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Controlling Performance Part 2 - Coggle Diagram
Controlling Performance Part 2
Wider context of control
Behavioural control
Putting measures in place that will detect mistakes quickly
Encouragin employees to act ethically
Motivating employees to improve
Productivity
Quality
Encouraging employees to adapt best practice
Control mechanisms
Direct
Supervision
by managers
Culture
of the organisation
Target
setting and budgeting
Policies
and guidelines
Organisational Structure
breaking the organisation down into smaller units
Types of organisational control
Bureaucratic control
Control
based on hierarchy, formalised rules,
procedures and standardisation
Reward and punishment
can be used to reinforce this control strategy
Output control
Based on the
measurement of outputs
and the
results achieved
Most appropriate where there is a
need for quantifiable and simple measures
of organisational performance
Personal centralised control
Found in small owner-managed organisations where there is
centralised decision-making by the owner
Clan or Cultural Control
Control requires the
development of employees' strong identification
with management goals
Approach
depends on the common agreement of objectives
and shared cultural values
Trust and Control
Is the belief that
someone is realible and honest
Employees can be depended upon
to act ethically
,
with integrity
and in the b
est interests of the organisation
High level of trust allows management to reduce the level of formal control
Scientific Management
The
use of job, process analysis and time study
to
establish the optimum production methods
and targets as to how long each task should take
Makes workplace much simpler for managers to control
The problem with this Approach is that it
fails to take account
of the
human element
Quality problems
No overall responsibility
Little understanding of people
People aren't always rational;
Motivation problems
Lack of morale; little worker commitment or no interchangeable skills
Process
Objective must be clear
and agreed by both parties
Employee
must be motivated to work hard
and use incentives to achieve objectives
Manager
must be confident that the employee has the knowledge and skills
to undertake the task
Conclusion
Control is a feature of interpersonal influences rather than close and constant supervision
Allowing trust in controls works well for both the company and employees
The
employee work on their own initiative
and
feel valued
, this leads to increased:
Motivation
Productivity
Employee performance Appraisal
About
Involves the regular and systematic review of performance and assessment of potential;
With the aim of producing action programmes to develop both work and individuals
A
performance appriasal system
can bring many benefits to both the
individual
and
organisation
Benefits to
Individuals
Identifies training and development needs
Provides a basis for remuneration
Feedback about performance at work
Benefits to
Organisation
Provides a fair process for reward decisions
Identify and formulate training needs
Assessing competence of employees and identifies areas for improvement
Improves communication
The formal process of performance appraisal
(TARA)
2) Actual results monitored
Manager should
monitor the actual employee performance
and
provide regular feedback
3) Review
A formal appraisal interview
discussing employee's performance
and they've been able to
meet pre-agreed targets
1) Targets
Targets must be set which employees understand and agree to. Employees have to
buy into them
4) Action plan
Agree on new targets that will be set for the coming period
Approaches to performance appraisal
The unstructured Format
Evaluators
use an essay or short
answer to
grade employees
tries to
capture all aspects of employee performance
rather
than being restricted to
the pre-agreed targets used in the more structured approach
Self Rating
Individual rate themselves
on certain agreed criteria
Individuals get the
opportunity to consider their performance
and in some cases
remind management of what they have achieved
in the period
The Ranking System
formal structured approach
which consists of the
individual being assessed
and analysed in terms of:
Tasks
Workflows
objectives
Result achieved
360 Approach
Allows more participation by the individual. The
manager will appraise the individual
, the
individual is also given the chance to appraise the manager
or their colleagues
This
allows individuals to work together
for the good of the department
An effective Performance Appraisal System
Be carried out with serious intent
Relate to the main objectives of organisation
Commitment and support from senior managers
Be clearly understood by all parties
Be applied fairly and consistently
Cost effective to operate
Barriers to effective performance appraisal
Poor performance appraisal interviews can be:
Judgemental
Just a chat
Confrontational
Barriers to effective appraisal may be overcome if:
There's a system of follow up and feedback
Recorded agreement between manager and employee about future training and development
Commitment from all parties involved
Other methods of appraisal such as
Self rating
360 Approach
Reward systems
Intrinsic Rewards
Herzberg's motivators
Arise from the performance of the job itself
being allowed to make higher level decisions
being interested in your job
feeling of satisfaction that comes from doing a job well
Extrinsic Rewards
Herzberg's hygiene factors
These are separate from the job itself and are dependent on the decisions of others
Working Conditions
Benefits
Pay
Rewards systems should be carefully designed in order to ensure that they:
Maintain & improve levels of employee performance
Reward progression and promotion
Sufficient to attract and retain stuff
Control salary costs
Fair and consistent for all employees
Incentive schemes:
Points system
Derived from
scale of improvement made
, such as the
amount of cost reduction achieved
Piecework
Reward related to
pace of work
or
amount of effort
Bonus schemes
A
once-off payment
, awarded to teams or groups that have met or
beaten certain targets
Performance Related Pay
(PRP)
Part of the payments
relate to the performance of the company
Profit Sharing
Such as
Share issues
as part of scheme
Commision
Performance of an individual
and typically paid to salaried staff in sales functions
Performance management and measurement systems
Target setting
well set target setting increases level of
Commitment
AND
motivation
Targets must look at a number of different criteria in order to accurately reflect the employee's performance
Quality of work
Management skills
Knowledge of work
Personal skills
Volume of work produced
In order to measure performance, a target must be set to measure performance against
The target must be viewed as fair, measurable, achievable and controllable
Kaplan and Norton's
The Balanced Scorecard
Provides a framework which can be utilised to
develop a multidimensional set of performance measures
for
strategic control
of the overall organisation
Vision and Strategy
Financial perspective
(Shareholder)
Internal business process
To satisfy customers and shareholders what business processes must we excel at?
Customer perspective
Learning and growing
To achieve our vision, how will we sustain our ability to change and improve?
Main Benefits
Identifying non-financial measures
enables managers to identify problems earlier
Enables
divisions develop successful measures
for their division
Avoids management reliance on
short-termist or incomplete financial measures
Assist stakeholders in evaluating the firm
if measures are communicated externally
Drawbacks
No clear relation
between the balanced scorecard and shareholder analysis
Measures
may give conflicting signals
and confuse management
Does not
provide a single overall view of performance
Involves a
substantial shift in corporate culture
in order to implement it
Drucker's Management by objectives
A type of
control strategy
that
focuses on controlling outputs
Drucker
argues that the nature of the business organisation
requires multiple objectives
to cover every area
where performance and results affect the business
Drucker's key objectives
Market standing
Overall marketing policies and objectives
Productivity
Targets set in terms of output in relation to:
manpower
plant
Material yield
Costs
Innovation
Board must decide whether it intends on
developing technology and products
Follow other companies
To design to meet customer needs
Financial and Physical resources
Financing both working and long-term capital requirements through debt and shares
Profitability
Measures by growth in earnings per share
This objective will need to be translated into targets for control linking sales, profit and capital employed
Managerial performance and development
Policies & objectives covers matters such as:
Training and development
Reward system
Measure of performance
Organisational culture
Organisation and development
Worker performance and attitude
Development of management and worker relationships
Public responsibility
Social responsibility and business ethics
Other techniques to enhance performance
Mentoring
A relationship where o
ne person helps another to improve their
knowledge, work or thinking
Benefits of Mentoring
Financial cost is relatively small
Enhances company image
Encouraging learning helps staff to achieve their full potential and not look for new employment
Faster career progress
Improved motivation
Characteristics of a mentor
Can give practical support and advice
Can give ethical, technical & business guidance
Help with development of interpersonal and work skills
Have no direct reporting responsibility
A good guide or counsellor
A role model
About
relationship not based on authority but genuine wish by the mentor to:
Should be of mutual trust
Share knownledge, advice and experience
Role of a mentor is to:
Encourage and assist junior members of staff to analyse their performance in order to identify their strenghts and weaknesses
Coaching
Focuses on
achieving specific objectives
, usually
within a defined time period
Improving the performance of someone
that is
already competent
, rather than establishing competency