Organizational Culture and Performance

Creating Word Class Performance in a Jaguar Assembly Plant

Multiple Cause Diagram

In the above multiple cause diagram, six feedback loops exist and they relate to the following sub-systems.

Planning

Customer Orders

Purchasing

Stores, and Production

The model indicates that the goal is matching the demand with production and is causal to seamless back-to-back activities in the areas of purchasing, production and planning. The diagram explores significant areas such as the impact changes in customer schedule has on production requirements. Customer schedule changes are difficult to determine precisely, especially as pertains to production due dates and material needs (Tomar, 2008).

The diagram below can be very helpful in identifying the factors driving a certain change event. It can be used to identify "cause chains" and help in the identification of key elements. While it is relatively simple, it indicates clearly why a change is taking place and in doing so it points the way forward as pertains to the needed features of a given system. It was also found to be useful in helping communicate forthcoming changes to workers and was the core for employees and management to hold discussions. The driving factors interacting with one another are displayed in the diagram and it helps identify factors that drive demands (Paton & Mccalman, 2008).

2. Closed Loop Control System

The main advantage enjoyed by a closed loop system is that it is able to lower the sensitivity of a system to outside disturbances, for instance, the door of the dryer being opened, and so making the system impose high levels of control since the controller compensates any changes that happens in the feedback system. The major characteristics of Closed-loop control are (Power Electronics, n.d.):

• Reducing errors by making adjustments to the systems input automatically

• Making an unstable system more stable

• Increasing or reducing the sensitivity of the system

• Enhancing the systems control against disturbances from outside

• Reducing the repeatability and reliability of performance

Knowledge of the basic systems of processes can help in setting up control systems and identifying as well as monitoring the disturbances. The most efficient way to rid a system of external disturbances is therefore reducing or minimizing the disturbances that reach the value system. This will help the system achieve stability. Disturbances reduce the efficiency or alter the purpose of output. Utilizing closed loop transfers help in the reduction or minimization of disturbances significantly (Ahmed & Hussain, 2014).

Essay

1. Organization Goals

Organizations are constituted by groups of individuals to help them achieve ends they cannot pursue and meet individually. By organizing strategy and effort, a group of people is able to achieve greater results than they would have otherwise attained (if they acted alone). Achieving the goals an organization leads to greater order in the organization and increased cooperation among the various parts and functional units within the organizational structure. All the structural parts of an organization are very important and need due consideration, if an organization is to register peak performance. There are several factors that influence how well an organization functions and these factors come from both the external and internal environment. For an organization to survive given these factors, an organization must continually adapt and become more efficient (Tran & Tian, 2013).

The extent to which the workers in an organization are competitive and aggressive instead of solely being co-operative can affect performance. Employees can enter into health or unhealthy competitions among themselves. Where such competition leads to disunity, it impedes the primary aim of organizing effort to attain organizational goals. Organizational performance can be measured by how well an organization achieves the goals it sets. It is therefore necessary that performance be better if better results are to be gotten. An organization's culture can influence their performance. Culture plays a role in how employees behave and feel. Developing a strong and positive culture should be one of the foremost activities executives engage in. A positive culture helps employees develop positive attitudes, increases their self-confidence and enhances their commitment to the firm (Habib, et al., 2014).

One of the companies that have created a good culture and eco-system that promotes and reward performance is Jaguar. Some of the significant achievements Jaguar has made to this end include (JLR, 2013):

i. Investing in their people and ensuring that all decisions support sustainability.

ii. Showing leadership in ensuring sustainability in business practices and activities the world over.

iii. Advancing young people's knowledge by way of education partnerships.

Remuneration Methods

Performance Related Pay

A majority of empirical research on remuneration have mainly focused on outcomes achieved on the short-run as they run standardized tests. While these tests were able to show improvements in achievement in the short-term with increase in remuneration, there is dearth of sufficient data on how increase in investment in human capital affects performance in the long-term. Overall, available data shows that pay pegged on performance tends to enhance performance of workers (Liang, 2015). Many firms today, including Jaguar, offer pay that is completely or partly pegged on performance. This arrangement helps improve efficiency, reduce absenteeism and reduces turnovers as employees gain greater control of their rewards. The effect performance related pay has on productivity depends on the nature and design of the pay structure. Employees can be offered commissions, piece-rate pay or revenue/profit sharing schemes. This can be offered to groups of employees or to individual employees but it has been found that offering the same to individual employees yields even better results (Lucifora, 2015).

Research done on the civil service, education and health sectors showed that PRP schemes had positive effects on all the three. While the effects were all positive, the magnitude differed and this was expected given the variables in place. The research also brings to light why it is important to consider both organizational and economics-based literature when evaluating PRP in both the public and private sectors. The findings show, as expected, that the design of the PRP scheme has an effect on performance. The design should be done in such a way that it encourages efficiency and effectiveness and so improve performance in both volume and quality. Attention should also be given to how the workers perceive the scheme (Bajorek & Bevan, 2015).

Pay secrecy has adverse effects on individual task performance where pay for performance is the mode of operation, especially when the criteria for determining pay isn't absolute but relative, or when assessing pay is objective rather than subjective, especially among high performing workers (Belogolovsky & Bamberger, 2014).

A big body of literature in the areas of PRP holds strong views on the subject that differs strongly with opponents. Evidence shows that when makers of policy are design sensitive and vigilant in stemming risks, PRP can help improve performance in most jobs. Nonetheless, it is not easy drawing conclusive conclusions from these pieces of literature because (Hasnain, et al., 2014):

i. Very few studies are available on PRP in varied organizational contexts. The way things work in the private sector differs a great deal from the way things work in the public sector.

ii. There are not enough studies to show how PRP performs in a highly bureaucratic environment.

iii. Most of the studies have focused on the short-term and not enough studies have tracked how PRP affects performance in the long-term (Hasnain, et al., 2014).

PRP schemes can help improve productivity in a firm. Individual schemes are linked with bigger increases in productivity while group schemes and profit-sharing incentives record smaller increases. Empirical evidence shows that policy interventions that push for PRP can be very successful in enhancing productivity for a number of small or young firms (Lucifora, 2015).

Jaguar Practices

Jaguar is committed to ensuring an inclusive process when designing pay and often negotiates the pay structure and design with employees and labor unions. The company often commits to two-year pay deals with the workers' unions. The deals proposed are then put to vote and the one decided by the majority is implemented (JLR, 2013).

2. Organizational Structure on Effectiveness and Performance

The defining factor of the new way of doing things for organizations is being able to utilize their knowledge, distribution and production and affiliation assets to realize maximum economic value. While the new knowledge economy requires players to develop greater capacity for competitiveness, managers are finding it increasingly hard to induce change through knowledge management programs. This can be even harder if it is a very old organization that has long standing cultures and traditions. Organizations today, in developing organizational capability, cannot ignore knowledge infrastructure which consists of the organization's culture and structure, its technology and its knowledge process architecture of conversion, acquisition, protection and application (Gold, et al., 2001).

Knowledge management practices tend to be specific to the context of application and so can influence an organization's effectiveness. Knowledge management mediates fully the impact organizational culture has on effectiveness and mediates partially the impact organizational strategy and structure has on effectiveness (Zheng, et al., 2010). Performance can be attributed to the decisions an organization makes rather than the external conditions. The implication is that mismanagement, and not misfortune, is the primary reason an organization fails. While organizations can sometimes fail because of adverse external conditions, oftentimes it is the managerial inability to make the decision to adapt that steer the organization towards irrelevance (Andrews, et al., 2007).

Jaguar Practices

The grievance procedure at Jaguar follows the company's Advisory, Conciliation, and Arbitration Service (ACAS) guidelines. Where an employee raises a grievance with a union, a discussion is set up with the line manager as the first step to solving the issue. If the issue is not solved, the area manager takes up the issue. If it remains unsolved, then it proceeds to the office of the human resources manager of the plant. If all these fail then a Joint Negotiating Committee is the last port of call (JLR, 2013).

3. Role of Organizational Culture

Organizational culture plays a very significant role in decision-making and the conceptualization of an organization's strategy and actions. It gives sense to most of the behaviors of the members of the organizations and influences how internal and external members view the organization (Ravasi & Schultz, 2006). Organizational culture is so important that a piece of technology adopted by a firm that had met all the requirements during the testing phase may fail because of the intricacies of how culture affects use of the technology. Organizational culture is subject to change and is malleable and so it is not easy to quantify and measure (Hoffman & Klepper, 2006).