assignment 5

DOCTORAL STUDY PROJECT TITLE

Trident University International [year]

Guidelines: Left justified. No indents. No citations.

Maximum length is 350 words. A proposal abstract includes items 1-4, and is in the future tense. The final version is in past tense and includes items 1–6.

1. Introduce the study topic briefly.

2. Clearly articulate the study problem and purpose

3. State the research method.

4. Identify the participants.

5. Present key results.

6. Present conclusions and recommendations for future research.

iv

ABSTRACT ii PREFACE iii ACKNOWLEDGMENTS iv TABLE OF CONTENTS iv LIST OF TABLES v LIST OF FIGURES vi CHAPTER I: INTRODUCTION 7 Background 7 Statement of the Problem 7 Purpose of the Study 8 Conceptual Framework 9 Research Questions 9 Nature of the Study 10 Significance of the Study 10 Definition of Key Terms 11 Summary 11 CHAPTER II: LITERATURE REVIEW 12 Documentation 12 Theme/Subtopic [repeat as needed] 12 Summary 13 Level 1: Centered, Boldface, Uppercase and Lowercase Heading 14 Level 2: Flush Left, Boldface, Uppercase and Lowercase Heading 14 CHAPTER III: METHODOLOGY 15 Research Methods and Design(s) 15 Population 16 Sample 16 Materials/Instruments 17 Data Collection, Processing, and Analysis 17 Assumptions 18 Limitations 18 Delimitations 18 Ethical Assurances 19 Summary 19 Level 1: Centered, Boldface, Uppercase and Lowercase Heading 20 Level 2: Flush Left, Boldface, Uppercase and Lowercase Heading 20 CHAPTER IV: DATA COLLECTION AND DATA ANALYSIS 21 Results 21 Evaluation of Findings 22 Summary 22 Level 1: Centered, Boldface, Uppercase and Lowercase Heading 23 Level 2: Flush Left, Boldface, Uppercase and Lowercase Heading 23 CHAPTER V: APPLICATION TO PRACTICE AND DISCUSSION 24 Implications 24 Recommendations 24 Conclusions 24 Level 1: Centered, Boldface, Uppercase and Lowercase Heading 25 Level 2: Flush Left, Boldface, Uppercase and Lowercase Heading 25 REFERENCES 26 APPENDIX A: TITLE OF APPENDIX A 28 APPENDIX B: General Guidelines to Remember about Formatting 29

[Use Word's Table of Figures feature (using caption style = "table") to create this section. Note that each table title needs to be created as a caption style format above the table. The List of Tables entries should mirror the APA format of table titles within the body of the paper. Consult the APA manual to ensure that all tables and table titles conform to APA format. See APA 6th, Chapter 5 for guidance and examples.]

[Use Word's Table of Figures feature (using caption style = "figure") to create this section. Note that each figure caption needs to be created as a caption style format below the figure. The List of Figures entries should mirror the APA format of figure captions within the body of the paper. Consult the APA manual to ensure that all tables and table titles, figures and figure captions conform to APA format. See APA 6th, Chapter 5 for guidance and examples.]

Small and medium-sized enterprises (SMEs) play a fundamental role in the social and economic development of any country, particularly taking into account their significant share in the gross domestic product (GDP) and employment. The SMEs are required to remain competitive in the present of giant corporates, which implies that their opportunities to thrive are tremendously compromised. According to Fauske et al. (2007), the challenges and needs of SMEs to continue undertaking their business endeavors have not been well-researched. Despite the SMEs experiences such resource constraints as human capital, money, and time, they exhibit a great desire towards pursuing long-term strategic changes towards being sustainable and resilient in the contemporary business world (Wickramasinghe, 2016). Research evidence provided by Fauske, et al. (2007) and Khahan (2016) has suggested that SMEs tend to embrace a long-term view through implementing some of the business planning. According to Aguinis (2013), SMEs are taking advantage of information technology to enhance their efficiency in the supply chain via the use of e-commerce and electronic data interchange. Comment by angela wiedenhoeft: Good opening, it will be a stronger statement if statistics can be cited here. Perhaps data from industry survey or other studies conducted on the same subject.

By leveraging technological advancements, SMEs are presented with an opportunity to become more flexible and innovative in adapting to change despite their smaller size relative to larger enterprises. Previous research conducted by Aguinis (2013) revealed that the size of an SME greatly affects its capability to adopt the necessary management practices. Another study by Aguinis (2013) found that the size of SMEs plays a critical role in the study of management practices for such firms. Based on this information, the present study focuses on investigating the performance management practices of SMEs in the United States, with a specific emphasis on Filtrine Manufacturing. According to Palaiologos et al. (2011), performance management and performance evaluation are fundamental organizational attributes that have received significant attention in both academic and practice. In this regard, the two attributes aim to systematically encourage, promote, improve, and develop operations on the organizational, departmental, and individual levels towards achieving the goals and objectives developed by the executives. Comment by angela wiedenhoeft: I think I understand where you are getting at with the discussion on firm size but when I searched through the DSP, I did not see any explanation of what is considered small vs medium enterprise. Also, there is no comparison analysis of your research company Filtrine Manufacturing to firms in similar industry in terms of size. Meaning, are they considered large, medium or small relative to their competitors?

Many organizations have sought to establish management measures, particularly effective management as well as the development of human resources, which are capable of increasing competitive advantage in the industry. Suárez (2016) asserts that the principles and concepts of performance management, when properly implemented, are capable of allowing for efficient input from the employees. Excellent performance, both in quality and quantity, calls for planning, revision, evaluation, goals, and application. Moreover, connecting the performance with human resources management of an organization is integral in stimulating and motivating the employees while also improving their attitudes, skills, and knowledge, resulting in efficient execution of the assigned tasks. The process yields what is referred to as a “performance management system”, which is largely embraced by successful organizations to realize success in the business endeavors (Fauske e al., 2007). However, Suárez (2016) notes that a significant number of organizations have not successfully realized the expected effectiveness in terms of the adoption of a performance management system.

Because SMEs greatly contribute to the generation of revenue, development of a country, and employment opportunities, governments have been keen to support such firms as a driving factor of the country’s economy. Training programs, developments, capital, and businesses are witnessing significant promotion and encouragement towards increasing the competitiveness of individual companies in their respective industries. Therefore, the development of performance management patterns that are relevant to SMEs is a critical and urgent attribute that will go a long way in giving such businesses a clear direction, particularly in terms of establishing and implementing their growth objectives. As a consequence, SMEs are continuously developing towards the realization of their organizational needs as well as sustainably operate under the ever-dynamic business environment.

Notably, performance management has been a fundamental and positive development in the field of human resource management (Suárez, 2016). Over the last three decades, performance management has achieved a more integrated and continuous approach, particularly in terms of the effective ways of managing and rewarding performance. The implication is that performance management has been an integral element of organizational life. Thus, performance management excels on the premise that’s numerous tools and concepts need to be harnessed and integrated in the entire organizational framework whereby their relationships can be clearly understood (Suárez, 2016). Such harnessing eliminates a situation whereby organizational tools and concepts are allowed to develop across the organization haphazardly. In doing so, it is possible to select the tools and concepts on the basis of their fitness into the overall model whereby they are capable of supporting one another.

Although experiences practitioners as well as research have sought to identify the various traits that are required for effective management systems, a multitude of decisions has to be made for effective designing of a system that is ideally suited for the needs of an individual organization. According to Mankins & Steele (2005), performance management systems are capable of supporting pay decisions, reductions in workforce, employee development, and employee decisions. A performance management system that seeks to realize too many objectives is exposed to the potential risk of failure due to lack of focus and weight. Therefore, there is no set of objectives of a single type of system, which is best suited to meet the demands of all organizations. The implication is that the purpose of a particular performance management system needs to be dependent on the consideration of organizational culture, individual business needs, as well as the integration of the system with other human resource management systems.

A key element to consider is that although performance management aimed at purposes of guiding decision-making and employee management, the two objectives are not usually equally supported by just one system. In this regard, when performance management is utilized in making decisions, the appraisal information is utilized as a basis for such attributes as reductions in force, assignments, transfers, promotions, pay increases, or other administrative actions by the human resource department (Kumar & Nirmala, 2015). In cases whereby the performance management system is used in promoting employee development, the appraisal information is utilized in guiding training, mentoring, job experiences, as well as other developmental endeavors that employees are required to implement towards developing their capabilities. Despite being theoretically possible for an organization to establish a performance management system that is capable of effectively serving both employee development and decision-making purposes, it may be a difficult endeavor to accomplish in practice (Mankins & Steele, 2005). Moreover, a research conducted by Blasini & Leist (2013) revealed that the purpose of decision-making versus employee development influences the ratings observed. For instance, the ratings utilized for decision-making are typically lenient, whereby most workers tend to receive ratings on the high end of the scale. On the other hand, the ratings for development purposes usually exhibit higher variation, which reflects both the employee strengths as well as their development needs.

Statement of the Problem

In addressing the issue of performance management in SMEs, this paper suggests that the use of action research may play a central role in enhancing practical tasks, business strategies, as well as structure hierarchical organizational systems. Diverse business sectors like food, media, pharmaceuticals, and manufacturing may face significant challenges in improving organizational change, supply chain management, human resource management, technology management, and customer service (Ates et al., 2013). The performance management context has witnessed rapid changes in recent days due to the effects of social tools, social media, and emerging technology. Therefore, action research would essential in providing approaches that integrate practice and theory in order to address the issue of performance management among SMEs. In this regard, it will create collaborative learning areas, including the evaluation, enactment, and design of liberating actions via the combination of reflection and action on the present co-generative knowledge cycles.

Purpose of the Study

The purpose of this project is to examine the effectiveness of performance management systems in SMEs. In this regard, the study endeavors to identify whether developing and implementing a performance management system helps in the enhancement of the performance of SMEs while enabling them to embrace new performance management systems that can help in further improving the overall objectives. To realize the primary goal of the research, the study focuses on realizing specific objectives outlined below.

i) Description of the creation and implementation of a performance management system in SMEs.

ii) Analysis of the creation and implementation of performance management systems.

iii) Assessment of the possible areas for further development of SMEs’ performance management systems.

iv) Advising on the key areas that should be considered in developing and implementing performance management system in SMEs.

The conceptual framework for this study is based on a literature review towards identifying the various constructs that significantly explain the performance of SMEs. According to Sengupta et al. (2013), there are five major constructs, which are capable of mediating the tradeoff between a firm’s performance and entrepreneur traits. These include innovative performance, innovative capacity, organizational search, marketing orientation, and entrepreneurial orientation. The conceptual framework is graphically presented in Figure 1. The performance of an SME is largely measured based on both financial as well as nonfinancial performance measures. Suárez (2016) points out that financial performance is comprised of financial efficiency measures like return on equity and return on investment and profit measures like net profit margin and return on sales. On the other hand, nonfinancial measures include market share, employees’ growth, sales growth, and customer satisfaction (Wickramasinghe, 2016). Other nonfinancial measures are considered to be end performance measures, which include share growth and market share, with some serving as a leading indicator of the resultant financial performance. Generally, most SMEs tend to utilize a limited number of financial performance indicators as they do not have the human resources required to establish performance measurement and the desired culture towards collecting substantial data for the purposes of decision-making. Comment by angela wiedenhoeft: I would suggest moving the Figure from page 17 so it is right after the mentioning of the figure so the reader can follow along as you explain the constructs.

For SMEs, entrepreneurs play a fundamental role in the growth and development of the business. Due to the influential and powerful position of the entrepreneur on the firm, the entrepreneur’s subjective worldviews can tremendously affect the choice of strategic directions for the business, which influences the overall performance. The personality traits of the entrepreneurs greatly affect the strategic direction of the business (Palaiologos et al., 2011). Entrepreneur traits have received extensive research in the recent past, with mixed results obtained. For instance, Sengupta et al., (2013) pointed out that some traits significantly and positively influence the performance of an SME. As an important part of the personality of an entrepreneur, traits influence how business activities are conducted. Entrepreneurs tend to select businesses that have a close correlation between the entrepreneur traits and the success requirements. Moreover, Sengupta et al., (2013) argue that entrepreneurs typically manage their firms on the basis of the strengths of their specific traits.

Figure 1: Conceptual Framework

MO

IP

OS

EO

IC

FP

ET

Where:

MO refers to market orientation Comment by angela wiedenhoeft: I like the Figure however, I would suggest defining these as a Note under the Figure and then arrange the definitions in the order of top to bottom and left to right so it is easier for readers to follow. For example. Note: MO = Market Orientation; IC = Innovative Capacity; ET = Entrepreneurial Traits, etc.

IP refers to innovative performance

OS refers to organizational search

EO refers to entrepreneurial orientation

ET refers to entrepreneur traits

FP refers to firm performance, and

IC refers to innovative capacity

Innovative performance, on the other hand, plays a fundamental role in influencing the performance of an organization. Suárez (2016) identifies four major types of innovation in an SME: organizational innovation, marketing innovation, process innovation, and product innovation. The major objective that drivers an SME to innovate is increasing its competitiveness in specific markets while also obtaining improved business performance. Thus, the innovations of a business should be measured on the basis of the impact on the market position or innovative performance (Sengupta et al., 2013). According to White (2008), innovative performance refers to the degree to which a given firm introduces its innovations into the market, particularly in terms of such elements as new devices, new processes, or new product launching. Generally, most SMEs are not merely driven by patentable innovations as their innovations tend to be incremental and experience numerous challenges as they endeavor to innovate.

According to Mankins & Steele (2005), organizational search is a fundamental element in business-to-business marketing streams. Organizational search shows the capacity of an SME towards recognizing the value of new external knowledge, assimilating it, and applying it to commercial ends (Grossoehme, 2014). In this regard, organizational search involves elements such as acquisition, assimilation, exploitation, and transformation. White (2008) points out that firms do not undertake search activities with the mere objective of finding information on given phases and finding novel ideas, which may help create beneficial ideas incorporated into the extant body of knowledge within firms. In this project, organizational search forms an integral part of the performance of SMEs as it involves the various activities undertaken by a firm towards finding skills, tools, technology, information, ideas, and knowledge, which is associated with stronger capabilities and competencies that yield innovations that contribute to higher levels of relative competitiveness in organizations (Grossoehme, 2014). An SME may obtain knowledge through either passive search whereby there is not active search for knowledge and information, or through ongoing or proactive search characterized by active scanning and selection of relevant technology, ideas, and knowledge towards creating competitive innovations.

Innovative capacity is another critical attribute that influences the performance of an SME. According to Mankins & Steele (2005), the innovative capacity of an SME includes the ability of the business to leverage knowledge internally, regardless of the newness of the knowledge, including its capacity to match the results of its innovation with the expectations of the final market in the wake of dynamic market needs (Sengupta et al., 2013). Innovative capacity tends to represent the abilities that underly the innovative performance of an SME, including applying ideas in the forms of marketing systems, management, work organization, processes, and products (Grossoehme, 2014). Compared to larger enterprises, SMEs are largely dependent on individual know-how, particularly that of entrepreneurs as well as key individuals in the firms. In this research, innovative capacity includes the capabilities of SMEs to screen newly acquired knowledge, particularly in terms of the absorption and replacement of some extant accumulated knowledge and combination of the knowledge to new innovations towards enhanced problem-solving.

Entrepreneurial orientation represents an organization's strategic orientation, which helps capture critical entrepreneurial attributed to decision-making (Grossoehme, 2014). Entrepreneurial orientation is composed of such elements as risk-taking, pro-activeness, and innovativeness. Innovative behavior incorporates the tendency of a firm to experiment, establish new ideas, and improve or replace established practices (Bhattacharyya, 2011). Entrepreneurial orientation presents the firm behaviors manifested in fundamental processes regarding how a business undertakes its endeavors. According to White (2008), an organization with a high entrepreneurial tends to exhibit innovative behavior based on proactivity in terms of the willingness to engage in risky projects. On the other hand, an organization having a lower entrepreneurial orientation tends to be quite cautious about innovating in a more reactive manner and unwilling to embrace risky projects. The bottom line is that entrepreneurial orientation plays a fundamental role in dictating the competitive position of an SME.

Market orientation also influences the performance of an SME. According to Mankins & Steele (2005), market orientation forms an integral part of organizational culture, which dictates the success of a business through emphasizing responsiveness, inter-functional coordination, competitor orientation, and customer orientation. Market orientation tends to reflect the level to which a business can satisfy the customer wants and needs as an organizing principle. Research evidence has revealed that market orientation helps strengthen SMEs' performance (Bhattacharyya, 2011). Smaller firms tend to portray diverse patterns relative to larger firms in terms of the establishment of their market orientation by keeping abreast with competitor actions and customers, including the dynamism experiences in their environment and technology (Bhattacharyya, 2011). Therefore, SMEs tend to behave in a more reactive market orientation mode with a lower orientation on the future needs of their consumers.

Formulating research questions forms an integral part of any research. According to White (2008), research questions play a key role in exploring the existing uncertainty in an area of study and helps in pointing to a need for deliberate investigation. Therefore, research questions facilitate the examination of the existence of causality, comparative, relationship, composition, classification and description, and phenomenon. In order to realize the research objectives, this study will be guided by the following research questions.

· What are the possible areas for further development of SMEs’ performance management systems?

· What are the key areas that should be considered in developing and implementing performance management systems in SMEs?

Nature of the Study Comment by angela wiedenhoeft: You may want to download the latest version (v4) of the template as this section has been modified. The new heading is “Method and Design Overview”.

Based on the research methodology utilized for the research, it may be argued that the method will be effective in exploring the views and perspectives of the participants involved in the study. The respondents will offer critical insights towards the analysis of the topic under investigation. Although it may be challenging to conduct the interviews with every respondent due to the repetitiveness attribute in the structured interview questions and the amount of time involved, the entire process is considerably worthwhile due to the implications of the research findings to the organization. With the contacted research participants portraying significant generosity in terms of providing the desired feedback for the study, the data obtained will be both knowledgeable and insightful, particularly with respect to performance management system in Filtrine Manufacturing. One of the key conclusions obtained is that organizational leaders play a fundamental role in the long-term development and implementation of performance management systems in SMEs. The managers who will form an integral part of the research respondents will utilize the study's findings to ensure improved performance of their teams, which contributes to the overall productivity and profitability of the organization.

From the information obtained from the respondents, a key conclusion would relate to some of the key areas that should be considered in developing and implementing performance management systems in SMEs, particularly reflecting on the situation at Filtrine Manufacturing. Examples of the key areas are setting and revising goals, development planning, and coaching and managing employees. The conclusions made on these key areas will be largely be utilized by employees. Setting and revising goals relate to whether employees clearly understand the expectations of their work. The idea is that all employees need to know their responsibilities as well as their contributions to the success of the organization. The respondents (managers) have a role to play in the goal-setting and revising among the employees. In terms of development planning, workers require quality and regular feedback regarding their performance as well as details on areas of improvement. Identifying skill gaps is essential in ensuring that employees clearly understand the skills required for their enhanced performance and career progression.

Significance of the Study

Based on the research methodology utilized for the research, it may be argued that the method will be effective in terms of the exploration of the views and perspectives of the participants involved in the study. The respondents will offer critical insights towards the analysis of the topic under investigation. Although it may be challenging to conduct the interviews with every respondent as a result of the repetitiveness attribute in the structured interview questions as well as the amount of time involved, the entire process considerably worthwhile due to the implications of the research findings to the organization. With the contacted research participants portraying significant generosity in terms of providing the desired feedback for the study, the data obtained will be both knowledgeable and insightful, particularly with respect to performance management system in Filtrine Manufacturing. One of the key conclusions obtained is that organizational leaders play a fundamental role in the long-term development and implementation of performance management systems in SMEs. The managers who will form an integral part of the research respondents will utilize the findings of the study in ensuring improved performance of their teams, which contributes to the overall productivity and profitability of the organization.

From the information obtained from the respondents, a key conclusion would relate to some of the key areas that should be considered in developing and implementing performance management system in SMEs, particularly reflecting on the situation at Filtrine Manufacturing. Examples of the key areas are setting and revising goals, development planning, and coaching and management of employees, among others. The conclusions made on these key areas will be largely be utilized by employees. Setting and revising goals relates to whether employees clearly understand the expectations of their work. The idea is that all employees need to know their responsibilities as well as their contributions to the success of the organization. The respondents (managers) have a role to play in the goal setting and revising among the employees. In terms of development planning, workers require quality and regular feedback regarding their performance as well as details on areas of improvement. Identifying skill gaps is essential in ensuring that employees clearly understand the skills required for their enhanced performance and career progression.

Definition of Key Terms

Small and medium-sized enterprises (SMEs) – These are businesses with assets, revenues, or the number of employees that do not exceed a specific level (Bhattacharyya, 2011).

Performance management system – this is a mechanism utilized in tracking the performance of employees consistently and measurably, which allows an organization to ensure that all departments and individual employees across the organization work effectively towards the realization of the business’ strategic goals (Kumar & Nirmala, 2015).

Summary

There are three major deliverables associated with the project. These include identifying the objectives of the performance management system at Filtrine, examining staff development and learning, and communication strategy and policy in the company. The primary objective of the performance management system at Filtrine is improved business results. It gives the company an increased clarity and formal structure regarding role expectations (White, 2008). All the research participants agree with the above promises, but two of them add that the performance management system leads to enhanced profitability and competitiveness in the company. Reflecting on the deliverable relating to staff development and learning, the participants believe that the company is an employer of choice, particularly with respect to support and opportunities given to the workers by the performance management system. To a greater extent, the employees remain committed to working for the company in the foreseeable future. The communications mechanisms and policy mechanisms at Filtrine are aimed at keeping all employees regularly informed and supported through an inclusive and open culture. Through the underlying performance management system, the company remains greatly committed towards communicating systematically and broadly by ensuring that any communication is directed, honest, and open across the organization (Wickramasinghe, 2016). All three deliverables will be to the company’s management for effective implementation of a performance management system that is capable of enhancing the company’s productivity and profitability. Comment by angela wiedenhoeft: I am a little confused with this comment. Do you mean two of the research participants had provided you feedback?

This section presents the literature review chapter of the DSP project, which majorly focuses on the performance management of Small and Medium-Sized Enterprises (SMEs). This includes defining performance management, its historical context, conceptual framework, criticisms and purpose, and the various models applicable to SMEs. The literature review also articulates the main concepts of performance management and performance management issues. Because the study largely focuses on SMEs' performance management systems, the literature review would emphasize SMEs' contextualization, including the significance of the performance management systems in such organizations.

This literature review embraces a systematic review approach, which involves a systematic search for existing studies on the research topic. Thus, numerous texts were identified on the basis of their accessibility in online platforms and databases. Through the analysis of the selected studies, it was possible to populate an evidence base of the studies contributing to the underlying search practice on the research topic, particularly with respect to performance management in SMEs. As a way of revealing the implicit literature searching process within every study used for the literature review, the relevant chapters or sections on the search for literature were read and re-read, which helped in determining the key methodological stages for which individual studies are reported, and collectively contribute to a complete literature search.

Performance is defined as a process that is associated with numerous behaviors aimed at realizing some predetermined goal. Performance can also be defined as an outcome of work, which relates to an organization's economic contributions, customer satisfaction, and strategic goals. On the other hand, performance management is defined by Khahan (2016) as a systematic approach that seeks to improve individual as well as team performance towards the realization of goals. Vilarinho, Lopes & Sousa (2018) pointed out that the term performance management was integrated into the human resources field during the 1990s, whereby organizations began to portray greater concern in employee performance's holistic management. Thus, performance management is considered a natural management process, which effectively manages teams and individuals towards the realization of higher organizational performance levels.

Råheim et al. (2016) implied that performance management is a systematic approach that seeks to improve both team and individual performance to achieve organizational goals. Thus, it may be argued that performance management seeks to direct and support employees towards working as efficiently and effectively as possible based on the organizational needs. Råheim et al. (2016) argue that performance management practices have witnessed a dramatic growth in recent years, and organizations face immense pressure to achieve improvements in performance and maximize the contribution of all employees.

Bourne et al. (2013) argued that performance management is a process that focuses on the development, development, and incorporation of engagement of all parties as well as two-way communication between processes towards creating understanding and eliminating problems. In this regard, it may be argued that performance management is a strategy that is aimed at passing on a sustainable success of an organization through the improvement of both individual and group capabilities towards the realization of various organizational objectives. Aguinis (2013) defined performance management as a series of endeavors undertaken by an organization, which seek to largely focus on organizational structure, compensation design, budget, and strategy as a means motivating employees towards accomplishing the objectives and goals of an organization. Notably, together with feedback and input, performance management plays a critical role in ensuring that an organization can effectively plan and coordinate within the designated timeframe. According to Aguinis (2013), performance management shows an organization's capacity to systematize the operations of teams and individuals for cascading and aligning with the underlying business strategies and objectives. The effectiveness of performance management is based on such attributes as feedback, assessment, performance development, performance execution, as well as performance agreement and planning. It may be argued that performance management is perceived as a tool that aims to realize success in the work of organizations, teams, and individuals via a systematic planning process, standards, goals, and employee code of conduct (Bourne et al., 2013). Performance management is integral in creating a mutual vision towards driving an organization to realize success while also providing a guideline for human resource development and management for both short-term and long-term achievements. Brown, Hyatt & Benson (2010) argue that performance management involves a continuous process of performance development, evaluation, and determination of teams and individuals. This process is developed to be consistent with the objectives and strategies of an organization because individual's performance is considered a critical element of an organization's success.

Historical Context

This section will provide a brief history of performance management, when it was first mentioned, and how the term has evolved over time. The section will particularly provide important insights into how organizations have utilized performance management over the years, including its building blocks, rationale, and implications to organizations. By examining the history of performance management, the idea is to enhance human nature and the significance of managing performance towards aligning individual goals to a common vision that spearheads organizational success.

The performance management concept is an essential and positive development, particularly in human resource management (Khahan, 2016). In the 1980s, performance management became a more integrated and continuous approach in the management and rewarding performance (Blanchard, 2018). According to Vilarinho, Lopes & Sousa (2018), performance management has been an integral part of today's organizational life. Historically, ancient Egyptians embraced a strategy of encouraging workers to build great pyramids whereby they unwittingly and unconsciously used performance management systems to complete such overarching tasks effectively. Over time, the understanding of human nature and the environment of existence has witnessed a significant change. Consequently, organizations have recognized the importance of managing performance in such a way that it aligns with the employees' goals to a common vision of an organization, which leads to organizational success.

In describing performance management, Khahan (2016) argues that as opposed to letting numerous tools and concepts develop across the organization haphazardly, there is a need to harness them while also putting them into an overall framework whereby the underlying interrelationships are clearly understood. As a result, the tools and concepts may be selected on the basis of their fitness into the general model and the design geared towards supporting one another. The performance management systems in organizations have been increasingly complex, especially considering numerous indicators that emphasize an organization's long-term sustainability (White, 2008). Vilarinho, Lopes & Sousa (2018) stated that since the 1990s, there had been a significant rise in the research of both a practical and an academic nature regarding the fields of organizational performance management and performance measurement of both organizations and individuals.

Diverse reasons can be used in explaining the current performance trend. With societal changes, the success of an organization calls for the development of a measurement system. To ensure that the outcomes of the performance measures are well-managed and enhanced, performance management becomes an integral part of any organizational life. The numerous changes related to performance management have forced organizations and individuals to learn the significance of people's role in contributing to the success of an organization (Expósito & Sanchis-Llopis, 2019). According to White (2008), the mindset shift to an individualized corporation from organization man has been instrumental in creating a situation whereby people become the most important asset of an organization. In today's knowledge economy, performance management is a critical system that helps in enhancing the success of an organization, especially in terms of acquisition and retention of the right talent, developing and training the employees towards the effective realization of both individual and full organizational potential, as well as a system to evaluate and reward individuals in a company.

In today's world, performance management systems have witnessed a significant level of redefinition whereby they are largely established on the basis of creative and dynamic employees that the requirements and desires of an organization are unable to fit in a one-size-fits-all model. Blanchard (2018) has pointed out that today's world is complex, especially considering attributes such as uncertainty and randomness in terms of how small events are capable of having diverse and far-reaching implications. It is possible to realize a synergistic solution from discussions with many people with diverse perspectives regarding how collaboration and teamwork may be utilized in increasing the efficiency and productivity in organizations. Recent years have seen a movement towards a management approach, which is aimed at encouraging a sense of purpose whereby people and different processes partner towards empowering and enabling individuals to realize competitive and creative results. White (2008) emphasizes the need to create an organization whereby members can be identified with, show a willingness to commit, and share a sense of pride.

The 18th century is characterized by Industrial Revolution, which tremendously impacted humans and their livelihoods (Aguinis, Gottfredson & Joo, 2012). Since then, there have been numerous attempts aimed at improving the efficiency of production among employees, receiving significant attention from both practitioners and scholars. According to Brudan (2010), the ultimate objective of performance management is to increase the efficiency of individuals working in a given department in an organization by raising the awareness of extrinsic and intrinsic factors affecting the performance of an individual. As a result, there is a significant shift in the key perspectives of performance management, which tend to emphasize the evaluation of the overall performance, including the output, process, and input. Moreover, performance management is associated with an organization-wide integration of diverse fields such as control, accounting, marketing, information system, organizational culture, human resource management, operation management, as well as strategic management (Aguinis, Gottfredson & Joo, 2012).

The element of scientific performance management is based on the reward system for the employees whereby each one of them is precisely evaluated against specific standard criteria developed by an organization (Na-nan, Chaiprasit & Pukkeeree, 2018). Human labor is considered to be a fundamental factor of production, which is capable of being scientifically managed towards increasing organizational productivity. In the past, the primary objective of performance management was to retroactively evaluate an employee's output for purposes of improving individual performance (Chaola, Pratoom & Raksong, 2015). As a result, human-relationship-based management would be developed to largely focus on the work environment, collective norms, and behaviors of individual employees (de Waal, 2007). Therefore, to a greater extent, performance evaluation was largely emphasized on group performance before compensation or rewards were linked to be received by the group, which implied that all employees were fully committed and devoted to fulfilling the group's objectives.

In the 1950s, the concept of management by objectives was developed, which referred to a joint consideration between employers and executives towards determining the objectives related to operations and work-related behaviors required by employees (Brudan, 2010). Consequently, the decision support system was embraced in performance management to store, summarize, and analyze information utilized in the decision-making process in organizations. In the 1980s, many organizations started using information systems for administration purposes in a more systematic and widespread manner (Na-nan, Chaiprasit & Pukkeeree, 2018). However, it was not until the 1990s that the integration of business information was executed into business intelligence systems and computer systems, which accompanied various decisions related to performance management (Brudan, 2010). This has resulted in new management concepts such as cooperate performance management (CPM), reporting, planning, advanced management integrating technology, and customer relationship management (CRM), which have been continuously proposed in many organizations regardless of their size. These developments can be considered to make the foundation of organizational strategic planning. According to de Waal (2007), performance management in an organization includes the systems, indicators, methods, and processes required in the organization's performance management, which focuses on the integration between automatic information cooperation, processing, as well as important data analysis. According to Chaola, Pratoom & Raksong (2015), some of the fundamental steps utilized in the process of performance management in an organization include business intelligence, merger, prediction, funding, strategy distribution, as well as strategic planning.

Balance Scorecard has been a key element in the management of performance management in organizations. It is focused on four major attributes, which include internal operations, customer, finance, and personal growth and learning (Fernández‐Mesa et al., 2013). Many organizations have tremendously embraced the balanced scorecard because it tends to cover diverse organizational operations, notwithstanding its capacity to effectively show the success of an organization in terms of productivity. Business Model Canvas is currently a common method used by many organizations to address more details and more dimensions (Fernández‐Mesa et al., 2013). This model takes into consideration the capital structure, major allies, principal activities, principal resources, revenue channels, customer relations, distribution channels, distinctive features or value of services and products, and target groups of an organization (Fernández‐Mesa et al., 2013). More importantly, the model indicates the various concepts that play a fundamental role in ensuring that entrepreneurs or executives can clearly visualize the business practice of an organization while also enabling the organization to plan out various operations required for business growth effectively.

Understanding Small and Medium-Sized Enterprises

SMEs include businesses with assets, revenues, or the number of employees that do not exceed a specific level. The criterion utilized to determine an SME tends to vary from one country or industry to another. Defining an SME is critical in differentiating SMEs from large corporations. In the context of the US, Small Business Administration (SBA) is tasked with establishing the standards for SMEs, which help determine the upper limits for the eligibility of a business for targeted funding and desirable government contracts (Grossoehme, 2014). Based on the industry, the limits may be tied to the number of employees or revenue. SMEs include businesses maintaining a number of employees, assets, or revenues that do not exceed a given threshold (White, 2008). Different countries have different attributes used in defining what constitutes an SME. The notion is that a given size criterion needs to be met, with the industry in which an organization operates being an integral element of consideration. Although SMEs are usually small, they are instrumental in any country's economic growth (Mankins & Steele, 2005). To a greater extent, SMEs tend to outnumber larger organizations and corporations and offer many employment opportunities to individuals, which implies that they help shape innovation in diverse ways.  

 In the United States, no specific definition may be utilized in differentiating an SME from a large firm or corporation. This is unlike the European Union (EU), which provides a clear definition and characterization of an SME. The EU defines an SME as an organization having at most 250 employees. In the United States, the Small Business Administration (SBA) is capable of classifying small businesses in accordance with the industry, earnings, number of employees, and ownership structure. For example, SBA points out that, in the manufacturing industry, an SME is an organization having employees that do not exceed 500 (White, 2008). Conversely, businesses engaging in mining nickel ore or copper ore may have as many as 1500 employees, and this does not disqualify them from being SMEs (Grossoehme, 2014). It is difficult to categorize organizations into SMEs in terms of Internal Revenue Service (IRS) and tax reporting. Thus, small businesses are classified by the IRS as organizations that have an asset base not exceeding $10 million and large enterprises as those with assets exceeding $10 million (Mankins & Steele, 2005). Generally, SMEs play a fundamental role in the growth of any economy.

Purpose of Performance Management

Performance management aims at improving the performance of individual employees as well as the entire organization. It helps individuals in realizing their full potential, which is beneficial to their endeavors and those of the organization. Although performance management may be perceived to focus more on under-performers, it provides a framework through which individuals' performance is improved while also ensuring that they better utilize their abilities. Different sources selected for use in this research have provided information regarding the purpose of performance management.

White (2008) argues that recent years have witnessed a dramatic increase in the evidence regarding the close relationship between human capital and organizational success, emphasizing that organizations are responsible for tapping into the invaluable asset. Performance management may be perceived to encompass diverse attributes of human resource management, which are aimed at improving the effectiveness and efficiency of both organizations and individuals. Mankins & Steele (2005) argued that performance management involves diverse elements that focus on the improvement of an organization's overall performance. Performance management systems play an integral role in the provision of the foundation for the management of expectations of both employees and the organization (Blanchard, 2018). Moreover, the systems are aimed at providing a framework that enhances the integration of individual and corporate objectives, which includes the integration and communication of the core values of an organization (Khahan, 2016). It may be argued that performance management systems help in motivating individuals towards clearly communicated and established expectations, including the provision of an organization's developmental process through the establishment of guidelines that help in the development of future outcomes and needs in the organization.

Fauske, Busi & Alfnes (2007) argue that typically, a performance management system includes such practices as establishing performance objectives, measuring performance relative to the set objectives, identifying developmental support, as well as reviewing the process related to the development of performance and subsequent goals and objectives. Thus, the performance management system may be perceived as a strategy to measure the performance of an individual, a team, and the entire organization through different performance management techniques.

Performance management is considered to be an exchange process, which is based on the communication between employees and executives. Generally, performance management is aimed at handling information on work-related behaviors, which may be reflected back to the employees and utilized when considering such attributes as successor planning, training and development, promotion, and compensation, among others. According to Prihatini, Utami & Priyono (2019), the primary objective of performance management is linking individual performance to organizational goals through performance indicators, initiatives, performance objectives, strategic objective setting, and strategic performance management processes. The existing literature has identified the objectives of performance management. For instance, Adler (2011) asserted that the objective of performance management involves transforming policy into practice as a way of realizing the desired goals, particularly focusing on the performance of individual employees from the input to output. The organization needs to portray the capacity to utilize performance management as a tool for continuous improvement of performance, which helps in ensuring that employees are capable of completing all the tasks assigned to them. Moreover, performance management focuses on inducing coordination as well as the exchange of understanding between employees and executives, including among employees and among executives. Employees are required to learn and improve themselves as a way of continuously producing the desirable work.

Sengupta, Venkatesh & Sinha (2013) divided the objectives of performance management into six major categories: strategic objective, administrative objective, communication objective, developmental objective, organizational maintenance objective, and document objective. Strategic objectives may be understood as the connection between individual goals and organizational goals, which is associated with the employee behaviors that are congruent with the success of the objectives of an organization. Administrative objectives, on the other hand, define the source of accurate information, which plays a fundamental role in making information administrative decisions related to such elements as job rotation, promotion, wage adjustment, rightful termination, identification of substandard performance, reward or acknowledgment for outstanding employees, and career development, among others (Sengupta, Venkatesh & Sinha, 2013). Communication objectives refer to the notification to or communication with the employees, particularly with respect to their behaviors within their responsibility areas, which is required to improve information and enhance the learning regarding the expectations of the executives and the organization, including the various perspectives that are considered to be crucial by the management towards the realization of organizational success.

Developmental objective refers to the emphasis towards equipping employees with skills, capabilities, knowledge, and positive attitudes towards their work, including the feedback and suggestions for improvement by the leaders. Identifying the weaknesses and strengths of the employees is important in ensuring that they properly handle themselves while also increasing their chances of improving towards success (Sengupta, Venkatesh & Sinha, 2013). The organizational maintenance objectives focus on the application of information obtained from performance management – including assignments from past to present, areas of responsibility, skills, and knowledge of employees – in the planning of the workforce as well as appropriate training in the future, including compensation management, incentives, and evaluation system design towards promoting successful and efficient organizational operations. On the other hand, document objective asserts that information obtained from performance management plays a fundamental role in providing a reliable and accurate source, especially when choosing the tools towards improving administrative efficiency and when making key administrative decisions regarding the competitive advantage and overall organizational operations. Generally, the ultimate performance management objective is creating a culture of highly efficient performance on both teams and individual levels towards inducing responsibility as well as realizing continuous improvement (Sengupta, Venkatesh & Sinha, 2013). Therefore, the operations of an organization may be executed on a greater competitive advantage and higher potential. Another key objective of performance management is equipping employees with adequate and sufficient attitudes, skills, and knowledge.

Performance Management Framework

Generally, the performance management process is not different from the quality management process developed by William Deming, which implies that it is composed of four major steps: planning, doing, checking, and acting. Planning focuses on making decisions regarding what needs to be done and how it is done, doing focuses on the implementation of the plan on the basis of decisions that have already been made, checking emphasizes a rigorous check on whether the work has been executed or implemented based on the underlying plan, and acting involves a review of the proposed solutions in the checking step as a way of devising a strategy regarding successful implementation of the plan and the necessary ways that can be embraced to improve its efficiency (Khan, 2010). Figure 1 below provides a comparison of the performance management process and Deming's cycle.

Figure 1: Comparison of Performance Management Process and Deming's cycle.

A study conducted by Smither & London (2009) revealed that performance management includes such steps as performance planning, performance implementation, performance evaluation, performance review, and performance application (El-Shobery, El-Iskandrani & Hegazy, 2010). Compared to Deming's quality management process, the first step in the process of performance management relates to the Deming model's planning phase, while the second and third steps may be perceived as similar to Deming's "doing" concept. The review of performance can also be compared to Deming's checking step, with the fifth step resembling the "acting" process by Deming. Each of the steps is described below.

Step I: Performance Planning

During the step of performance planning, the executives and other stakeholders involved are required to portray a good understanding of the organization's goals, strategies, missions, visions, and management processes, including the underlying evaluations, distinctive characteristics, main activities, responsibility domains, as well as the potentials of the employees and the entire organization (Cardoni et al., 2020). Obtaining such insights can be done using numerous data collection and analytical methods such as group discussions, inquiries, interviews, or analyses of the completed task. As a result, the organization is presented with an opportunity to obtain the information, which may reflect the real needs as well as be utilized in transforming the work environment (Suárez, 2016). Moreover, the executives and all other parties involved are required to clearly understand the future goals and directions of the organization (Kumar & Nirmala, 2015). The performance planning step is associated with identifying the strengths and weaknesses of the organization as a way of boosting organizational efficiency by establishing the attitudes, skills, potentials, and knowledge that employees must process for the performance management system. Zheng, Zhang & Li (2012) suggest that during this step, executives and employees may engage in discussions and find an agreement on major issues such as development plans, behaviors, and results.

Results present a critical factor, which plays a fundamental role in determining the task to be undertaken by every employee to ensure that the organization realizes its goals. The effective envisioning of anticipated outcomes needs to consider key domains or accountabilities of responsibilities expected or assigned by the organization (Ryan, Spencer & Bernhard, 2012). Consequently, the decisions on the key accountabilities of every sector need to offer clear objectives regarding the tasks that have to be fulfilled by every employee as a clear job distribution will go a long way in ensuring that a genuine performance evaluation is realized. More importantly, there is a need to define the performance standards for every responsibility, which has to be centered on percentage, ratio, time, and quantitative data. The presence of such information is instrumental in serving as criteria towards assessing whether or not the performance of employees is able to satisfy the expectations of the organization.

Behaviors play a fundamental role in providing an incentive or indicator that helps in ensuring that employees are capable of producing the expected or desired results by the organization (Palaiologos, Papazekos & Panayotopoulou, 2011). Through ensuring the demonstration of employees' behaviors deemed by executives to be instrumental to the success of assigned tasks, the concept of the behavior plays a critical role in determining the kind of behaviors that employees should exhibit, which helps them unlock their potential towards undertaking tasks that are complex, pressing, and difficult (Palaiologos, Papazekos & Panayotopoulou, 2011). Therefore, behavioral assessments need to be undertaken while taking into consideration the employees' attitudes, skills, and knowledge, which are integral towards the completion of tasks in accordance with the organization's expectations.

According to Kumar & Nirmala (2015), a development plan includes a plan that the employees and executives agree upon with respect to developing skills and knowledge required in the delivery of desired results. Generally, behaviors and results form part of the plan, which should explicate the strengths and areas whereby employees are required to make desired improvements. Moreover, a development plan typically involves strategies aimed at overcoming weaknesses as well as the ways utilized in turning weaknesses into strengths in the future.

A study conducted by Striteska (2012) helped in developing a framework on SMEs' strategic development with focus groups and successful operators. The information obtained from the research would later be transformed into a practical shape. The study's preliminary findings showed that formulating comprehensive plans that cover both the needs of operators and the quantitative data requiring evaluative performance indicators is very important for organizational success (Striteska, 2012). In addition, the plans should be formulated, and the behaviors that are capable of meeting the organization's expectations appropriately determined. The findings of the study were applicable in the management of numerous SMEs, with the three steps above helping in heightening the efficiency of the management of SMEs. According to Van Helden & Reichard (2013), human resources development plans are necessary for SMEs because they help in strengthening the bond as well as gearing the organization towards motivation, resilience, constant self-improvement, commitment, and creativity as a way of ensuring that all tasks are undertaken to the fullest of the employee's ability.

Step 2: Execution

The execution step emphasizes the designation and assignment of responsibilities and promotion of participation from employees towards the realization of set goals. This may be realized through the use of two-way communications, providing feedback, monitoring employees' behaviors, allocating necessary resources, and encouraging, supporting, and motivating the employees towards completing the tasks involved in their job descriptions and meeting the desired performance standards. As a way of completing this task, all parties involved are required to understand the underlying objectives, strategies, missions clearly, and expected results of the organization (Hui & Qin-xuan, 2009). According to Kuvaas (2011), effectively analyzing the execution step helps in the identification of factors that lead to successful execution. These factors include: the use of skills or expertise of executives towards influencing employees and maximizing their potentials; developing a clear process that is capable of giving a detailed explanation to those involved about the methods and steps in the implementation plan; developing a corporate strategy based on clear performance indicators and organization's main goals; providing a reliable and accurate information towards ensuring that all parties involved in the execution are able to learn the results and facilitate the usage of the information towards solving issues in a timely manner; offering supervisor supports that involve the promotion and motivation of employees towards reaching their full potentials and provide good and valuable advice to employees to complete their tasks; and creating an incentive system that directly influences the employees' performance, which motivates them to work as well as satisfy the performance indicators requirements as outlined by the organization. According to Kuvaas (2011), many SMEs in the United States face challenges arising from a lack of adequate understanding of managerial practices and collaboration among the employees, which makes it difficult for them to realize their set goals and objectives. Consequently, the promotion of participation among employees and ensuring that they have a clear understanding of the management process and the organization's expectations are integral for effective implementation of the plan (Hui & Qin-xuan, 2009). Moreover, there is a need to promote a consistent tracking and monitoring of the various tasks of an organization for improved success.

Step 3: Performance Evaluation

The performance evaluation step emphasizes the assessment as well as evaluation of an individual or object on the basis of criteria or standards defined during a given period. The evaluation needs to be centered on the behaviors and performance of employees with respect to the goals set by the organization. According to Aguinis, Joo & Gottfredson (2012), the evaluation may be undertaken using different forms of evaluative methods as well as sources that relate to the organization like clients, subordinates, colleagues, and other parties involved (Das, Kumar & Kumar, 2011). As a result, the organization is presented with an opportunity to determine whether its employees are capable of meeting the organization's expectations. The performance evaluation step needs to be followed by a summary that informs all the stakeholders about the findings of the evaluation, including the fact that the evaluation itself should be conducted in a fair and transparent manner to all employees (Das, Kumar & Kumar, 2011). Performance evaluation is regarded as a fundamental step for both performance management and human resources management in an organization because, in itself, evaluation is a fundamental input or core component of the various endeavors within human resources management. Moreover, performance evaluation may be utilized as a determinant of diverse employees' behaviors.

The findings of performance evaluation may be used for layoffs, pay rises, workshops, or even the termination of the employee contracts, all of which are direct effects of performance evaluation (Bhattacharyya, 2011). In addition, compliance management and remuneration may also be attributed to the performance levels of those who are evaluated. The results of the evaluation may also be provided as feedback for employees while also serving as a tool to enhance the potential of the human resources of an organization. Generally, all the stakeholders involved need to attack greater significance to performance evaluation in accordance with the findings of numerous studies suggesting that providing feedback plays a fundamental role in improving the efficiency of operations, creating job satisfaction, motivating staff and strengthening bonds among employees (Bhattacharyya, 2011). In the United States, employee performance evaluation is typically undertaken annually through such evaluative methods like panel assessment, management assessment, and self-assessment.

Step 4: Performance Review

The performance review step involves a meeting between employees and executives to review the performance results or conduct a joint discussion. In this regard, the executives are required to prepare reliable and accurate information on the performance of employees while also exercising caution in the discussion of the results of their behaviors and performance that the executives consider being lacking or exceed the standards. Moreover, the executives are responsible for ensuring the understanding of all notified information (Blasini & Leist, 2013). Thus, providing workshops or enrichment activities plays a fundamental role in developing a better understanding of the skills and tasks required in acquiring essential data and providing constructive feedback, which helps improve the operations of an organization and create satisfaction among employees. In the context of the United States, performance reviews in organizations are typically undertaken in both informal and formal settings based on the structure and size of every enterprise. Thus, the performance review is of great importance. Organizations are required to notify the findings of performance as well as evaluation of employee behaviors separately. The frequency of the review may vary based on the environment or changing situations. Generally, a good review plays a critical role in contributing to effective development plans.

Step 5: Application

This is the last step in performance management that helps identify the various elements of performance results. The information obtained from this step is utilized in analyzing and making vital decisions in subsequent performance management (Ladzani, Smith & Pretorius, 2010). Applications may be classified on the basis of the usage in two ways: system and organization. The two are concerned with the strategies utilized in improving and paving the way for future operations on the basis of previous performance results (Kumar & Nirmala, 2015). In addition, the results could be utilized in organizational readjustments under the dynamic work environment and may lead to the elevation of the organizational competencies. In terms of human resources, the application of results may include improving an individual as a way of challenging every employee and enhancing communications between employees and executives or among the employees themselves. The results can also play a fundamental role in boosting leadership skills required in specific projects and motivating employees both individually and collectively. In addition, the results may also be utilized in raising awareness among employees with excellent performance as well as serving as an instrument towards developing and training employees whose performance fails to meet the set organizational standards while also helping in furthering or enhancing the performance of those who have already been able to fulfill the requirements and expectations of an organization. Generally, the primary objective of applications is to leverage the knowledge to human resource management in such areas as loyalty building, career developments, management of competent employees, workshops and training, formulation of various forms of remunerations, motivation, and as remuneration management, among others. Figure 2 provides a summary of the performance management process.

Figure 2: Performance Management Process

Performance Management System

Performance management refers to a continuous communication process between employees and supervisors, which is aimed at supporting the accomplishment of an organization's strategic objectives. This form of communication may include such attributes as reviewing results, providing feedback, identifying goals, setting objectives, as well as clarifying expectations. The performance management system is understood as a continuous methodological process whereby the human resources department endeavors to advance the effectiveness of the organization by the achievement of the stated organizational objectives, mission, and vision through personnel participation (Grossoehme, 2014).

The primary rationale behind the establishment of a performance management system in an organization is that employees tend to perform exemplary well when they are aware of their expectations, including having contributions in developing the expectations. Individuals tend to exhibit better performance and realization of expectations that have been set on the basis of their capability levels within an organizational structure that is supportive (Mankins & Steele, 2005). An effective management system is capable of providing a communication channel that motivates the employees and improves their realization of objectives by leveraging reward-based systems. When they are implemented in a fair and well-designed manner, the systems may be tremendous enablers and empowerers, which differentiate between an excellent organization from an average one (Pettinger, 2002). A performance management system's success greatly depends on the effectiveness of using people as the most important asset of an organization.

Performance management systems benefit organizations in diverse ways. According to Expósito & Sanchis-Llopis (2019), performance management systems help in improving organizational profit margin. In this regard, a performance management system enhances business performance by reducing employee turnover, which helps boost the organizational profit margin and generation of desirable business outcomes. It also guides individuals along the appropriate career path. It subscribes to the global best practices whereby organizational management can guide the employees along a progressive and clearly defined career path (Pettinger, 2002). In organizations with an effective performance management system, the employees are furnished with valuable progressive feedback. This is evidenced when the performance management system calls for real-time feedback, which enhances the proactivity and engagement of employees. More importantly, a performance management system helps in enhancing the pursuit of specific, measurable, attainable, relevant, and time-bound (SMART) goals by employees (Expósito & Sanchis-Llopis, 2019). In this regard, employees can attain and surpass the goals set for them when they clearly know what is expected of them. Such goals need to be set regularly on a short-term based and often discussed to enhance their effectiveness.

Implementation of Performance Management System

In today's world, a performance management system plays a fundamental role in improving individual teams' productivity in an organization. Proper implementation of the performance management system is key for successful organizations, which may be done in the following ways: clarification of expectations – a clear statement of the specific attitudes and output expected from staff; observation and assistance of performance – attentive watching of the pursuit of the performance management plan and appropriate intervention when and where necessary as a way of ensuring compliance; evaluation of performance – assessment of behavior and/or outcomes in the task execution process; interaction and positive review – involves discussion of performance, sharing of observations, and request for feedback from staff as well as joint innovation regarding areas of improvement in the future (Poister (2008).

Pešalj, Pavlov & Micheli (2018) assert that any performance management system's primary objective is improving both employee and organizational performance. In this regard, high-performance delivery plays a fundamental role in ensuring that workers realize their full potential, which benefits individual workers as well as the organization. Effective performance management is associated with improving individuals' performance and making better use of their capabilities (White, 2008). According to Grossoehme (2014), there is growing research evidence that asserts that organizational success is closely related to human capital, which implies that organizations should ensure that they tap into human capital's invaluable asset by all means. White (2008) and Prihatini, Utami & Priyono (2019) agree that performance management includes the various attributes of human resource management, which aim to improve the effectiveness and efficiency of both individual employees and the organization as a whole. In his study Suárez (2016) pointed out that performance management systems offer the foundation for the management of both employee and organizational expectations. Additionally, it seeks focuses on providing a framework that ensures that individual and corporate objectives are perfectly integrated (Suárez, 2016). Prihatini, Utami & Priyono (2019) argue that performance management in organizations is associated with the setting of performance objectives, measuring the performance based on the objectives, identifying the developmental support, as well as reviewing the process towards developing subsequent objectives and performance. Thus, it may be argued that a performance management system provides an organization's performance measurement through diverse techniques.

In today's world, the performance management system plays a fundamental role in improving individual teams' productivity in an organization. Proper implementation of the performance management system is essential for successful organizations, which may be done in the following ways. For instance, it helps in the clarification of expectations, which includes a clear statement of the specific attitudes and output expected from staff.  The performance management system also enhances the observation and assistance of performance. Pettinger (2002) argues that attentive watching of the pursuit of the performance management plan and appropriate intervention when and where necessary play a fundamental role in promoting compliance. The process of implementing a performance system also involves an evaluation of performance, which includes an assessment of behavior and/or outcomes in the task execution process (Karr, 2014). Poister (2008) found that a performance management system enhances interaction and positive review, which involves discussion of performance, sharing of observations, and requests for feedback from staff as well as joint innovation regarding areas of improvement in the future.

Issues of Performance Management

By definition, an issue is a problem or subject that is subject to a discussion or debate by an individual or group of people. In the context of the research project pursued in the course, "issues" include organizations' problems in the performance management system. The implication is that much focus will be directed towards addressing performance problems in the organization under study. According to Fauske, Busi & Alfnes (2007), there are two major issues associated with performance management: the quantity of work and work quality. The quantity of work refers to the limited production and untimely completion of work responsibilities, which such attributes can evidence as poor scheduling, timing, and prioritizing; lost time (absenteeism, lateness, excessive use of phones, misuse of sick leave); poor responsiveness to work-relates requests and untimely assignment completion; preventable accidents (Pettinger, 2002). On the other hand, quality of work issues is experienced when an organization fails to meet quality standards. It includes issues such as inaccuracies and errors, failure to meet expectations for the service, cost, or quality of products, customer dissatisfaction, waste of materials, and poor or inappropriate work methods.

White (2008) argues that the performance management system and tools should be consistent with certain organizational needs. This implies that an organization may not duplicate a system that has been developed and executed by another organization even when such businesses operate in the same business group or industry. Thus, different users and stakeholders of the system must consult towards designing a unique performance management system for an individual organization. Karr (2014) pointed out that the absence of integration may tremendously compromise a performance management system's success. In this regard, the system should be integrated with the human resource management and strategic planning systems together with all other organizational processes, systems, structures, and cultures (Expósito & Sanchis-Llopis, 2019). More importantly, the lack of commitment in organizational leadership may significantly compromise the successful realization of effective performance management. The management's support and commitment are necessary to smooth implement a performance management system (Karr, 2014). In this regard, organizational leaders have the responsibility of ensuring that they drive the process while also making performance management an important element of the organization's management. White (2008) argues that organizational leaders play a fundamental role in setting both the strategic direction as well as the performance measures in an organization. Moreover, the leaders monitor and review performance throughout the organization while also reinforcing the performance cycle through recognition and rewarding performance.

Work Behaviors related to Performance Issues

There are various work behaviors that are associated with performance issues. According to Råheim et al. (2016), inappropriate behaviors tremendously compromise any performance management system's effectiveness. Examples of such behaviors include hostility, lack of cooperation, negativism, refusal or failure to follow instructions, unwillingness to take responsibility, power games, and insubordination. Fauske, Busi & Alfnes (2007) also points that some employees exhibit behaviors related to resistance to change. In this regard, the employees may deliberately refuse or willingly fail to update their skills towards improved performance in the organization. Mankins & Steele (2005) note that in other instances, employees may exhibit resistance to given work method, procedure, or policy changes, which compromise the potential of improved performance in the future. Another notable work behavior that compromises performance is inflexibility in response to issues or problems at the workplace (Khahan, 2016). This is commonly experienced when employees are unable to adjust to changes experienced in the business environment effectively. In other instances, there are inappropriate interpersonal relations exhibited by employees, which include inappropriate communication styles, destructive sarcasm or humor, fighting, inappropriate conflicts with other employees, and being impatient, argumentative, or inconsiderate (Pešalj, Pavlov & Micheli, 2018).

Elements of an Effective Performance Management System

 Regardless of the approach used in developing and implementing a performance management system in an organization, the primary objective is to realize a common goal. Every approach demands various generic components for proper functioning. Implementing an organization's performance management system is based on the execution of actual procedures used to ensure employee performance. According to Ahmad, Abdullah & Talib (2020), the most important elements of an effective performance management system include mission and vision statements, team objectives, individual objectives, performance appraisal, and feedback through ongoing training and development (Råheim et al., 2016). The vision statement of an organization needs to state the reason for an organization to exist clearly. This implies that the vision statement needs to show the overarching sense and purpose of what an organization is all about (Pešalj, Pavlov & Micheli, 2018). Ahmad, Abdullah & Talib (2020) states that a well-conceived vision encompasses two primary components: envisioned future and core ideology. The core ideology includes the core purpose and core values of an organization (Alneyadi & Almarri, 2020). In an organization, the mission statement should be consistent with the vision. An organization's mission and vision statements are closely linked to the performance management system (Na-Nan, Chaiprasit & Pukkeeree, 2017). Implementing the vision and mission is tremendously dependent on the employees in an organization because they play a central role in transforming them into actionable objectives and goals.

After clearly identifying and communicating the mission and vision statements of an organization to the employees, different teams may be tasked with the responsibility of working on the goals towards the realization of organizational objectives stipulated in the mission statement (Råheim et al., 2016). Team-based systems tend to perform well based on the attention of individuals towards attaining some common goals. Employees acknowledge the fact that effective realization of common objectives requires teamwork because team goals are associated with fostering interdependence and communication. This leads to the prevention of any criticisms that may target performance management systems that are largely developed on the basis of individual performance. The criticism of individual performance is that individuals may focus on realizing their targets at all costs, which may significantly compromise the overall organizational efficiency (Alneyadi & Almarri, 2020). Through the combination of both individual and team objectives into the performance management system is associated with the realization of a more holistic and rounded approach to effectiveness in the organization.

Individual objectives are developed from team objectives, which are presented in the performance contract or performance agreement document (Na-Nan, Chaiprasit & Pukkeeree, 2017). This may be regarded as a top-down approach, which provides employees with security as they know that their goals are consistent and congruent with both team goals and the organization's strategic objectives. The individual performance assessment facilitates an individual's benchmarking relative to some predetermined standards (Koesomowidjojo, 2017). By comparing the performance of an individual against the pre-set standards, it is possible to address any shortfalls that may be experienced. A performance agreement is a contract that is entered between an employee and their supervisor, which clearly sets out the targets of performance that an individual is required to attain within a given time. Developing the performance agreement is instrumental as it seeks to empower the employee towards taking ownership and responsibility of their tasks. At the end of a given period that is spelled out in the performance agreements, the employee and the line supervisor meet towards discussions of the achievements that have been realized in accordance with the predetermined targets of the contract.

Organizations may utilize different strategies towards ensuring a smooth running of their performance management systems. Typically, performance management tends to be alighted with the human resources policies of an organization, which also have to alight with the underlying organizational strategies (Lan, Chengjun & Wei, 2019).This may begin with the selection and recruitment policies and can be manifested in the time allocation for assessing individual performances. It is important to note that the employees who do not realize the expected targets are not intimidated. They experience feelings of inadequacy, especially in some extenuating circumstances. In case of any inadequacies, team leaders or line supervisors have the responsibility of discussing and supporting the affected employees. However, Bianchi, Winch & Cosenz (2018) point out that training and development may not be the most necessary steps towards providing answers to employees' performance.       

Bianchi, Winch & Cosenz (2018) utilized a performance model that asserts that performance is equivalent to motivation and ability. In this regard, the ability will include such elements as resources, training, and aptitude, with motivation including attributes like commitment desire. Therefore, through the use of the model, the implication is that employees who lack the resources, aptitude, or motivational factors may not necessarily need the training to realize the expected implications in terms of their closure to the underlying performance gap (De Feo, 2017). Other components like the increase in motivation, improvement in communication, and enhanced support may form an integral part of the cycle. However, it should be noted that a continuous feedback process is fundamental in ensuring that the management clearly identified areas whereby skills and knowledge are lacking via the implementation of a training needs assessment, including recommendations on training as well as other strategies that may be embraced towards realizing improved organizational performance.

Koesomowidjojo (2017) argues that it is impossible to develop a performance management system and use it across an organization's future. Therefore, there is a need to obtain feedback from all the stakeholders involved in the system (De Feo, 2017). Notably, all the above-average performance standards should be clearly stated. Organizations should be keen to assist employees in the realization of superior performance by providing an empowering and supportive environment, including other extrinsic motivators. Koesomowidjojo (2017) argued that there is a need to measure what is managed in an accurate and consistent manner. For any organization, the bottom line of performance management is its continuous evaluation and review towards ensuring that the employees perceive the process as fair (De Feo, 2017).

Summary

The literature review has presented critical and insightful information in terms of developing and implementing performance management systems, particularly in SMEs. The discussions presented have the definition of performance management, its historical context, criticisms and purpose, and the elements of an effective performance management system. The literature review also articulates the main concepts of performance management and performance management issues. Because the study largely focuses on SMEs' performance management systems, the literature review has emphasized the contextualization of SMEs, including the significance of such organizations' performance management systems. 

CHAPTER III: METHODOLOGY

Research Methods and Design(s)

The case study will be instrumental in the exploration of the performance management systems for the selected SME. Although one case study could be ineffective for generalization, there is a high likelihood that its confirmation of prior research findings implies a tremendous step towards generalization (White, 2008). Typically, research utilizes diverse sources in collecting data, including interviews, company documents, and observation, to illuminate the case from different sides towards achieving generalizability or external or internal validity (Khahan, 2016). Documentary and observation research instruments are considered to be primary methods preferred by case study researchers (Prihatini, Utami & Priyono, 2019). However, when the study objective is to understand a given contemporary phenomenon context and obtain valuable lessons, a research approach involving a case study provides a tremendously important exploratory device. The researcher's primary objective was to ensure that individual participants were given adequate space and time for exploring their own unique perspectives for effective reflection. The design of interview sessions utilized in the research was such that no distractions were present from the perceptions of other respondents.

Population

Sample

In the DSP research, the sampling technique that will be utilized is purposeful sampling, which is also called selective or purposive sampling. In using this technique, qualitative researchers recruit respondents who are capable of providing detailed and in-depth information regarding the phenomenon investigated (Palinkas et al., 2015). This implies that this technique is desirable for the proposed study as it leverages managers who are better placed to offer in-depth and detailed information about performance management in the organization. Ames, Glenton & Lewin (2019) argue that purposeful sampling is highly subjective. The researcher presented with an opportunity to generate the qualifying criteria for individual participants to take part in the study. The purposeful sampling technique is largely utilized in qualitative research towards identifying and selecting information-rich cases for the most effective use of limited resources (Ames, Glenton & Lewin, 2019). In this regard, it involves identifying and selecting groups or individuals with knowledge or experience in a given phenomenon of interest, like the element of performance management in SMEs emphasized in the DSP project. In addition to the experience and knowledge, purposeful sampling considers the significance of the willingness and availability to participate, including the respondents' capacity to communicate opinions and experiences in a reflective, expressive, and articulate manner.

Materials/Instruments

Face-to-face interviews will be conducted with the participants with the objective of obtaining in-depth evidence. The interviews are essential in providing direct quotations from the respondents regarding their knowledge, feelings, opinions, and experiences about performance management systems and their impact on the organization. The interviews will last for about 40 minutes each. The ultimate objective is to gain insights regarding the development of a performance management system over time. The managers will be able to offer feedback with respect to the administrative issues that could influence the performance management system.

Data Collection, Processing, and Analysis Comment by angela wiedenhoeft: In the new version of the DSP Template, this section has been broken out into three separate sections: Data Collection Instruments, Data Collection Procedures and Data Processing. You may want to take a look at the new template and adjust your contents accordingly to their corresponding new headings.

Interviews involve conversations with respondents towards exploring their perspectives regarding a given situation, program, or idea (Karr, 2014). In the bid to collect the relevant information related to performance management for SMEs, I will engage eight senior managers at Filtrine Manufacturing, whereby they will respond to open-ended questions asked. Their responses will be recorded using audiotapes as they offer a greater level of consistency in transcription (Karr, 2014). This will help in effectively analyzing the responses after the interview. The interview method is advantageous as it provides useful information, especially when participants are not available for observations. I will also gain better control over the type of information received as it is possible to choose the most relevant questions to ask. More importantly, the questions asked may encourage truthful and unbiased responses, especially when worded effectively. However, I acknowledge that the method may be limited in terms of potential biasness and deception when the respondent attempts to please the researcher with the responses offered.

Questionnaires are essential in the collection of data, whereby respondents are required to answer numerous open-ended and close-ended questions. The open-ended questions help in ensuring that participants present elaborate thoughts. One of the key characteristics of questionnaires is that they effectively collect quantitative and qualitative data. Questionnaires are very useful in the collection of personal attitudes, facts, opinions, and demographic information of the respondents (Karr, 2014). They provide researchers with an opportunity of realizing a standardization of data and uniformity in design. Because respondents are issued with the same questions, the statistical analysis of the information becomes easier. Comment by angela wiedenhoeft: I see that the Interview protocol will be used for the management interview. It is not clear to what instruments will be employed for the four other former staff members. I am assuming they will be participants of the Questionnaire protocol? Maybe something you can help clarify in this section.

The data collected through the interviews and questionnaires will be largely qualitative, with specific steps embraced towards analyzing the data for the purposes of the project. Firstly, because the data will be majorly composed of words, I will have to read the data severally to get familiar with it while also observing the basic patterns or observation, which forms part of transcribing the data. After this, I will revisit the research objectives, which is aimed at identifying the research questions that can be addressed using the qualitative data collected. Moreover, I will be keen to develop a framework through indexing or coding the data obtained from the respondents, which includes the identification of phrases, behaviors, concepts, or ideas and assigning codes to them. The coding process plays a fundamental role in labeling and structuring the data (Grossoehme, 2014). After coding the data, I will embark on identifying any connections and patterns manifested. This includes identification of themes, establishing the most common responses by the participants, identifying patterns or data that is capable of answering research questions, and looking for areas that could be further explored.

Assumptions

Limitations

Delimitations

Ethical Assurances

A major permission consideration for the DSP project involves the Institutional Review Board (IRB) requirements before conducting the research. The IRB is an administrative body whose primary aim is to protect the welfare and rights of human research subjects involved in research endeavors undertaken under the auspices of the affiliated institution. The primary responsibility of the IRB is to review all the research involving human participants before it is initiated. Moreover, the IRB can approve, disapprove, monitor, and require modifications in numerous research endeavors that fall within its jurisdiction in accordance with both the institutional and federal regulations (Palinkas et al., 2015). I will write to IRB to obtain permission to undertake research on human subjects. I understand that for the IRB approval of the research subjects, a specific process or criteria needs to be executed. For instance, any potential risks to the respondents should be minimized. In this regard, all the procedures involved in the research process need to be consistent with a sound research design whereby respondents are not exposed to any unnecessary risk.

Summary

Based on the research methodology utilized for the research, it may be argued that the method will be effective in exploring the views and perspectives of the participants involved in the study. The respondents will offer critical insights towards the analysis of the topic under investigation. Although it may be challenging to conduct the interviews with every respondent due to the repetitiveness attribute in the structured interview questions and the amount of time involved, the entire process is considerably worthwhile due to the implications of the research findings to the organization. With the contacted research participants portraying significant generosity in providing the desired feedback for the study, the data obtained will be both knowledgeable and insightful, particularly with respect to the performance management system in Filtrine Manufacturing. One of the key conclusions obtained is that organizational leaders play a fundamental role in the long-term development and implementation of performance management systems in SMEs. The managers who will form an integral part of the research respondents will utilize the study's findings to ensure the improved performance of their teams, which contributes to the overall productivity and profitability of the organization.

CHAPTER IV: DATA COLLECTION AND DATA ANALYSIS

(note: sectionshould be 10 – 20 pages)

[Begin the discussion with a brief overview of the purpose of the research study and provide a brief overview of the chapter. Organize the chapter around the research question(s). Review the APA manual and published, peer-reviewed, empirical research articles for examples of how to report results of various research designs. ]

Note: If changes are made to instruments after proposal approval, through an expert review or pilot study, explain the changes made before explaining the results. Ensure the updated version of instruments are provided in the Appendix.

[Data analyses – Report results without discussion (interpretation, speculation, etc. appears in the next section):

1. For Quantitative analyses,

a. Give appropriate descriptive information,

b. Present the results in a logical fashion, answering the research question(s)/hypotheses as stated and appropriate to the type of data collected,

c. Identify assumptions of statistical tests and address any violation of assumptions,

d. Make decisions based on the results of the statistical analysis (for example: Are the results statistically significant?). Include relevant test statistic and p values.

e. See the APA manual regarding how to present results in text, tables and figures,

f. Present sufficient information so the reader can make an independent judgment regarding interpretation.

2. For Qualitative analyses

a. Present results logically and in a way that answers the research question(s) by distillation steps of the discernment process,

b. Present sufficient information so the reader can make an independent judgment about your interpretation,

c. Review published articles that use similar designs for examples of how to present qualitative, thematic findings,

d. Ensure that no potentially indentifying information is published.

3. Mixed Method include all of the above.

Note: Triangulation of data should be explained in this section, if applicable. Tables and figures, where appropriate, are necessary and referred to in the text. Ensure compliance with APA format of tables, table titles, figures and figure captions. See APA, 6th ed, Chapter 5 for guidelines on displaying results.]

[This section is used to briefly report what your findings mean. The discussion will be expanded in Chapter 5. Interpret results in light of the theory (or theories) and/or the conceptual framework(s) you have identified. Describe whether the results obtained were expected given the literature and provide potential explanations for unexpected or conflicting results. Take care to avoid drawing conclusions beyond what can be interpreted directly from the study results.]

[Discussion summarizes key points presented in Chapter 4.]

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(note: section should be 10 – 20 pages)

[Begin the discussion with a brief review of the problem statement, purpose, method, limitations, and ethical dimensions, and conclude the introduction with a brief overview of the chapter.]

[Discuss each research question, and draw logical conclusions. Note: support all conclusions with the research findings and avoid drawing conclusions that are beyond the scope of the study results. Discuss how any potential limitations may have affected the interpretation of the results. Place the results back into context by describing how the results respond to the study problem, fit with the purpose, demonstrate significance, and contribute to the existing literature described in Chapter 2.]

[Present all recommendations for practical applications of the study. Note: support all recommendations with the research findings.

Present recommendations for future research.]

[In this section, summarize all key points in Chapter 5.]

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