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Performance Management System, also known as PMS, is where companies implement to ensure the performances of the company happens by plans and designs and not by chance or luck. Its a systematic process for company to involve employees to support and improve the company's effectiveness by focusing and educating them to achieve the company's mission and goals. Appendix 1 shows the radial diagram of PMS. There are four functional blocks that are associated as the PMS concept; there are strategic choice and strategic analysis, management by key performance indicators, corporate budgeting and planning, and finally consolidated financial reporting (Isaev, 2011).
The current trend in PMS is the link between the organizational performance and employee performance management. Lots of companies are focusing on 'strategic HR', to align human resources initiatives with the mission and goals of the company to improve business success (Insala, 2012). The benefit of PMS is employees of the company able to understand the importance of their contributions to the company's objectives and goals. If the employees are able to commit, the company's performance will also improve, and with good system and communication going on, employees may also be loyal and more productivity will be improved (MSG, 2012). The scope of PMS is to identify the performance and states all of it clearly. Besides that, it is important to set performance standard, to identify competencies and competency gaps that hinder to performance, and to promote and recognize performance culture (Mohan, 2009).
Dell Inc is one of the most famous computer technology companies in the world. They are located in Texas, United States. The company was founded by Michael Dell. Currently, there are more than 100,000 people employed in Dell worldwide. Dell is ranked 44 in the fortune 500. They are the third biggest computer vendor in the world behind HP and Lenovo (Dell, 2012).
The performance management system of Dell is the company relies on their opportunity and teamwork from their employees. Every employee's individual goals are linked to organizational performance (Asim, 2011).
Dell continuously invests in systems and process to select the right talent in the right roles. They had their own talent planning which was created by the company's Executive Leadership Team. During the processes, there are several types of plans where the Executive Leadership Team may look to; there are developing talent imperatives, forecast talent needs, assess and calibrate talent, identify the development actions for best talents, and progression report to review. This system was made to develop and create the next leader of Dell from years to years (Dell, 2012).
Every year the managers provide 360-degree feedback. Their employees will receive training, feedback, and on-the-job development. Therefore the managers and employees mutually had created the employee development plan. With good and effective PMS from Dell, it allowed the company to have huge market share as well as gain employee's loyalty, which is crucial in today's world (Asim, 2011).
Adidas was founded in 1948 by Adolf Dassler. They are a German multinational company that manufacture and design their own sports accessories and clothing based in Herzogenaurach, Germany. Right now, Adidas is currently the largest manufacturer for sportswear in Europe and second biggest in the world (Adidas, 2012).
Adidas offered variety of trainings and opportunities of development. The development activities are set by Adidas along with a framework (appendix 2). It is to ensure consistent performance and management by the company. Other than that, Adidas apply Performance Evaluation and Planning (PEP) as their performance management. Every employee's performance is base by their business targets and job tasks and they will receive feedback at least once in a year (AdidasGroup, 2012).
Adidas also design their own talent management to identify employees the next leader of the company. They identify their most potential employees by preparing them to participate in certain development programs (appendix 3). Moreover, Adidas also have a Succession management in the company. This approach is made to ensure business continuity. The positions and successors will be discussed by senior management. To motivate their employees, Adidas has their own performance-driven remuneration system. This is to reward their employees with remunerations and benefits to the employees that achieve his or her target (AdidasGroup, 2012).
Both Adidas and Dell focus a lot on developing their employees. Today, many companies will hire someone with wide experience to be a top manager. However, Adidas and Dell prefer their own employees to be trained and developed to be the company's potential top manager. They want their own employees to improve their skills and knowledge, and to retain them to ensure consistent performance for present and future. In both companies, to ensure their employees improve, they always give feedback as well. Dell used 360-degree feedback while Adidas apply PEP as their evaluation for employees to improve themselves and achieve their business target. Other than that, both companies also have talent management to search for their future and potential leader for the company.
While Dell focuses more on teamwork and organizational goals, Adidas focus more on individual's performance to achieve their business target. Adidas had their system called performance-driven remuneration system, whereas benefits focus more on performance, which means good performance from the employee will receive more rewards. As for Dell, they look more on employee skill and career development as motivation for their employees. Besides that, Adidas's PMS is used as a tactic for employees to work as per standard of the company to improve performance whereas Dell's managers and employees mutually create employee development plan. Lastly, Adidas also has their own succession management to choose the most potential employee but Dell mainly only focus on talent management and 360-degree feedback.
Rationale for Similarities & Differences
Although both Dell and Adidas are from different industry, but their target is the same, which is to be the top market share in their respective industry. Both companies are consider as famous brands in the world, therefore to continue as one of the leader in the market, they believe that training and retaining their best worker can give positive influence to the future of the company. Both would want to overcome their competitors, like Adidas would want to overcome Nike and Dell to overcome HP. To be Globalization Company, Adidas and Dell are always alert on their mission and goals. Dell used 360-degree feedback while Adidas apply PEP as their evaluation for employees to improve themselves and achieve their business target. Feedback and evaluation is part on their tactic to keep on track as the leaders of their industry.
The differences of Adidas and Dell are practically because they have different amount of workforce size and organization mission. Dell has roughly more than 110,000 employees in their company; therefore this could be the reason why they focus more on teamwork because they have too many employees and every employee's individual goals are linked to organizational performance. Unlike Adidas which only has around 46,000 workers, they are more flexible to have team goals as well as individual goals. Other than that, many of Adidas products is cheaper than Dell's products, so there will be more individual target in Adidas compare to Dell.
Weakness of Performance Management System
When a company has a good performance management system, every employee may become competitors and compete for position and status. There is a very high chance of backstabbing as well as strong employee rivalry which can lead to conflict. If there is conflict, then it may bring bad influence to the team or department and may end up with bad performance (Brainware, n.d).
If the process of PMS is not pleasant, it may lead to discouragement to employees. In the process, the company should always give encouragement and celebration on what the employee achieve. If the employee had achieve something and no recognition was taken by the company, this can lead to discouragement and de-motivation (Lotich, 2012).
Lack of Rewards
Reward is the main motivation to employees. If there is a total lack of rewarding, the employee's performance will not be effective. They will not be motivated because they don't want to work hard for something not worth to them (Brainware, 2012).
When most the time are spent on supervising and evaluating the employees, the managers may not be able to perform on his job efficiently. It will be tough for them to decide performance and value indicators for measurement. Besides that it's very hard to have same indicators because different job has their own job requirements (Brainware, 2012).
Potential Future Problems
Lack of Leadership Support
More and more leaders care more about their position and ignore their employee's developments. The implementation of PMS has to be supported by top management or leaders. If the leaders fail to encourage their employees, not only their employees will have weak performance but the company's performance as well may face weak results (eHow, 2012).
Managers not well-trained
Nowadays many managers are hired base on experience. However not all managers come from the same background. For example, manager with experience from mobile industry is now working at a food industry. If managers are not trained on how to assess in the company, it will be hard for them to enhance the career path for their employees.
Lack of Monitoring
A PMS implementation must always be monitored. Issues that are detected should correct it before it is too late. Company should develop the monitoring system to systematically collect info, analyze the situation as well as interpret it, then finally to decision making (Brainware, n.d).
In conclusion, it can be concluded that a PMS is a great system and strategy for companies in getting their employees to perform better to achieve target goals. If there are more and more employees that were taught well by their employers, this can influence the organization to greater performance and a potential to succeed in the current and future market.
Dell and Adidas are known today as one of the world's best brand in their respective industry. The performance management system in both companies has their benefits. Top management in both companies is very much aware about their organization and they cannot stop but continue to develop and improve their employee's performance. Dell and Adidas is currently a famous brand because of their employee's contribution and participation in the organization which lead them to great organizational performance to determine success in the market.