McKinsey 7s Framework
7 element of this model:
Strategy: the direction and scope of the company over the long term.
Structure: The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc
System: The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems.
Skills: The capabilities and competencies that exist within the company what does it best.
Share value: The value and belief of the organization. Ultimately they guide employees towards valued behavior.
Style: the leadership approach of top management and the company's overall operating approach.
Hence, this framework is crucial to set the performance target because it covers the all the elements which need to set effective performance target of a team and it is very clear about the combination of the elements to achieve target as well. Furthermore, these 7 independent elements are crucial to analyze to current situation and get the targeted performance.
However, there are inconsistencies between some of elements. If strategic leader fail to pay attention to one of element this may affect all elements as well.
2. Balance Scorecard
The Balanced Scorecard can help to set performance target by providing a focus that unifies all parts of the business. It provides a methodology that turns the eyes of team to a single direction. The Balanced Scorecard can therefore be a very effective tool to set performance target, breaking down the barriers between team islands, improving an overall team performance and thereby improving organisational performance. This method keeps close eye on the four different prospective to set effective team performance targets.
Figure: Balance Scorecard
Financial prospective: includes measures return on capital, cash flow, revenue growth, liquidity, cost reduction, project profitability, performance reliability, Work (workers) and those who supervise and plan it (managers).
Customer prospective: includes measures market share, transaction cost ratios, customer loyalty satisfaction surveys/index, supplier relationships and key accounts.
Internal business process prospective: includes efficiency measures of working practices and production processes, cycle times, unit costs, defect rates, time to market.
Learning and growth prospective: includes measures productivity of entrepreneurship, new ideas and suggestions from employees, employee satisfaction, skill levels, staff attitude, retention and profitability, rate of improvement.
This model is crucial to set performance targets because it shows the inter-relationships goals and linked activities which create an understanding of what is going on elsewhere in the organization and shows team how they are contributing. Furthermore, it provides the accurate and timely information is fed into the system. However, in some cases this model creates the complexity in implementation process.
1.3 Assess the value of team performance tools to measure future team performance:
2.1 Analyse how to determine required performance targets within teams against current performance.
The determining of required performance target is an important test of the design of a performance measure. The comparison of current performance with targeted performance is the main method by which performance measurement data alerts managers to the need to make interventions to 'improve' performance. Without a required performance targets, performance measurement data is hard to appraise. ElecParts is using balance score card as a strategic technique to determine the target values. Balance scorecard focus on balance presentation on both financial and operational measures because there is no single measure that can focus into critical areas of the ElecParts. By the implication of balance scorecard the strategic leader may deal with following questions to determine the required performance target that also helps to scan the current performance of ElecParts.
Customer prospective: Customer are not satisfy with its product and customer are not retaining because sales is declineing.
Financial prospective: company is not generating satisfactory level of cashflow.
Internal business prospective: company is weak in internal performance because it is suffering by high staff turnover.
Innovation and learning prospective: company is weak in innovation and in terms of training and learning it is offering managerial skills package to technical manager but it is not so effective.
By analysis of above four independent components it can be argued that the performance of the ElecParts is not favourable so it needs some effort to improve current performance that needs a set of performance target. Hence, the team is going to determine integration of work target to improve the current performance level of ElectParts. Works targets can be set at different level as follows.
Corporate level: improve level of customer service of ElectParts.
Management level: ensure the corporate level targets.
Functional level: set out the precise targets related to corporate objective that must align with department.
Team level: at this level team are closed to purpose and accountability and they contribute for it.
Individual level: individual are responsible for key result area or core task.
This is the two way process of setting performance target that is top to bottom and bottom up approach.
2.2 Discuss the need to encourage individual commitment to team performance in achievement of organisational objective
To maximize performance of team requires that each individual make a serious and concerted effort to grow in both interpersonal and task accomplishment. Even one or two members who are unwilling to commit a shared responsibility for the team's initiative can sabotage the team performance and its ability to execute its objectives. An effective performance management system must align individual performance with the organization's strategic objective. Hence, motivated individual commitment to team is crucial to accomplish strategic objective. So team leader should able to encourage individual towards shared responsibility. The team of ElectParts has clear vision towards leadership style that can affect encouragement of individual towards team sprit. There various leadership styles to direct team towards organizational goals i.e. autocratic, participative, free-rein etc. However, ElectParts is adopting participative style to encourage individual to team performance because of this style can be given to employees as a opportunity to participate on decision making, suggestions system and goal setting which helps to increase motivation level of employee and in terms of leader the leader themselves move with team and facilitate the process.
Furthermore, another way of motivate team member is establishment of rewards system to potential members and implication of motivation theories i.e. expectancy theory. Empowerment is another way to gain commitment of individual for this ElectParts can design job in such way there would be chance for self control and direction, job should not limit hoe staff achieve goal and attachment the organizational goal.
Finally, being a contributing effective team player many times necessitates moving out of one's comfort zone, taking risk and making behavioural and attitude change. To do so can be highly rewarding.
2.3 Relate the application of delegation, mentoring and coaching to the achievement of the organisational objectives
Delegation allows employees to use and develop their skills and knowledge, they can act and initiate independently but responsible with upper authority level in certain task without delegation employee may loose their full value. The main purpose of delegation is to get job done by someone else with effective independent decision making and changes which depend upon new information. In terms of ElectParts, with delegation staff have the authority to cope to situations without referring back to team leader that reflect the speed of task which is very important in terms of achieving organizational objective.
ElectParts can use coaching as a technique to develop individual skills, knowledge and attitudes to get job done smoothly. For this, ElectParts is keeping eye at non directive coaching with largely sufficient skill and confident in their role. ElectParts set objectives for conducting coaching.
To determine current performance level and what they need to develop for team performance.
To delegate new and enlarge area of task with appropriate guidance.
Monitoring performance in work place.
To fulfil those objectives ElectParts is using a systematic process of coaching which can be clear by following figure.
The above process helps to ElectParts to minimize the skills gap to achieve objective. These stages involve in day to day operation but mentoring talks about more it that describe about long term career development for best prospective of ElectParts. For this, the company is utilizing the idea of the individual who has extensive knowledge within the mentee's business and going to implement mentoring as more of an informal and board-reaching relationship. This can contribute to the development of skilled workforce as well as skill individual performer which helps to achieve the strategic objective.
2.4 Evaluate a team performance plan to meet organisational objectives
A team performance plan is a detailed plan which must align with strategic objective that talks about desire performance level of the team, the way of achieving these performance levels, providing guidance and direction to the team and measuring progress towards the desired performance levels.
In terms of ElectParts, the team performance plan discuss about understanding key result area, performance measure, required action to achieve goals and the way of achievement of objectives. The key purpose of the team performance plan is to align team goal with company's goal. Analysing the team performance plan it is feasible, clear, motivating and distinctive. Furthermore, it indicates the main component of strategy and it also reflects the way of accomplishment of team objective as well as organizational goals.
Hence, it can be argued that the team performance plan of ElectParts helps to meet the organizational goals.
3.1 Assess the process for monitoring team performance and initiate changes where necessary
Once team performance plan has been implemented it needs to monitor to determine whether the plan is worth doing or not. It helps to identify where things are going well to provide the foundation for building further success and where things are not going so well so that the necessary corrective action can be taken. It can be done collective or individual levels.
To monitor team performance ElectParts can use four steps: plan, do, check, act technique. This is an ongoing process it needs to revise in certain time interval. With this approach team performance be placed in continuous feedback loop so that team leader able to identify and change the parts of the process that need improvements. To monitor team performance ElectParts can develop question what purpose does measuring and monitoring serve, to whom?
By analysing team performance of ElectParts seems satisfactory, it is doing better towards achieving the desire targets. Team is performing according to team performance plan it is not deviated from its way. So in this situation there is no need of any change initiative. However, in future there may need of change initiative it can be determined by the feedback. Monitoring performance is the basis for providing and generating feedback which helps to team to take corrective action. By monitoring team can get both positive and negative feedback. Positive feedback recognizes performance achievement and continuously encourages and gathers efforts to produce the required results. But negative feedback recognizes where and when performance fell below expectations and identifies ways to enhance performance.
3.2 Evaluate team performance against agreed objectives of the plan
By comparing team performance with objectives of the plan, ElectParts is not facing gap between strategic performance of team and strategic objectives of the business. However, it is not the case of every time, sometimes there may arise gaps between achievement and objectives of the plan of ElectParts. There may favourable or unfavourable deviation if the performance is exceeding the expectation the gap is favourable and if the performance is lower than expectation there will be unfavourable gap. By the helps of 7S framework ElectParts can align team performance and agreed plan with strategic objective and also can get answer of the question why gap take place in team performance.
System: the system of ElectParts is functioning properly or not.
Skills: do the company have required level of competencies within ElectParts?
Structure: is ElectParts has proper organized structure and does it appropriate to deliver results?
Style: do the management style support and encourage the team towards targets?
Strategy: is the strategy of ElectParts relevant to the current market scenario?
Staff: does Electparts have sufficient staff with required skills and competencies to meet strategic objectives?
3.3 Evaluate the impact of the team performance in contributing to meeting strategic objectives
From the performance management prospective, achievement of strategic objective mainly depends upon team performance. In context of ElectParts, it is struggling with poor performance which reflects the inability of management to create an effective team atmosphere for the team to work, imposition of top-down decision to the team, inability of executive team members to share the decision making responsibility, unproductive team meetings leading to confusion rather than clarity because of consensus about decisions was rarely reached. There is an interpersonal conflict between team and small sub group of team members, MD and some key management as well. Productivity, motivation level and team moral have been declining which was reflected by high staff turnover. Management is fundamentally unable to diagnose team's problems. Within ElectParts team building skills that have exercised to solve the team's problem before has spiralled out of control.
Due to the unclear goals and performance metrics and composition of irrelevant people with the irrelevant skills of the task at hand, the team is getting under-performed. Moreover, the reason behind this poor performance are team's dynamics may not foster creativity and effective decision making and team is unclear about how to solve the conflicts and improve performance. ElectParts has experienced that the poor performance is mostly because of team's inability to systematically engage people in team building activities, team process for evaluating team performance and engaging people in problem and solving activities that lead to enhanced team performance. Hence, ElectParts is not getting expected worth from team to accomplish strategic objective.
To get enhanced team performance to meet strategic objective ElectParts can focus more on high performing team. Within high performing team, member's skills, competencies and attitudes enable to accomplish team goals because team goals are set by themselves, they able to make decision, communicate, manage conflict, solve problems in a supportive way and create trusting atmosphere. ElectParts can establish system to select team member who are skilled and motivated and to develop the technical and interpersonal skills of team members as well as their commitment to achieving team goals. Furthermore, company can manage the team differently depending on the skills and motivation of the team differently depending on the skills and motivation of team members encourage individuals who lack of skills and motivation. ElectParts ensure that the team is well sized which usually refers team neither too small nor too big to achieve objectives.
4.1 Determine influencing and persuading methodologies to gain the commitment of individuals to a course of action
ElectParts management can use 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 organization and by giving them monetary incentives through bonus and other performance related pay increments. This is a proven methodology to gain individual commitment to curse of action within ElectParts.
ElectParts also used politics to encourage individual to gain staff's commitment in their work place. For this company aligned individual interest to organizational interest to reduce resistance, it analyzed individual situation to influence them and treat them according to their situation to motivate and gain commitment such as what motivates them or how they want to perceive them. The company develop system to offer right person in right place to encourage them and try to take advantage from their intrapersonal skill by offering incentives as well. Side by side ElectParts has used reward system to motivate and gain commitment of staff i.e. extra pay for potential staff, profit sharing scheme etc. Staff training and development is another tool that Electparts uses to engage with its staff and to enrich their experience of working with them.
Furthermore, task inducement approach is another technique for ElectParts to gain member's commitment. Within this approach wide range of different conditions task inducement can be key means to motivate them. Social cultural inducement approach is also possible tools to gain individual support to meet strategic objective in this approach, leaders and individuals are perceived to adjust to society and the cultural environment within which they interact. It is assume that individual attributes and perform according to these expectations. Alternatively, perceptions of what makes up acceptable behaviour or performance reinforce both the individual's performance and their expectations of leaders and managers. By this ElectParts can get loyal staff who dedicated to achieve organizational goals.
4.2 Discuss the impact of individual dynamics, interests and organisational politics on securing the commitment of individuals to a course of action
Within Electparts organizational polities touch in the core of elements of impact of individual dynamics. ElectParts is looking organizational politics from three different prospective in order to secure individual commitment to a course of action.
Personal and personality variables: In this prospective Electparts focusing on individual dynamics such as age, gender, Machiavellianism, self monitoring etc.
Job or work variables: Job autonomy, job variety, feed back, advancement opportunities, interaction with others is the main consideration of this sections with in company.
Organizational variables: in this section company keeping eye on centralization and formalization, hierarchical labels, span of control.
The following charts relate the organizational polities, individual dynamics and interests.
Overtime variables were also added to three main group including job satisfaction and individual commitment. Organizational politics directs to the establishment of a contingent approach towards the effect of organizational politics on securing the individual commitment. This relationship is expected to involve several elements two are quite new in regard to organizational politics.
Electparts understanding peoples and situation and addressing that using relevant behaviour appropriate to this situation. Company is creating environment for optimum utilization of individual interpersonal skills as well as personal skills effectively and build relationship with individual. Individual competency such as proactively seeking opportunities for beneficial align, integrating different interest and approaches of individuals.