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Breakthrough Leadership Skills MN7028 Topic 5: Organisational Performance 1

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Learning Outcomes To evaluate contemporary debates in - and models of - HRM and HRD to explain current practice employed in organisations for managing people. To define and explore the concepts of performance and performance management To discuss High Performance Work Systems (HPWS) To evaluate the role of effective people management policies and practices in enhanced organisational performance. To contribute to the effective implementation of systems and enhanced organisational performance. To explain the main factors that can facilitate or impede effective organisational performance.

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Hard versus soft HRM Hard HRM: focus on profitability and well-being of the organisation; stresses the ‘resource’ aspect of HRM Soft HRM: associated with the human relations movement; employees are valued assets and a source of competitive advantage Short-term versus long-term focus? A false dichotomy?

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Ulrich’s (1997) Four Roles of HR Professionals People Future/ strategic focus Day to day /operational focus Processes Employee Champion Administrative expert Strategic Partner Change agent

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What is Performance? ‘the outcomes of work’ or ‘a record of a person’s accomplishment’ ( Bernadin et al, 1995) and Kane, 1996) Or alternatively ‘the ways in which organizations, teams and individuals get work done’ (Campbell, 1990) Or maybe a combination of outcomes and behaviours: ‘Performance means both behaviours and results … behaviours are also outcomes in their own right – the product of mental and physical effort applied to tasks – and can be judged apart from results’ (Brumbach, 1998 in Armstrong, 2012)

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What are the components of Performance? Job-specific task proficiency Non-job specific task proficiency (e.g. Organizational Citizenship Behaviour) Written and oral communication proficiency Demonstration of effort Maintenance of personal discipline Facilitation of peer and team performance Supervision/leadership Management/administration (Campbell et al, 1993)

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Three dimensions of Performance Management (after Shields, 2007) ‘Individual results flow into group results, which in turn contribute to organization-wide results’ ( Shields 2007, cited in Armstrong, 2017) So Armstrong (2012) argues that you need to look at it at individual, team and organizational levels. Performance culture High Performance Work Systems (HPWS)

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Four perspectives of Performance Measurement (after Kaplan and Norton 1992) Financial Perspective– how do we look to shareholders? Customer Perspective - how do customers see us? Internal Business perspective - what we need to excel at? Innovation and Learning Perspective – can we continue to create value?

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Performance Management ‘A systematic process for improving individual, team and organisational performance’. (Armstrong, 2014 p.331) The continuous process of improving performance by setting individual teams and goals whiah are aligned to the strategic goals of the organization, planning performance to achieve the goals, reviewing progress, and developing the knowledge, skills and abilities of the people.’ (Armstrong, 2017 p.391)

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Best practice HRM Definition: “The best practice view identifies a set of HR policies that, it is argued, is associated with improved performance in all types of organisations and, by implication, for all types of employees” (Kinnie et al, 2005: 9) Note: other terms – high commitment HRM, high involvement HRM, high performance work systems all embody the notion of Best Practice.

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Best practice HRM and organisational performance Assumption that particular bundles of HR practices have the potential to contribute to: improved employee attitudes and behaviours lower levels of absenteeism and labour turnover higher levels of productivity, quality and customer service in all types of organisation. This has been argued to have the effect of generating higher levels of profitability (Marchington and Wilkinson, 2009)

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Components of best practice HRM Employment security and internal labour markets Selective hiring and sophisticated selection Extensive training, learning and development Employment involvement and participation: worker voice Self-managed teams/team-working High compensation contingent on performance Performance review, appraisal and career development Reduction of status differentials/harmonisation Work-life balance (‘adapted significantly’ from Pfeffer, 1998 and cited in Marchington et al, 2016)

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‘Bundles’ of HR practices Long history researching individual best practices Best practice HRM is about combining these together into ‘bundles’. Based on the idea that investment in individual practices will have limited effect whereas making changes together will have a more powerful effect . This suggests there is a specific set of practices which can and should be adopted by firms which will lead to universal improvements in performance. (Wilkinson and Redman, 2009)

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The People and Performance link (Purcell et al, 2003) Research programme to explain ‘how and why HR practices impact on performance’ ( p.ix ) Starts with the framework of AMO: ‘performance is a function of Ability + Motivation + Opportunity’ A key to the HR- Performance link is the existence of a ‘Big Idea’ in the org. with ‘a clear mission, underpinned by values and a culture expressing what the company stands for and is trying to achieve’ The big idea displays 5 common characteristics: ‘embedded, connected, enduring, collective and ‘measured and managed’’

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The People and Performance link (Purcell et al, 2003) Bringing policies to life: the critical role of line managers ‘the exercise of employee discretion is crucially affected by the way in which managers exercise their own discretion’ (p.37) Model for ‘Front-line management’ Implementing Enacting Leading controlling

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High Performance Work Systems (HPWS) and performance ‘HPWS are bundles of HR practices that facilitate employee involvement, skill enhancement and motivation. HPWS provide the means for creating a performance culture’ (Armstrong, 2017) Definitions vary but Shih et al (2005) identify the following components: Job infrastructure (AMO) Training Programmes to enhance employee skills Information sharing and worker involvement mechanisms Reward and promotion opportunities that provide motivation

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Characteristics of a high-performance work culture (Armstrong, 2010) Management defines what it wants in terms of performance and its goals, with a ‘clear line of sight’ between strategic aims of org and team and individual levels Job redesign, autonomous work teams, improvement groups, team briefing, flex work Clarity on goals, underpinned by the PM processes Cultural fit between org goals and individual capabilities Empowered workforce Strong leadership engendering shared belief in continuous improvement Engaged, committed, motivated employees Capacities of people are developed through learning Climate of trust and teamwork aimed at delivering to the customer People are valued according to their contributions There is a steady pool of talent available from which to identify high performers

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Three theories underpinning Performance Management Goal Theory (Latham and Locke, 1979) Reinforcement Theory (Skinner, 1938) Social Cognitive Theory (Bandura, 1986)

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Four elements of Performance Management Agreement Feedback Positive reinforcement Dialogue (Capelli: 2008)

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Principles of Performance Management (after Egan, 1995) Performance Management should provide: Direction Freedom to get their work done Encouragement (and not control) Leading to growth Leading to strategic collaboration (Egan cited in Armstrong, 2017)

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Principles of Performance Management (after Strebler et al, 2001) Performance Management systems should: Have clear aims and measurable success criteria Be designed and implemented with the involvement of the employee Be simple Be aligned (and contribute to) organisational goals, ‘line of sight’ Focus on role clarity and performance improvement Be aligned with complementary L and D initiatives Explain rationale which links them to rewards Be equitable, transparent Be regularly assessed themselves against success criteria ( Strebler et al cited in Armstrong, 2017)

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People Managers are a crucial element Reinforce the link between organizational objectives and individual ones Give feedback Keep employees on course, or steer them back on course Hold employees ‘accountable’ (CIPD, 2017) Senior leaders meanwhile define and demonstrate the desired culture, mission, vision and values

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Why Manage Performance? Individual goals can be aligned with organizational goals and specifically (according to Jones et al, 1995) to: Build a Shared vision Avoid ambiguity by clearly defining roles of all employees Provide an unambiguous framework for individuals Provide an unambiguous framework for teams Provide an unambiguous framework for rewards Key notion of ‘accountability’ (CIPD, 2017)

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Why Manage Performance? (after Henderson, 2010) Motivation to perform is increased. Self-esteem is increased. The job definition and criteria for job success are clarified. Managers gain insight about subordinates, which helps the manager build relationships with their staff.

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Why Manage Performance? (Henderson, 2010, cont’d) Self-insight and development are enhanced. Employees become more competent. HR actions are likely to be fairer (and perceived as such) There is better protection from lawsuits. There is better and more timely differentiation between competent and poor performers.

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Why Manage Performance? (Cont’d) Supervisors are forced to address performance problems before they become too costly, and cannot be remedied. Supervisors’ views of performance are communicated more clearly. Organizational goals are made clear. Organizational change is facilitated.

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Typical Performance Management System An agreement between individual and manager setting out objectives and development needs. Performance is continually monitored , assessed and reacted to. Regular formal review of performance against objectives, and setting of new performance agreement . ‘holds people to account’ (CIPD, 2017)

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Planning for Performance The manager must know the criteria for success or failure, in order to assess performance. Specifically, the manager must be aware of the knowledge, skills and abilities (KSAs) needed to do the job competently. The KSAs and criteria for job success should be explicit in the relevant job descriptions.

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Supporting Performance Maintaining continuous awareness of how the employee is performing, and giving feedback on this on a mainly informal basis. Revising initial objectives, standards, key accountabilities and competency areas if required without waiting for scheduled formal performance appraisal meetings. Supporting Personal Development Plans.

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Personal Development Plan Personal Development Plans are a key component of Performance Management (according to Henderson, 2010) A good development plan assist employees to: do better in the future avoid past performance problems

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Constructive Performance Management ‘Performance management should be a continuous process which links together performance, motivation, individual goals, departmental purpose and organisational objectives; these in turn should be overseen by management but engage the workforce’ (Marchington, 2012)

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Key components of performance management (Mearns in Watson and Reissner , 2014, p.259) Recruitment and selection Induction Reviewing, appraisal and feedback Reward and reinforcement Training and Development Communication, support and counselling Management of poor performance Organisational Culture

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Good Induction offers these benefits (Mearns in Watson and Reissner, 2014, p.278) Relaxed and settled employee Employee more open to training and development Retention levels are higher (Fritz and Vonderfecht , 2007) Links between good induction and positive ER/IR

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Poor Induction risks these outcomes (CIPD in Watson and Reissner , 2014, p.278) Weak integration into team Low morale and low motivation Reduced levels of performance and productivity and if they leave Additional recruitment costs Wasted time/money in training Knock on impact in team productivity/performance

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Performance Appraisal Process offers these benefits (Mearns in Watson and Reissner , 2014, p.280) Clarify expected standards and measure against them Allocate rewards Identify high performers Highlight training and development needs Discuss career progression Counsel employees (where needed) Give constructive feedback Establish future aims, objectives, targets Motivate employee and increase their morale Improve communication

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Some conclusions about Performance Research findings as to the links between performance management and performance are mixed and inconclusive. CIPD (Gifford) says their research found no clear evidence. Armstrong argues for Employee involvement in the process on the basis that ‘people are more likely to respond positively and are more likely to work to improve their performance and develop their capabilities if they share in the processes of defining expectations [and] are involved in creating and developing their skills and competencies’ (Armstrong, 2017. p.396) Performance management has benefits for the employer, not least in informing decisions on remuneration for outcomes. From the employee’s point of view it can facilitate rewarding people ‘by recognition through feedback, the provision of opportunities to achieve, the scope to develop skills, and guidance on career paths’ (ibid). These are all non-financial sources of Employee Engagement. Furthermore they all require leadership from the line manager.

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Selected References Armstrong, M and Taylor, S. (2015) Armstrong’s Handbook of Performance Management. 5 th Edn . London: Kogan Page (available online from Lon Met) Boxall, P. and Purcell,, J. (2008) Strategy and Human Resource Management. 2 nd ed. Basingstoke: Palgrave Macmillan Boxall, P. and Purcell,, J. (2015) Strategy and Human Resource Management. 4 th ed. Basingstoke: Palgrave Macmillan CIPD: numerous factsheets and reports available for the CIPD website at www.cipd.co.uk , including Could do better? Assessing what works in performance management . Henderson, I. (2010) Human Resource Management for MBA Students. London: CIPD Kaplan, R. S. and Norton, D. P. (1992) ‘The Balanced Scorecard--Measures That Drive Performance’, Harvard Business Review , 70(1), pp. 71–79. Available at: http://0-search.ebscohost.com.emu.londonmet.ac.uk/login.aspx?direct=true&db=bth&AN=9205181862&site=ehost-live (Accessed: 31 March 2020). Purcell, J., Kinnie , N., Hutchinson, S., Raylon, B. and Swart, J (2003). Understanding the People and Performance Link: Unlocking the Black Box. London: CIPD. Watson, G. and Reissner , S. (2014) Developing Skills for Business Leadership. London: CIPD

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The Contribution of HRM and HRD in Organisational Performance and Customer Service Shortland Natalie Langley 137 2020-03-31T19:41:41Z 2010-05-19T12:12:10Z 2023-09-21T12:17:31Z

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0 2631 Microsoft Office PowerPoint Widescreen 312 38 38 0 0 false Fonts Used 6 Theme 1 Slide Titles 38 Arial MS PGothic Lucida Sans Wingdings Times New Roman Tahoma Default Design Breakthrough Leadership Skills MN7028 Learning Outcomes Hard versus soft HRM Ulrich’s (1997) Four Roles of HR Professionals What is Performance? What are the components of Performance? Three dimensions of Performance Management (after Shields, 2007) Four perspectives of Performance Measurement (after Kaplan and Norton 1992) Performance Management Best practice HRM Best practice HRM and organisational performance Components of best practice HRM ‘Bundles’ of HR practices The People and Performance link (Purcell et al, 2003) PowerPoint Presentation The People and Performance link (Purcell et al, 2003) High Performance Work Systems (HPWS) and performance Characteristics of a high-performance work culture (Armstrong, 2010) Three theories underpinning Performance Management Four elements of Performance Management Principles of Performance Management (after Egan, 1995) Principles of Performance Management (after Strebler et al, 2001) People Managers are a crucial element Why Manage Performance? Why Manage Performance? (after Henderson, 2010) Why Manage Performance? (Henderson, 2010, cont’d) Why Manage Performance? (Cont’d) Typical Performance Management System Planning for Performance Supporting Performance Personal Development Plan Constructive Performance Management Key components of performance management (Mearns in Watson and Reissner, 2014, p.259) Good Induction offers these benefits (Mearns in Watson and Reissner, 2014, p.278) Poor Induction risks these outcomes (CIPD in Watson and Reissner, 2014, p.278) Performance Appraisal Process offers these benefits (Mearns in Watson and Reissner, 2014, p.280) Some conclusions about Performance Selected References London Metropolitan University false false false 16.0000