Term Paper on "Performance Measurement"

Term Paper 7 pages (2302 words) Sources: 1+

[EXCERPT] . . . .

Performance Measurement

It has been realized by managers employing good managerial practices that measurement and management are closely interlinked. In the present economic environment, the value of a company depends largely on intangible assets and less on physical or tangible assets. As a result, the asset base with the maximum power for adding value to the organization is even the most difficult to describe, explain and manage with accuracy. This signifies a challenge as well as an opportunity for the HR practice leader. It is ripe to take the asset allegory to a new level to consider workers not just as human capital rather as human capital owners and investors. Akin to the employee-asset concept, the image of workers as investors is not precisely new. Similar to the asset concept, the investor concept stresses on value and it is the workers and not organizations who are the owners of this human capital and it is they who take decision as regards when, how and where they will put in.

Similar to financial investors, some investors of human capital are more active compared to others. Two forces have teamed up to build the measurement of human capital of growing interest and significance to the corporate world. Business competition is the first one that results due to the globalization of trade and crucial sectors, for instance telecommunication, electricity, transportation and financial services. The next one is the arrival of information technologies which has been epitomized by the Internet. These twin basic developments, the first one economic and political, and the other technological have remarkably altered the structure of business and propelled intangibles into the major value driver of business in the developed countries. (the value of people: the challenges and opportunities of human capital measurement and reporting)

The future accomplishment of any organization is dependent on the capability to manage a varied body of talent that can introduce pioneering concepts, perspectives and views to their work. The challenges and intricacies encountered as a result of variety in the workplace can be converted into a strategic organizational asset if an enterprise is capable to take advantage of the diverse talents. Given the combination of talents of varied cultural backgrounds, genders, ages and lifestyles, it will be possible to react to business opportunities more speedily and ingeniously, particularly in the global sphere which have to be one of the important organizational objectives to be achieved. It is pertinent to note here that in the event organizational settings do not support variety broadly, there is an imminent risk of losing talent to the competitors. This situation happens in case of multinational companies those who are carrying out their businesses on a global scale and hire individuals of various nations, ethical and cultural backgrounds. Therefore, a HR manager is required to be attentive and might put up a 'Think Global Act Local' approach in a majority of the circumstances.

A typical case can be cited of Singapore, which has a population of only four million people but in its endeavor towards high technology and knowledge-based economy is shaped by foreign talents who are lured to share their expertise in these spheres. Therefore, a lot of local HR managers are required to experience cultural-based HR management training to advance their capabilities to inspire a team of professionals who are equipped with high qualifications but culturally diverse. Besides, the HR professional should guarantee the local professional who have a high qualification but are culturally diverse. Besides, those HR professional should give confidence to the local professionals that these talents from foreign nations do not pose any risk to their career development. In a lot of manner, the efficacy of management of workplace diversity is dependent on the balancing act of the HR manager. To efficiently manage the workplace diversity it has been suggested by Cox in 1993 that a HR manager is required to transform from an ethnocentric view that "our methods are the best methods" to a culturally relative viewpoint of "come let us take the best from the diverse methods." This change in philosophy is required to be inbuilt in the managerial framework of the HR manager in his planning, organizing, leading and controlling of organizational resources. As per the suggestion of Thomas and Cox a lot of best practices are available which a HR manager can adopt in making sure that efficient management of diversity in the workplace so as to achieve organizational goals. (the Challenges of Human Resource Management)

It is increasingly experienced that challenges are always counterbalanced by opportunities. Building a culture in which people receive good treatment despite the position in the organization is coming to be increasingly important these days. Whether baby boomers or Generation X nearly every 21st century employee at each level desires to be dominant in the decision making stages of the company. Among the many methods to achieve this is gratifying the workforce for innovative suggestions regardless of their position inside the organization. A practice like this can be advantageous for the company also. Eventually, culture undergoes a transformation as the company attains growth and its mission evolves. It is the directive of HR to capture that culture and guarantee its alignment with corporate goals and purpose. (HR in the 21st century: Challenges and Opportunities)

Framework for Integrated Performance Management:

The front running organizations are beginning the insight gap by means of a practice known as the Integrated Performance Management - IPM. IPM is a holistic methodology, which extends every processes and technologies connected with Performance Management right from planning, budgeting and forecasting to reporting, performance measurement and compensation. IPM renders performance management more effective and increasingly consistent throughout the entire organization, bettering the quality and timeliness of information and making new business insights that assist in the decision makers and propel the organization to an elevated level of performance. The organization's strategic agenda is supported by IPM through provision of developmental statements both financial as well as non-financial information to enhance making of decision and propel overall performance. It helps the decision makers with rapid and easy access to important data regarding performance and aids in the people to work collectively to develop practical and consistent plans. IPM is regarded as a holistic approach covering all aspects of performance management comprising of strategy, business processes, technology and people. (Integrated Performance Management - the key to generating business insight)

It has three important elements viz: (i) Reporting and Performance Management (ii) Budgeting Planning and Forecasting (iii) Organizational Alignment. As regards reporting, decision makers require quick, access to required information from a single source. Further information has to be dependable, timely and consistent. Reporting and performance measurement broadens far beyond technology. Reporting and performance measurement has been defined to include financial reporting, operational reporting, key performance indictors, business and financial analysis and reporting of performance indicators and operating results. The initial step in the direction of integrated reporting is to find out the critical information decision makers require and to choose definitive sources. In order to find out the organization's information requirement, it is important to begin by testing its performance scorecards at the corporate, business unit and functional levels. The proficiencies and the critical success factors have to be found out which drive the success of the business and facilitate the organization to fulfill its strategic goals. Thereafter, these insights have to be used to connect high levels and detailed performance measures to the success factors of the organizational goals. (Integrated Performance Management - the key to generating business insight)

It has been found that organizations often identify one or more of the seven elements as the most challenging while executing performance management systems. These obstacles can be overcome but elements which need the maximum attention and work. In case these are not dealt with performance management can be a failure. (Common Performance Management Challenges - White paper)

Challenges:

i) Estimating and evaluating dimensions (ii) Maintaining the leaders focused (iii) Associating the job descriptions to performance measurement (iv) Implementing performance management for staff. (v) Connecting compensation to performance management. (vi) Matrix management (vii) Maintaining the system alive. (Common Performance Management Challenges - White paper) the value of intangible assets is coming to be more and more vital and making sure that this value is the job of Human Resources, in spite of having to deal with lean workforce and more and more complex roles. Increasingly, HR is speedily going up in stature and relevance and importance as the tool for leveraging human capital. We possess a unique chance to place ourselves as business partners who genuinely are aware regarding what is needed to drive organizational success by way of efficient people strategies. In this new role there is a great scope for learning and growth.

A lot might discover this to be intimidating while a lot of others might identify this as a huge opportunity for creating new skills. HR is gearing to the challenge, however, the real devotion and commitment will be necessary to keep pace… READ MORE

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