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Performance Management System

Name: Syed Muhammad Asim

Student No: TP018321

Assignment title: Individual Assignment

Module code: BM036-3.5-3-Managing People and Performance

Hand in Date: 5th April 2011

Lecturer’s name: Anita Premila Paul

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Performance Management System

Contents
1.0 Introduction................................................................................................................................3

2.0 Performance Management at Procter and Gamble....................................................................3

2.1 Implications of Performance Management System at P&G..................................................4

3.0 Performance Management at Dell computers............................................................................5

3.1 Implication of Performance Management system at Dell......................................................6

4.0 Comparison of Performance Management System at P&G and Dell........................................7

4.1 Similarities.............................................................................................................................7

4.2 Differences.............................................................................................................................7

5.0 Recommendation.......................................................................................................................8

6.0 Conclusion.................................................................................................................................8

7.0 References..................................................................................................................................9

7.1 Books......................................................................................................................................9

7.2 Magazines and Articles..........................................................................................................9

7.3 Websites................................................................................................................................10

Word Count = 2170 words only

Question:
“Critically discuss the extent to which the emergence of performance management system has become
a strategy to managing employee contribution for organizational effectiveness”.

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1.0 Introduction
Performance management is an ongoing communication between the manager & each employee
to clarify job responsibilities and improve performance continuously (Bacal, 1999).

In 1976, the tern performance management had been coined by Beer and Ruh, and its concept
had become one of the most important developments in the field of human resource
management.

Performance management is the strategic and integrated processes that help to deliver as well as
maintain the success of the organization by improving performance of the employees as well as
by developing the abilities and skills of each and every individual in order to create a well-
established team (Armstrong, 2000)

Performance management system importance is vital and crucial for organization success as the
world has revolved much, with the power shifting to the customers as their expectations are
higher than before and getting higher day by day, a competent and motivated workforce is able to
deliver such a performance which will meet the expectation of the customers and make them
loyal to organization which is most important to organization success as the competition in this
era has surpassed that of past.

Moreover for the edge over competitors, Performance Management tools like empowerment, self
evaluation questions, development planning, performance planning, coaching and feedback have
to be used effectively to manage employees and enhance their participation in order for
organization to perform to its maximum potential and achieve the organization goal.

2.0 Performance Management at Procter and Gamble


In Procter & Gamble, in order to maintain the standard of their human resource, the senior vice
president of the HR is responsible in personally overseeing the annual diversity reviews with the
director of the diversity as well as the top management of each and every function and business
units in order to help develop and improve the next generation of their leaders. The
accountability for the diversity is incorporated in the performance reviews that are available in
all of the levels of the organization (Digh, 1998).

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Moreover, the performance review of the employees is based on different factors like the ability
of the employees to respect as well as to work in effective manner with the diverse people (Digh,
1998)

The supervisors are also included in the review, where in it will be based on their ability to
develop people regardless of their sex and age (Digh, 1998). The said strategy or performance
management program is being done in order to make sure that each and every employee is
working according to the standard of the company that will help to improve their performance in
the market. In addition to that, it is also done in order to see the human resource of the company
as a credible function and a highly influential factor or aspect in the company (Gandossy and
Kao, 2004).

Procter & Gamble also has gathered different feedback from the students of the company and
then used the data and information from the said feedbacks in order to make some of the
adjustments to the work experience program based on the suggestions of the students. The
program gave benefits to both the company as well as the individual it is due to the fact that
during the said program the company had been able to assess if an individual is a good fit for the
company. On the other hand, the student gains first-hand information experience that will help
them to improve and develop their skills (National Council for Work Experience 2008)

Salaries at P&G are certainly very competitive and employee can expect to be rewarded highly if
his or her performance is good. Later evolutions of employee compensation and career will be
dependent on regular appraisals: P&G "Growing from within" philosophy ensures that your
career will develop in the direction that suits you best, based on your performance alone.
(PGcareers, 2011)

2.1 Implications of Performance Management System at P&G


Having such an appealing performance management is one of the strengths of P&G, which sets
them apart from their competitors; having such a performance management system shows that
P&G is Valuing People- This is about appreciating the efforts and contribution of employees and
giving them due recognition. It’s about understanding the importance of employees in the
company’s success. In such a industry of Fast Moving Consumer Goods, valuing the employees
work and working towards their career development ensures employees dedication and loyalty

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towards company, this furthermore leads to Involving People- P&G has a balanced Performance
management scheme which believes in collaboration between employees and employers to
ensure both sides work together in unison; proper co-operation and co-ordination between the
management and employees. It believes in empowering people, giving importance to their
opinion and suggestions, and a participative decision making process. This can only happen if
the organization’s culture is benevolent and people oriented which helps them achieve
organizational goals, hence Performance management system can be looked upon as an effective
strategy to achieve company mission and vision. Furthermore, performance management system
at P&G ensures smooth relations between employee and employers, leading to employees being
more efficient at workplace and able to work up to their potential. Impact of the performance
management process of Procter & Gamble has helped them to create good working environment
and ambience.

3.0 Performance Management at Dell computers


Dell’s continued success relies on teamwork and the opportunity each employee has to learn and
excel. Dell winning culture mandates that Dell invest in people, value learning and remain
endlessly curious. Dell is committed to being a meritocracy and to developing, retaining and
attracting the best people, reflective of our marketplace. (Dell 2011)

Dell’s performance management system links individual goals with organizational performance.
The system helps identify the next generation of Dell leaders and elevate the performance of all
Dell employees. (Dell 2011)

The performance management process requires annual formal reviews, the calibration of talent
and allocation of performance rewards and promotions — all decisions in line with being a
meritocracy. Throughout the year, managers provide employees with ongoing feedback,
coaching, training and on-the-job development. Employees and managers mutually create the
employee-development plans. (Dell 2011)

This entire process aligns individual-performance objectives and career-development planning


with business and company goals and results. This plan evolves over time, adjusting to internal
and external changes. (Dell 2011)

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Dell creates learning experiences that draw from multiple approaches and styles. We value on-
the-job experience and assignments, and we also offer networking, coaching, mentoring and
formal learning programs. Dell offer tuition reimbursement for employees and scholarship
opportunities for the children of Dell’s U.S. employees. (Dell 2011)

3.1 Implication of Performance Management system at Dell


Having such an effective performance management system has allowed Dell to experience huge
market share and gain employee loyalty, which is crucial for their success in today’s world, and
even to prosper in future and enjoy the market leader position by realizing in what ways and how
employee can contribute to organizational goal and then giving them roles as per their
qualifications. Dell Performance Management System revolves around Developing People- This
is the most crucial part of performance management at Dell. Performance appraisal is used to
highlight the strengths and weaknesses of an individual so that a proper personal development
plan can be prepared for an employee. Hence nurturing and developing talent within the
organization. However it’s more than just development of individuals through training. It’s a well
thought out plan for knowledge management and organizational learning to improve the
competitiveness of the entire workforce is what separates the great companies from their
competitors and that’s why Dell has been so successful over the years, having continuous
learning environment in organization has enabled every individual to develop and their goals are
designed to meet the organizations overall goal hence Performance Management System at Dell
is able to boost the employee performance to meet the overall organizational goal. Senge, et al.
1999) remarks: “The rate at which organizations learn may become the only sustainable source
of competitive advantage.” The only way to stay competitive is to be better than the rest through
continuous improvement, innovation & creativity which is incorporated in Performance
Management System at Dell. Benefits which Dell provides to their employees is exceptionally
appealing and motivating, such as giving scholarship opportunities to the children of Dell
employees at U.S. overall such a strong yet effective Performance Management System has
contributed most to the winning culture of Dell.

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4.0 Comparison of Performance Management System at P&G and Dell


Due to the difference in nature of the industries many practices are different yet the overall
objective is same and the getting the desired results the input of Performance Management
System is similar.

4.1 Similarities
Enhancing the ability of the employees to work efficiently and effectively to meet the
organizational goal, where by developing the employee skills and giving appropriate training for
it, Involvement of people at the both the organizations have been constant and very well
managed, through which the employees can excel their performance and achieve their individual
goals and at the same time are able to achieve the overall organizational goals, rewarding the
employees and recognizing their work through giving them rewards and benefits has been the
norms of both the organizations, which has enabled them to have the motivated and dedicated
workforce. Dell and P&G have been able to successfully use most of the tools of Performance
Management System effectively like development planning, performance planning, giving
feedbacks to employees and coaching. Both the organizations have been successful in using the
performance management system as a strategy for managing employee contribution towards
organizational success.

4.2 Differences
Whereas Dell focus on linking individual goal to the organizational goal, P&G has focused more
on the organizational goal being given more priority then the individual goal, at P&G
Performance Management System is used more as a strategy to make sure employee is working
as per standard of company in order to improve P&G performance in the market place, whereas
Dell employees and managers mutually create employee development plan. P&G benefits are
much more focused on performance, the better an employee perform the more rewards and
benefits he or she would receive whereas Dell Performance Management System has looked
more into employee career development and employee skills development compared to having
standardized regulations for employees to follow in order to feel satisfied and motivated.

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5.0 Recommendation
P&G and Dell should have even more Specific, Measurable, Attainable, Realistic and Timely
Goals for employee, generous but at the same time being professional at evaluating employee
performance, recommending highly competitive compensation plans, managing employee
trainings and development and promoting right employees to critical positions. P&G should look
more towards the approach of mutual concerns, and focusing just on Performance alone is to
rigid a criteria for giving rewards to employee could make it more lenient by giving employee
targets which if 80% met also are accountable for certain benefits just to keep their motivation
high, else the employee will only be focused on performing and the quality of work might be
affected. P&G and Dell both should be engaged in the process of 360 degree appraisal systems
which is a systematic collection and feedback performance data on an individual or group, well
the main benefit that would be derived from a 360 degree appraisal system would be a clear way
designed to promote understanding between employee and employer in a more authentic and
appealing way. Energizing the involvement of employees in decision making by making their
feedback countable, usage of technology employee could have live chats with C.E.O perhaps and
send his suggestion on how to improve a certain thing and make it more profitable, this would
feel employee that his performance is recognized in organization he would feel trusted yet
motivated and would give his maximum to show his loyalty towards organization making it more
successful and prosperous. P&G and Dell should also be concerned about managing bottom
performers, preparing robust 30 to 90 days performance improvement plan including specific
and measurable actions with clear timelines along with guiding principles on how to improve
performance a strict yet helpful close supervision within this period of time by supervisors would
be highly influential and beneficial for the growth of employee.

6.0 Conclusion
P&G and Dell both are renowned companies in today’s world in their respective industries and
have gained much popularity over the years for the quality goods and services they offer.
Performance Management System at both the companies has its advantages and top management
of both the companies are aware that the biggest room in this world is the room for improvement
and hence they should work towards improving even further and having more ways to boost

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employee performance, since it’s the employee participation and contribution in the workplace
which leads to greater organizational performance and determines companies success.

On the balance it can be concluded that the emergence of Performance Management System has
been a great help to the organization in getting the best out of their employees to achieve the
greater success for organization and has act more of a blessing for organizations than a curse.

7.0 References
7.1 Books
Armstrong, M., 2000. Performance Management: Key Strategies and Practical
Guidelines, 2nd ed, USA: Kogan page
Bacal, R., 1999, Performance Management, USA: McGraw-Hill Professional
Senge, P., Kleiner, A., Roberts, C., Ross, R., Roth, G. and Smith, B. (1999) The Dance of
Change: The Challenges of Sustaining Momentum in Learning Organizations, New York:
Doubleday

7.2 Magazines and Articles


 Beer, M., Ruh, RA., 1976, Employee growth performance management. Harvard
Business Review, July-august, pp-59-66
 Digh, P., 1998, The Next Challenge: Holding People Accountable, HR Magazine Society
for Human Resources Management, [online] Available at:
www.realwork.com/aricles.asp?filename=holdingpeople.htm [Accessed on 27th March
2011]
 Gandossy, R & Kao, T., 2004, Talent wars: Out of mind, Out of practice, Human
Resource Planning, vol. 27, no 4, pp. 15-23
 National Council for Work Experience 2008, Work Experience, HR Circles, [online]
Available at:
http://www.changeboard.com/hrcircles/blogs/hr_best_peactice/archive/2008/03/13/work-
experience-procter-amp-gamble.aspx [Accessed on 21st March 2011]

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7.3 Websites
a. Dell, 2011. Workforce Commitment. [online] Available at:
http://content.dell.com/us/en/corp/d/corp-comm/cr-diversity-wf-talent-mgmt.aspx
[Accessed on 18th March 2011]
b. Pgcareers, 2011. Benefits at P&G. [online] Available at:
http://www.pgcareers.com/aboutpg/whyjoin/benefits/page/88/default.htm [Accessed on
24th March 2011]

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