Organization Behavior "Performance Management" and "People Performance"

Organization Behavior "Performance Management" and "People Performance" Performance Management and People "Performance Management" and "People Performance" Management SUMMARY The purpose of this paper is to discuss and critically evaluate the Performance Management model by Michael Armstrong and People Performance model by John Purcell. The paper starts with an ample introduction and significance of the employee performance management practices and proceeds by discussing the various concepts and strategies which are incorporated by business organizations all over the world.

The major focus of the paper is to discuss the implications of these models for the success and prosperity of an organization. The main body of the paper discusses these models from a critical perspective and explains their major components in detail.

The most important strategies which are recommended by Performance Management model include performance appraisal and reviews, training and skills development, Management by Objectives (MBO), the techniques to manage the low performers, goal setting, feedback from employees, the role of line managers, managing organizational behavior, and minimizing the employee turnover (Armstrong 2012). The People Performance model by John Purcell recommends the management of employees' performance in four different stages or pillars. These pillars focus on improving the organizational productivity through effective management of employees' performance (Purcell 2007).

Purcell suggests that managers need to focus on all types of employee benefits and working environment in order to get the work done through them in the most effective and efficient fashion (Hutchinson & Purcell 2003). The final section of the paper gives a set of recommendations to the managers which they can follow to manage their employees' performance and ensure their organization's success. The whole discussion is made in the light of the most relevant literature including books and pearly-reviewed journal articles.

The paper concludes by discussing the key findings from the discussion. INTRODUCTION Employees are considered as the most precious asset for an organization. The success, competitiveness, financial performance, and sustainability of the organizations largely depend upon the performance of their employees. Keeping in view the importance of this precious resource for their success and prosperity; organizations give strong focus on their human resource management policies and practices. They incorporate different strategies and practices to manage their human resources in an effective, efficient, and well-organized fashion (Hutchinson & Purcell 2003).

These strategies and practices include effective recruitment and selection, training and skills development, cultural diversity management, leadership and motivation, performance appraisals, job rotation, enlargement, and enrichment, brainstorming, and others. The practices which are directly focused on managing the employees' behavior, attitude, and working patterns are called people management practices whereas those which deal with the management of their performance at the workplace are called people performance or performance management practices. Every employee is expected to contribute his best part towards the achievement of organizational objectives.

The Board of Directors and the Top Management sets policies and procedures for the employees on how they can achieve those targets in an effective and efficient manner. But when the Management feels that its employees are not meeting the performance criteria, it has to rethink its performance appraisal techniques as well as look at the performance of each individual employee. It enables them to know the ways in which they can improve their performance and ensure an increased organizational productivity (Becker & Gerhart 1996).

Performance Management: Michael Armstrong presented various strategies in his Performance Management model which can be incorporated by organizations to manage the performance of their employees. His research contributions are mainly focused on improving the employees' productivity through performance appraisal, leadership, motivation, and training or skills development practices. The following section presents a comprehensive discussion on Michael Armstrong's Performance Management model from a critical perspective. Employee Performance Appraisal and Reviews: Performance appraisal is one of the most commonly practiced human resource management strategies in the world.

It refers to the continuous monitoring of the employees' performance by their managers or leaders. In his performance management model, Michael Armstrong has given strong emphasis on the significance of performance appraisal and review for an organization's success. He believes that organizations' productivity can be increased if their managers keep an eye on the performance of their employees. Performance appraisal and review is the best management technique to monitor the performance of employees.

Managers can use this technique in multiple ways depending upon the situation or each employee's individual working patterns. For example, a manager can review the performance and learning of his employees through periodical performance monitoring. This monitoring can either be done on timely basis or upon the completion of certain short-term project or target (Armstrong 2012). The biggest benefit of performance appraisal and review is that it enables the managers to find inefficiencies in the working patterns and job performance of their employees.

The performance review process starts with the assessment of individual performance of all the organizational members. At this stage, the manager categorizes his employees or subordinates in two groups: high performers and low performers. After the performance appraisal process, the high performing employees are appraised and rewarded through different financial and non-financial benefits. For example, they are given job promotions, bonuses, awards, and various other appraisals (Armstrong 2012). In addition to performance appraisal and review by the supervisors, the managers may also require all the organizational members to do their self-assessment.

To perform this activity, the organizational members may be provided with a standard format or questionnaire to fill for them. This activity also enables the managers to judge the employees' attitude towards the organization; their strengths and weaknesses, individual goals, future plans, expectation from the Management, recommendation for improving the working environment etc. (Becker & Huselid 2006). Management by Objectives (MBO): Management by Objective (MBO) is another widely used management technique used to assess and appraise the performance of employees.

In this technique, managers try to involve their lower to middle level employees in the decision making process for the short-term endeavors and targets of their organization. They ask these employees to think beyond their current job responsibilities and give feedback on how the organization can improve its performance (Gerhart 2005). In his Performance Management model, Michael Armstrong has rated Management by Objective as one of the most effective techniques of human resource management.

He believes that Management by Objective brings innovation and improvement in the company's existing process and procedures through feedback given by lower level employees (Gardner, Moynihan, Park, & Wright 2001). Michael Armstrong argues that lower level employees can give better recommendation on how the organization can remove the issues and inefficiencies in its business operations. Reason being, they are more familiar with the day-to-day operational activities like production, sales and marketing, supply chain network, research and development, distribution, customer services, etc.

Management by Objective (MBO) is also considered as a strong tool for increasing the morale of employees. Managers can use this technique to motivate those employees who feel few or no growth opportunities in the organization. With the help MBO technique, managers can ensure full participation and contribution of their lower to middle level employee in the process of organizational improvement (Armstrong 2012). Managing Under-Performance: For high performing employees, managers allocate cash incentives and non-monetary benefits so that they remain satisfied with their job and committed towards their organizational goals.

Converse to the high performers, there are employees who could not perform better due to various personal and professional reasons. In order to encounter these reasons and make these low performers to perform well, managers use different motivational techniques (Hutchinson & Purcell 2003). These motivational techniques may include financial benefits or customized training solutions depending upon on the reason for low performance. Once the manager assesses the true reason for this performance, he chooses the right method of employee motivation or training (Boxall & Purcell 2003).

For example, if an employee could not perform well due to lack of required skills, knowledge, or competencies, the manager arranges special training and skills development sessions in order to make him equipped with the latest knowledge about his job responsibilities. Similarly, if the employee does not perform due to lack of motivation, the manager makes efforts to increase his compensation package and give him competitive salary.

These efforts enhance the morale and motivation of the low performing employees which is essential for the better performance and productivity of the organization (Armstrong 2012). Lack of training and skills development practices can cause various problems for an organization. Training is essential for every old and newly joined employee. It not only grooms them for their better performance at the workplace, but also makes them equipped with the most advanced knowledge and skills in their area of job responsibilities. Lack of training and development affects the entire organizational setup.

For example, when an employee is not fully trained to perform his duties in a particular job assignment, he will cause an inefficient use of organizational resources and may put the company in serious financial difficulties (Chen & Farh 2002). Moreover, some employees need training in multiple areas of job responsibilities. It enhances their need to learn new things and adapt to the changing organizational requirements quickly.

In order to fill the gap between training and development needs and the organizational requirements, the Management must institute an effective people performance management system for all categories of its workforce (Boselie, Dietz, & Boon 2005). Goal Setting: Managers are assigned different short-term and long-term targets which they have to achieve through their subordinates within specified deadlines and allocated resources. In order to accomplish these targets in an effective and efficient fashion, the managers need to get the work done through their subordinates in a well-organized fashion.

The Performance Management model by Michael Armstrong gives a special focus on goal setting for the achievement of organizational objectives in a cost-efficient way. Armstrong believes that managers can divide their big targets into small targets and assign them to teams. These teams further divide their targets into sub-targets which are assigned to individual team members according to their interests and areas of expertise (Boxall & Purcell 2003).

Armstrong has presented a set of important strategies which managers need to follow in order to ensure that their goals are being achieved effectively. According to his Performance Management model, the goals must be achievable, clear, and time-specific. Those goals which are ambiguous and come up without specified deadline are difficult to be achieved by the team members. A number of research studies have been done which relate the organizational success and competitiveness to the effective achievement of goals.

Most of these research studies also rank goal setting and accomplishment as one of the major functions of a business manager (Guest, Michie, Sheehan, & Conway 2000). Feedback from Internal Customers: Employees are the internal customers of an organization. Thus, the feedback which organization gets from these internal customers is also important for its effective functioning and performance. In order to ensure a continuous improvement in the organization's productivity, the managers need to get feedback from their employees on regular basis.

This feedback may come with the help of Management by Objective (MBO) technique. However, those employees who do not participate in MBO programs can also give their feedback to the managers if there is an effective communication system within the organization. Feedback enables the managers to resolve the issues and problems in the organization's working environment, operational setup, and related services (Becker & Huselid 2006). Leadership: Leadership is one of the core functions of a manager. It is also considered as the key to organizational success and prosperity in its industry.

From goal setting and strategic planning to problem solving and employee motivation -- leadership is essential in all the organizational processes and affairs in one way or another. For a manager to be successful in his career, he must possess strong leadership skills. These skills can help him in managing the organizational members effectively and get the work done through them efficiently (Hutchinson & Purcell 2003). Researchers are of the view that effective leadership improves the employees' performance at all organizational levels.

They argue that employees always need guidance and direction by their supervisors and leaders in performing their job responsibilities in an effective and efficient way. If leaders are not there, the employees cannot work according to the expected criteria or standards which ultimately results in an inefficient use of organizational resources. Effective leadership is essential for organizational success because it is directly related to the organizations' strategic planning and direction.

There are leaders at the Top organizational positions in the form of Board of Directors and Senior Management that set the direction for the organization's strategic moves in its industry. At the same time, these leaders are responsible to ensure strong industrial relations. They have to formulate policies and strategies that show the organization's true concern for its employees. The Board of Directors needs to design the organization wide Human Resource Management policies which are both in favor of the organization as well as acceptable for its employees (Armstrong 2012).

The Role of Line Managers: Line managers are the lower level managers in an organization. They are the direct supervisors of the low level employees and daily wage workers in the organization. Most of the researchers believe that line managers can be regarded as the most responsible personnel for the performance and productivity of the organization's lower level staff. Reason being, they have to get the work done from these people in a standardized format and working patterns.

They have to set the working hours, job positions and work options, leave and job rotations, and other job-related decisions for their employees (Hutchinson & Purcell 2003). Line managers largely contribute in improving the organizational productivity through its employees. As line managers directly report to the middle and top managers about the progress and learning of their subordinates, they better know which employee is performing better than the others. This thing helps the top managers in their succession planning practices, i.e.

selecting the right individuals from the bottom level to fill the top level positions in the organization (Bratton & Gold 2003). Managing Employee Turnover: Turnover refers to the ratio between employees who left the organization to the employees who join it during a particular period of time. For any type of organization, high turnover can be dangerous; both operationally and financially. It not only disturbs the continuous performance of business operations, but also costs in the form of expenditures on new recruitment and selection processes (Gerhart 2005).

When an employee leaves the organization, all his job responsibilities and tasks are temporarily assigned to his coworkers. In this way, it also disturbs the routine performance of these coworkers which ultimately affects the organizational productivity. Therefore, when an organization observes a high turnover, it must realize that its organizational setup lacks an effective people performance management (Chen & Farh 2002). The People Performance: The People Performance model presented by John Purcell has great implications for the organizations to ensure remarkable success and competitiveness through their human resource.

His contributions are mainly focused on managing the employees' performance and productivity through consolidated effect of all the major human resource management policies and practices. He has based his People Performance model on four important pillars. The first pillar, human resource management entails all those activities and day-to-day practices which are related to the effective management of employees' behavior, morale, and work options (Purcell 2007). Purcell believes that organizations should equally focus on the intrinsic side of their human resource management practices, i.e.

The employees should not only be provided with good salary, compensation benefits, and learning opportunities; the working options and the work environment is also equally important for their efficient performance. He believes that organizations should provide them flexible work options so that they can achieve a good balance between their personal life and the professional career (Guest, Michie, Sheehan, & Conway 2000). The second pillar of his model focuses on providing sufficient training, motivation, and opportunities to the employees so that they can effectively contribute towards the organization's success.

The third pillar takes the role of line managers in the employees' performance improvement process whereas the last pillar focuses on analyzing employee behavior and outcomes on regular basis (Purcell 2007). Organizational Behavior: Organizational behavior entails the observable actions and attitudes of individuals within an organization. It is developed by the organizational members through common beliefs and thoughts which they share within their workplace and express to the outside world.

In order to analyze the behavioral components within an organization, it is imperative to look at its culture which is the collection of communication and interaction among its employees and the efforts which it makes to strengthen this culture and improve its employees' performance through different motivational techniques (Bratton & Gold 2003). Both Purcell and Armstrong have also highlighted organizational behavior as an important parameter to judge whether an organization is moving in the right direction towards its success or not.

They believe that organizational behavior tells the hidden stories from the organization's internal contexts which are untold in its formal publications. Therefore, managers also need to focus on building strong organizational culture and instituting an effective communication system within the organization (Becker & Gerhart 1996). RECOMMENDATIONS Keeping in.