Research in the field of business indicates that performance management undertakings play a critical role in improving the output of an organization. This is particularly the case due to the positive impact it has on individual employees both at the guidance and motivation fronts. However, once an organization develops such a system, there is a need to conduct a well-sequenced audit to ensure that necessary realignments are integrated into the scheme on time (Aguinis, 2014). This is critical since one has to guarantee that the system in place is coherent with the interests of the company and, at the same time, considers the current workforce capacities. John Mike, the managing director of the Highland Healthy Drinks Company, commissioned this performance management audit report with the intention to analyze the present scheme identifying elements of strength and areas that need improvements.
Nature of the Performance Management System
The current performance system of the company is formal in nature which means that the employees' work is assessed through a scheme that was formulated by the management in close consultation with the staff members. However, each department has unique parameters used in the evaluation of the workers' activity. The choice of such an approach can be explained by the need to demonstrate the appreciation of the different roles that the departments play in the organization. Moreover, the managerial decision that the assessment should be conducted at the departmental level helped guarantee its objectivity. In addition, target oriented system is used as the general performance management scheme at play in the company.
Measurement of Performance
Departmental heads set the expected targets for their employees at a specified time. It takes place in the form of the meeting where the junior staff members and their managers correlate the general company's goals and their roles towards the realization of these aims as a department. It is the feedback of this gathering where individual objectives are set. These are usually the roles that the department has to fulfill to ensure the business's goals are realized. Then, personal aims are distinguished. In the end, the realized goals are compared with the set target to identify the employees that have met the expected threshold.
The employees' perception of the performance management scheme is very crucial since it influences the ability of the system to shape the workers' input. Therefore, a due and diligent interview session with staff members randomly chosen from every department was done to capture their attitude. The randomness of the selection was helpful in ensuring that the results collected did not possess any element of bias regarding representation. One of the critical aims was to identify the employees' judgment of the scheme concerning its relevance. In this context, it was evident that the system being multivariable and respecting the uniqueness of every group of workers was a trait that was seen by the workers as relevant and helpful. Moreover, they argued that this nature of the policy allowed room for the evaluation of the departmental output in a subjective manner that considered the challenges that may have risen in during the time under evaluation. For instance, a lot of the interviewees mentioned the case was with the packaging machine that, at some time, experienced mechanical issues. The assessment process takes into account such difficulties and, therefore, the final decision made is usually reflective of all possible factors that are at play. This is a good feature of the scheme since it brings about the sense of consideration because the factors beyond the employees' control are paid attention to when a staff member is being vetted on the attainment or lack of it. Furthermore, a good performance management system is not set as a punishment for the workers, but a policy where personal and organization growth are encouraged (Winland, 2014). This is, therefore, clearly an area of strength in the system that needs to be upheld in the Highland Healthy Drinks Company as means of guiding and motivating the employees.
In addition, for the employees, having a departmental-based performance management system is supportive considering their goal of improving one's craft. Since there are fewer workers per department compared to the entire company, their heads can guide their subordinates promptly. Besides, the staff members indicated the system being centered on departments provided an avenue where they were in a position to work coherently as a team. This, in turn, has helped towards ensuring that departmental targets are met, a phenomenon that highly contributes to the employees' motivation.
The mentioned above findings reflect a well-thought-out performance management system since a good policy is the one that brings about cohesion among the workers. Moreover, it empowers the employee, a fact undoubtedly well captured by the company's management (Pennsylvania Bar Institute, 2014).
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Another insight provided by the interviewed employees is the fact that the performance management system provides room for the workers to interact closely with the directorate. This is because, under the system, goal setting is an undertaking where department heads consult with their subordinates to find a good way of ensuring that the responsibilities assigned to the workers conform both to the main goals of the company and the departmental targets. It is at these meetings that a strong bond is created between the management and the employees of different levels. The result of this form of engagement is that workers have easier access to their managers and can, thus, inform them on various challenges undermining their ability to meet the set goals.
At the same time, this form of cooperation has also had an impact on departmental output as the collaboration between these parties has led to improved efficiency within the manufacturing and processing sectors. In any successful organization, the management and the employees work as a team aiming at attaining the pre-determined goals. Similarly, under the current Highland Healthy Drinks Company's performance management scheme, it is evident that these two parties work cohesively in a complimentary manner. This can only lead to a situation when the business is expected to not only improve its efficiency but also provide room for diverse views on the operations from the employees leading to better personal and collective growth within the organization.
However, there was a point of view that the system lacked a clear career path with the employees remaining in the same position over the years. This factor makes the staff members feel that there is no room for the company to further their career. Consequently, the result of this challenge is that some of the workers have left the company for better offers available.
According to the Maslow's Hierarchy of Needs, one of the ways an organization can lift spirit of the employees is through creating a sense of belonging a that leads them feeling part of the group/company (Bhattacharyya, 2011). In contrast, the lack of clear career path works in the opposite way. When employees cannot see the direction their career is taking, it becomes harder for them to “feel at home” at the concerned business, and this leads to a majority of them feeling their career is stagnating, and the likelihood is that they end up leaving the organization (Venkateswara, 2014). Thus, there is a clear need for the management to formulate clear career guidelines in the best way possible to ensure that staff members have room to grow in both their expertise and responsibility within the company.
Evaluation Of the Measures of Performance
The primary measure of performance is target-oriented meaning that there is a comparison between the set and realized aims. Moreover, the system has a segmented performance comparison approach where the attained objectives are expressed as a percentage. This is in the line of demonstrating the rationale utilized while recognizing individuals and, sometimes, groups. With the company being in the manufacturing sector, using the goal-oriented performance assessment approach is feasible since, in most cases, the products are tangible and countable. Therefore, it is easier to calculate the amount of the actual output against the anticipated one.
Furthermore, under this approach, it is easier for the employees to understand the rationale used for classifying individuals and groups as either successful or underperformers. This not only makes it easier for the workers to make the needed realignment to improve their areas of weakness but also plays a huge role in improving the credibility of the system among the staff. Therefore, this scheme should remain in force since it provides an easier way of evaluating and recognizing the employees' effort in a simplistic manner that the workers easily comprehend.
Performance Feedback Loops
Within the company, there are departmental meetings particularly before shifts that the heads utilize to communicate the findings obtained during earlier shifts. At the gathering, employees are free to air their grievances or ideas concerning a particular area in their undertaking. This is an engagement that I have found very effective in improving the efficiency among the shifts. According to one of the department heads, every day is a learning opportunity where they have to ensure that there is no replication of mistakes. Moreover, he mentioned that this was an intentional decision formulated by the departmental heads and the top-level management with the aim to improve the level of efficiency within the company.
To illustrate, in the context of the fruit-sorting department, these meetings are crucial in making sure that more and more fresh fruits are delivered to the juicer in a more convenient manner. It is at one of the gatherings that one department head informed that the company was advised by an employee to increase the width of the conveyor belt and have one employee on the either side. This idea has highly improved both the speed of sorting and the working conditions of the staff through expanded working area. Furthermore, it is the same meetings where the employees are informed on their mistakes in earlier shifts in case the departmental head notices one. Besides, it is evident that all the departments have one thing in common that is a concurrent daily audit. This provides a platform for self-analysis of each department that results in the feedback for the workers and the company at large.
How It Works
Motivation and Reward Systems
With the performance measurement being target-oriented, the reward system is in the form of bonuses for extra units produced beyond the minimum set. In every department, there is the level of the output designated as a must achieve per shift, and when the employees reach this amount only, no bonuses are assigned as it is included into the workers' monthly payments. However, for every extra unit, for example, an extra crate of sorted fruit, the staff members in that shift are allocated a third of the projected value of the final extra juice produced. The intention of this policy is to ensure that the efficiency is maintained at the highest level possible. Moreover, there is also the overall rewarding system where the best performing department members accompany the top-level management for a get-together with their families. These two systems play a critical role in enhancing both personal and group efficiency, thus, protecting the company from unnecessary operation costs.
It is obvious that Highland Healthy Drinks Company's performance management system is a perfect fit for the enterprise. The level of diversity involved to make sure that performance evaluation is objective and specific to the nature of the department's role provides room for an inclusive approach that does not disadvantage certain employees. Besides, the intentional choice of utilizing the target-oriented approach as a measure of performance has enabled the workers to comprehend its rationale as a phenomenon that has aided in their self-growth. Moreover, the system provides room for the employees to engage with the management, and this has seen the company get constructive feedback from the staff like the idea to improve the conveyor belt. Thus, the system is clearly well suited to continue improving the motivation of the employees as well as guaranteeing the enhanced output for the company.
However, there is clear lack of possible career growth for the workers, and this has led to the organization losing some of them. This, in turn, has resulted in the company constantly being exposed to the additional cost of recruitment. There is, therefore, the need for the management to reconsider the possibilities of both departmental and company based career path where employees who meet the set threshold can advance within the business. Moreover, it is obvious that the attention is channeled more to the quantitative aspect of the production. Thus, one has to expand the scope of the system and integrate the elements that will encourage qualitative aspects in the process.
It is evident that Highland Healthy Drinks Company has a well-detailed performance management scheme that is both employees and company-centric. Furthermore, it is clear that the healthy exchange between the leadership and the workers as provided by the system has provided room for both the staff members and the organization to grow through shared information. Besides, it is apparent that there is the utilization of an employee friendly performance measurement that aims at empowering the workers and not punishing them. However, it is clear that the performance assessment policy leans more towards the quantitative aspect of the production process which means that some improvements need to be done to enhance the qualitative aspect as well. Overall, it is obvious that Highland Healthy Drinks Company management is incisive in ensuring that there are consistent realignments in the performance management system encouraged by the concurrent auditing of all the departments.