Multiple Cause Diagram Showing Factors Creating a

High Performance Culture

The main issues that come out as the central drivers of the high performance culture at
Siemens are the setting of team and individual targets, promotion of people excellence, talent
management, and performance management.

High Performance Culture at Setting of team and Desire to create a sense of ownership in the
Siemens individual targets employee’s the business

Company’s preferred basis for creating

business goals

Employees need to know their role in the

organization

Promoting people Focus on achieving a high performance culture

excellence
Supporting employees to become experts in
what they do

The company works towards the creation of a

large global talent pool

Managing talent (people) Focus on the personal growth of all Siemens

employees

Mentorship

Managing talent (talent) Job enrichment

Job enlargement

Rewarding responsibilities

Performance management Honest Performance evaluation

Linking of the organizational strategy to

individual plans

The main issues arising from the diagram reveal the centrality of the company’s operational
philosophy in regards to their employees. In essence, the issues that lead to a high performance
culture at Siemens stem from a central philosophy. This example shows that the philosophical
model chosen by an organization plays a major role in the programs developed by the
organization.

The second set of issues that arise from the diagram is that Siemens promotes measures that
increase employee productivity at a personal level. This is the basis for high performance in the
organization. The best measures that an organization can put in place to measure its
performance must include the measurement of individual performance.

The third element that arises from the diagram is that the organization uses many measures to
promote high performance. It does not limit itself to a single measure. It runs several programs
concurrently that meet the motivational needs and the aspirations of the employees.

Closed-Loop Control Model

Figure 1: Control System for performance analysis

The main components of the control system for performance analysis are system goals, the
inputs, the outputs, the feedback path, and the sensor. The system goals in the context of an
organization include having highly skilled employees. Other goals may be highly motivated
employees or high performing employees. There are two inputs in the performance analysis
system.
Employees are one of the inputs. They are the ones that the system tries to improve. The other
inputs include training programs and mentorship programs. Inputs are the commitments the
organization makes to ensure that the employees have the best environment for personal and
professional development.Figure 1: Control System for performance analysis

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The main output from this system is employees with better skills. It can also be employees with
better attitudes or increased motivation. In a system, all inputs must form part of the outputs.
Information is a special kind of input that may change. In this sense, it is not necessary to
account for all information inputs because it ends up in some other form in the outputs.

The final part of this system is the feedback path. Performance appraisals are the feedback
mechanism that helps the organization to measure the change in the skill level of employees.
Performance appraisals mean all the activities the organization may undertake to measure an
employee’s performance and not just a quarterly meeting.

Organizational Goals and the Role of Goal Unity in Siemens

Organizational goals are high-level aspirations set to guide the development programs of a
business. Organizational goals also refer to the low-level goals within departments and at
personal level set across the business towards the achievement of the organizational goals.
Therefore, organizational goals refer to the sum total of the goals an organization sets to
achieve its objectives.

Goal unity is very vital in organizations. It refers to the ability to align all goals set in the
organization to overarching aims. Goal unity makes the organization function like an organism.
All the efforts that the members of the organization make contribute towards the achievement of
the goals of the organization.

The role of goal unity in an organization is that it enables all the members of the organization to
align their abilities and resources towards the achievement of the main goals of the
organization. This is the basic ingredient in the success of businesses. When an organization
achieves goal unity, it experiences three distinct advantages.
First, it experiences synergy. Synergy is the tendency of people working as a team to achieve
more than the sum total of their individual performance. The achievements that an organization
makes because of goal unity give it a unique advantage in productive terms compared to similar
organizations that have no goal unity. Secondly, goal unity leads to better resource allocation
and prioritization.

An organization with goal unity will receive better returns for a given amount of resource outlay.
Such an organization is also less likely to waste its resources. Thirdly, goal unity is the basis for
the development of certain strategic advantages.

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The possession of goal unity by an organization shows that the organization has a focused
approach to dealing with issues. In this sense, the organization is able to adapt to change. It is
also able to align its resources to take advantage of any opportunities.

In the case of Siemens, the company achieves goal unity by developing its overall goals from
the individual goals of each employee. The elaborate components of the high performance
culture ensure that there are multiple channels of attaining goal unity.

Long Term Impact of Performance Related Pay on Organizational

Effectiveness

Performance related pay refers to financial considerations or special rewards offered to an

employee based on their output. It differs from the normal pay because it arises from the
performance of an employee. Its role is to motivate employees to perform better.

For instance, a sales representative may get performance related pay associated with the
amount of sales. Performance related pay rewards results and not effort. It is possible to find a
correlation between performance and results, yet it is also possible to put much effort in a job
without producing measurable results.

The first advantage of performance related pay is that it insulates the organization from
payments not associated with results. In a sense, it ensures that the organization gets value for
its money. Secondly, it serves to motivate high achievers in the organization.
It shows that an organization values those that bring in the best results. Thirdly, performance
related pay makes sales planning very easy. It is easy for it to know how much money it will
make out of a given business deal since the only costs the organization incurs are costs
associated with successful sales.

The disadvantage of performance related pay is that if an organization relies on performance

alone as the basis of pay, some employees suffer. For instance, a receptionist cannot do
anything to increase the number of people served at the reception. The only way to determine
whether a receptionist qualifies for performance related pay is by taking qualitative
measurements.

Such measurements are very difficult to quantify in monetary terms. The second disadvantage
is that beyond a certain point, money loses its motivational power. Employees look for elements
such as job satisfaction, opportunities to grow, and increasing responsibilities. Failure to
recognize these changing needs make performance pay ineffective.

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The third problem with performance pay is the measurement of performance. In some jobs, it is
very difficult to know how to assign a performance value to the nature of work.

For instance, is there a straightforward way of measuring the performance of a delivery truck
driver? Is it the number of kilometers covered, or is it the hours spent at work? Which of these
two options generates value for the organization, and makes sense to a truck driver?

Performance related pay, unlike scientific management does not require elaborate
measurements. Scientific management gives an organization more work in terms of the
identification of parameters to use in the planning and management of work.

Performance related pay simply finds a parameter that meets the objectives of the organization
and usually leaves the details of the work to the specific employees. This flexibility gives
independent minded employees a very good working environment. It is however very stressful
for employees who would otherwise thrive in a closely controlled environment.
In Siemens, the organization seems to employ scientific management adapted to its needs. The
management philosophy at Siemens is adapted to reduce the impact of scientific management,
when applied in its pure form.

The organization takes great care to ensure that they provide the best environment for
employee to excel in their work. One of the main criticisms against scientific management is that
it tends to ignore the interest of the workers in favor of the interests of the organization.

It looks at employees as machines that produce a uniform output. In reality, each employee is
unique. Siemens recognizes this fundamental weakness of the scientific management system.
The application of scientific management principles in the company adjusts the method to
eliminate its weaknesses. Siemens focuses on the individual strengths and the interests of the
employees.

This ensures that the employees are able to concentrate on what they do best. The
performance management systems at Siemens all aim at the individual worker. Each worker
has a unique performance profile developed by a wide range of performance measures that
constitute the high performance culture at Siemens.

The Role of the Organizational Structure on Effectiveness and

Performance

The Roman Catholic Church (RCC) is an outstanding organization because of the effectiveness
of its organizational structure. The administrative distance between a pope and a local priest is
only four levels. These levels consist of the pope, an archbishop, a bishop, and the parish
priest. The church illustrates that the strength of an organization can be its administrative
structure.

Good structures encourage high performers to take charge of their work because the structures
ensure that these high performers receive all the support they need for their work. Organizations
with good structures also make it easy for information to reach decision makers, and for
decisions to flow to the rest of the members of the organization.

If the RCC adopted a different structure, it would have created bottlenecks in its structure. The
first casualty of a poor organizational structure is communication. Once the communication lines
of an organization clog, the organization loses its capacity to grow. Organizations with poor
structures also tend to lack proper authority and responsibility structures.

As soon as employees realize that they are not answerable for their actions, systems fail.
Similarly, a high performing organization needs clear structures that allow rewards to flow to
employees. Similarly, clear responsibility lines make it easier for the organization to find ways of
motivating demoralized employees.

As an organization, one of the strong points noted in the Siemens organizational structure is
that it promotes individual responsibility while it emphasizes teamwork. Teams in the
organization are not amorphous groups.

They are actually a collection of individuals, each with clear roles and responsibilities, working
towards a joint goal. The company takes great care to ensure that all the employees have a
clear role to play in the organization. The employees answer as individuals but their
performance counts towards the contribution of their teams in achieving organizational goals.

The Role of Organizational Culture

An organization that fails to develop an enduring culture soon loses its identity. An
organization’s culture defines it in many ways. It gives an organization a basis for making
decisions. Culture establishes the working relations within the organization. It is the source of a
unified approach to issues. For instance, there may be changes in policy regarding hiring.

However, the speed with which a hiring decision takes effect may be a factor of organizational
culture. If the culture is such that everyone in the organization communicates rapidly, a hiring
decision will move up and down the leadership ladder on the strength of the organization’s
culture.

This example illustrates the impact of organizational culture to communication. Culture is the
total expression of the values, norms, and processes of an organization. Each organization has
its unique culture. High performing organizations such as Siemens tend to adopt cultural
elements that support the organization’s overall goal rather cultural elements that lead to
wastage.

Siemens’ organizational culture promotes individual development, the establishment of

organizational goals derived from individual targets, and a commitment to the management of
talent in the organization. Each of the activities Siemens promotes in relation to goal setting and
performance reviews aim at developing careers of individual employees.

The organization seeks to ensure that all employees are on track towards their career goals.
The organization is reinforcing a goal setting culture built on strong goal setting practices by the
development of organizational goals derived from individual goals. It is an interesting approach
to planning because in many organizations, plans move from the top levels of management to
the lower levels.
The result of such systems is that the organization fails to take advantage of the innovative
resources available in the lower levels. The final element in the organizational culture of
Siemens is the commitment to the management of culture in the institution.

Organizational culture requires careful management to endure change and to deliver needed
change. Culture can change for the worse if not one keeps an eye on how it is developing.
Siemens uses multiple systems to ensure that all its employees have sufficient drive and
motivation to achieve their best.

Importance of Investing in People for Organizational Effectiveness

The first reason that demonstrates the importance of investing in people for organizational
effectiveness is that investing in people within the organization leads to distinct competitive
advantages for the organization.

An organization that invests in its people ends up with a unique workforce with high job-related
skills. This can give the organization an edge in the marketplace because of its capacity to react
to market forces quickly using its human resource.

The second reason is that investing in people gives an organization the ability to retain its best
people. Talent is one of the main factors defining competition in many organizations today. The
organization with the best talent wins. As such, investing in employees makes them feel valued
and it enables them to decide proactively to remain with the organization for the long haul.

Investing in people leads to organizational growth. As the Siemens case demonstrates,

investing in people gives the organization the required capacity to pursue growth in various
regions. Siemens develops the talent of its employees in a way that insulates the company from
talent shortfalls.

More importantly, investing in people makes Siemens capable of rapid growth whenever
opportunities present themselves. This strategy allows companies with stronger policies
regarding investment in employees to take advantage of new opportunities more effectively, in
comparison to companies that recruit to pursue growth opportunities.

One of the strong positive results of investing in people within an organization is that it makes
the organization a learning organization. When an organization promotes learning, it makes its
growth potential to increase. Investing in people inculcates a learning culture in the organization
that in turn contributes towards a strong learning culture in the organization.
Finally, developing an organization with a strong attitude towards learning puts it on the path to
profitability. Improved profits in an organization result from better execution of strategy.

This is a product of investing in people. Within an organization, it is possible to invest in people

in specific aspects of business performance to encourage people to improve their performance
in the selected areas. In this sense, one of the most effective ways of ensuring an organization
produces the best results is by investing in its people.