Case Study on "Performance Management Colbran Institute"

Case Study 7 pages (1797 words) Sources: 10

[EXCERPT] . . . .

Performance Management

An Overview and Analysis of Key Performance Management Practices and Their Application to a Case Study

Performance management can be specifically defined as "an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization" (Regents 2007). In broader terms, performance management can be defined as the set of practices and perspectives that are utilized within an organization in order to determine the degree of efficacy with which each individual within the organization accomplishes their expected tasks and responsibilities, and to actively bring about an improvement in this efficacy inasmuch as is possible. In the Cobran Medical Institute case study at hand, performance management practices and policies are rather loosely defined, and though this seems an adequate state of affairs for certain stakeholders within the company, management is concerned -- and rightly so -- that a lack of specification could lead to eventual inefficiencies and reduced performance.

Performance Appraisal

One of the key features of any performance management system is the performance appraisal. The monitoring of performance is the only way in which problems or successes can be brought to light, and developing an effective appraisal system is a major contributor to the success of a given organization's performance management system (Luecke & Hall 2006). The terms of the appraisal also help to define expectations for team members.

Because of this dual use that is inherent to the instrument, the performance appraisal can in many ways be seen as the beginning and end of the performance management system -- it provides the criteria against which all employees will be measured, and serves as the tool for measurement as well (Heathfield 2010). The greater the clarity in a performance appraisal instrument, the more efficacious this instrument will be not only in measuring the achievement of company objectives, but also in enabling the achievement of these goals through ensuring proper knowledge of them in the workforce (Otley 2002). The lack of specificity in the performance appraisal instrument in the Cobran Medical Institute might not seem to be having a negative impact on performance, but given the lack of definition when it comes to achieving success it is difficult to use the existing performance appraisal system to come to any conclusions other than when it might perhaps be time to terminate someone -- adequate work is "good" or excellent," and it is presumed that inadequate workers are not kept in the organization. This performance appraisal system, then, does not serve as an adequate tool for efficient performance management.

Training and Development

Performance management is also highly dependent on the proper training and development of organization members. A key part of long-term performance strategies is the ongoing education and future grooming of individuals within any given organization (Kloot & Martin 2000). Without ongoing training and development, stagnation is the best that can be hoped for in performance.

Such stagnation is likely to be replaced by further degradation and backwards progress if training and development do not become regular parts of an organization's performance management plan. The continuing development and redevelopment of performance appraisal documents and procedures is, in fact, a large part of the training and development process of organizations with successful performance management practices; a running dialogue between the managers and performers in any performance management schema is essential to its success (McNamara 2010). This also allows for training and development to be adjusted to be kept in line with shifting organizational objectives and values (Bacal . There is evidently a gap in the development program at the Cobran Medical Institute, otherwise Isabel would already have an understanding of performance management similar to that of HR manager Allan Matters. The different perspectives and awarenesses of these individuals, and the apparent lack of regular communication and feedback between these two individuals and the employees under Isabel with Allan Matters, are indicative of failures in the development process at the organization.

Remuneration

Reward for improvements and achievements in development is also an essential part of the performance management process, and monetary remuneration is a common reward in the business world (USOPE 2010). Pay incentives can be an effective means for creating changes in performance, but long-term values and attitudes are perhaps another story.

While remuneration can be a highly effective motivator in terms of performance management, it is not always seen as the primary motivator in terms of employee productivity or attitude. Intrinsic factors of the work environment can be far more influential in these terms, acting as performance motivators or inhibitors to much greater degrees than issues that are under direct and immediate management control (Lebas 1995). In the area of performance management, however, there is a great ethical imperative to make sure that any changes to remuneration based on performance analysis take place in the context of a broad and explicit understanding of the performance appraisal system used, ensuring that employees retain conscious control, to some degree, over their level of compensation by the company (Armstrong 2004). This aspect of performance management also has major implications for Cobran Medical Institute, as Allan Matters indicates that the results of the performance appraisals are used to influence decisions in possible changes -- both positive and negative -- to employees' pay-scales.

Possible Distortions

In addition to -- and in many ways complementary to -- the specific practical issues of performance management identified above in relation to the research that are facing the Cobran Medical Institute -- other problems exist for this institution given the current state of its performance management policies, practices, and perspectives. These performance appraisal and management issues could lead to distortions in performance appraisal as well.

This means that in addition to having ramifications for the overall performance of the organization, individuals could be mis-appraised due to the inefficiencies and inconsistencies that exist in the organization's performance management system. The most extreme and egregious example of this is in the lack of clarity and specification in the performance appraisal instrument and process; the graphical system that is currently in place is far to broad and vague, and there is no apparent feedback process or direct communication regarding performance appraisals. Two people both ranked as "good" could have significantly different performance outputs, and when these appraisals are tied to pay and promotion then these distortions increase dramatically in the magnitude of their effects, and the degree of their very distortion. Inadequate analysis necessarily leads to distorted analysis, whether this means misinterpreting someone's work as better or worse than it really is in an absolute sense or coming to a misunderstanding regarding the relative performance of multiple organization members, and this leads to inappropriate performance management actions.

The lack of training and development systems and opportunities at the Cobran Medical Institute could also create some semblance of distortion in the performance appraisal and performance management systems in place in the organization. This leads to a lack of consistency in expectations and perceived responsibilities, goals, and values, which can lead to highly varied performance analyses or misunderstandings of an employee's overall attitude and behavior at work (Armstrong 2004). Such distortions are themselves hugely disruptive to performance.

Recommendations

In order to address the many problems with the performance management scheme at the Cobran Medical Institute, it is suggested that a behaviorally anchored rating scale, or BARS, be put in place as a new method for performance appraisal. Though rating systems in general have the disadvantage of lacking any sort of foresight or planning capabilities, making them largely unwieldy for organizations attempting to instigate change in the short-term, behaviorally anchored rating scales can greatly increase the specificity of the current appraisal system in use at the Cobran Medical Institute and lead to a more effective application of performance management principles (Armstrong 2004; Bacal 1999). Behaviorally anchored rating scales identify clearly and explicitly key behaviors and values that are desired in organization members, limiting the possibility for distortion in appraisals and restoring both efficacy and fairness to the performance management system.

This will also enable greater scrutiny of individual performance, which appears to be a driving goal between Allan Matters' questioning and prompting of Isabel. Though Isabel insists that her department is just fine, Allan Matters is less concerned with collective measures; this management perspective, whatever its root cause, will be better served by a performance appraisal tool that is highly specific, providing a unique and detailed -- in the terms defined by the organization -- overview of each employee following appraisal. This will better enable management at the Cobran Medical Institute to make personnel choices.

This will also help Cobran to achieve its strategic objectives by making those objectives, and the values and goals that will lead to those objectives, clear to the other members of the organization who will be subjected to the performance appraisal system. Using a behaviorally anchored rating scale with specific terms for success defined by the organization itself will ensure that performance expectations and appraisals are in… READ MORE

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