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Performance Management System

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Introduction

Every company's success depends heavily on the performance of its employees. An

organization's employees need to be both qualified and motivated if it expects them to
provide great work. It's easy to see that Omega Inc.'s management, evaluation, and
reward system falls short when looking at the company's franchisee-based workforce.
To fix the problem, the company must convince its franchised dealers to adopt a new
performance management system. It is the purpose of this study to investigate and
analyse aspects of the performance management approach used by franchised
organisations, as well as its benefits and drawbacks. Omega will then implement a
reward and performance management system to help it provide better customer
service and boost sales (Armstrong, 2017).

Performance Management Process

A brief history of performance management is necessary in order to grasp the most

important aspects of the process. HR is encouraged by contemporary performance
management models to reject the yearly appraisal tradition in favour of a system that
is more adaptable and adapted to the company's goals rather than the traditional
annual appraisal (Schleicher et al., 2018). Armstrong (2017) defines performance
management as a "continual process of increasing performance". Individual and team
goals aligned with the organization's strategic goals can be attained if employees and
the corporation construct performance plans to meet them, says the scholar.
Furthermore, this philosophy includes a step of progress assessment and a dedication
to the growth of personnel. At least four steps must be taken in order for a company's
needs and the development of its employees' abilities to be met by a performance
management system.

When it comes to the performance management process, there is no one-size-fits-all

solution. Because these actions don't necessarily follow each other sequentially, they
can be depicted in the form of a cycle that displays the major processes (Figure 1). To
begin the process of planning, a corporation must identify its aims and values first..
Employees' expectations will be clearer when they know what the company's aims
are. Employees' motivation and attitude to each task will be based on the company's
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core values. In this preparatory stage, one can also define job descriptions, roles, and
responsibilities.

Figure
1. Performance management cycle.
Planning is the initial step in the process, and it includes all of the goals and
objectives that have been established by supervisors and employees alike. Workers
need to know what is expected of them in order to perform at their highest level. As a
result, SMART ("specific, measurable, attainable, relevant, and time-bound")
objectives should be used by the company. Both the boss and employee can agree on
a precise outcome with this particular tool. Managers are urged to construct personal
development plans for each employee after they have established their goals.
Professional development is one of these, and it's intended to motivate people to grow
professionally, commit to a cause, and improve their performance. This procedure can
be simplified if the organisation provides a well-developed basis from which
personnel can pursue a list of clearly defined goals (Bjerke & Renger, 2017). Planned
activities for the next few months are also produced at this phase because prolonged
preparation periods distort employees' perceptions and obscure imminent business
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needs (Cappelli & Tavis, 2016). Consequently, the team should have a short-term
plan of action and a foundation for assessing the results of their efforts.

Acting is the following step, and it encompasses the majority of the tasks associated
with the job. Employees carry out their responsibilities, meet their objectives, and put
their plans into action. An ongoing process that doesn't halt for planning or
evaluation. As a result, goals must be able to adapt to any changes in the working
process. Even if the goal is met sooner than expected, the employee should be given
more responsibilities in order to keep up. The performance objectives must be
reevaluated if the company notices that staff are not meeting their deadlines.

The third stage – tracking – is implemented to successfully monitor the work process.
Managers and HR professionals must keep track of both the company's overall
success and the individual contributions of their personnel. Physical or digital copies
of all records can greatly aid in keeping track of changes in performance over time
(Bititci et al., 2016). Managers, employees, and consumers can all provide input as
part of the tracking process. Employees in the first group should meet periodically to
discuss their personal and professional goals, as well as potential problems. Workers
can contact the management about difficulties or complaints involving every area of
their job. Finally, input from customers is critical in determining customer
satisfaction, customer service, and error rates.

Coaching and overcoming hurdles are also part of tracking. When employees run
across difficulties, they may get demotivated or lacking in understanding about how
to fix the issue at hand. According to the performance management method, managers
are responsible for providing the resources that would benefit an employee in this
situation. Additionally, the term "coaching" connotes a method to performance
evaluation that is both encouraging and motivating for those being coached. Conflict
and punishment are the wrong way to deal with problems. Employee morale can be
improved by supervisors showing their support and encouragement instead (U.S.
Office of Personnel Management [OPM], n.d.). Managers provide feedback to their
staff, along with ideas for resolving the issue and possibilities for growth.
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Evaluate your progress at this point, based on the information acquired from the
previous stage. A performance review is a continuous examination of one's
achievements and career goals by one's manager (OPM, n.d.). Management must use
both formal and informal reporting to keep track of their employees' progress toward
their professional goals and development plans in this case. To improve, employees
must be aware of both their successes and shortcomings. It's critical to hold regular
meetings to assess progress, identify potential problems, strategize about the future,
and see whether any of the previously agreed-upon tasks need to be adjusted. Finally,
it is essential to recognise and reward employees for their accomplishments and
growth.

Performance Management Process at Omega

Analysis

It's clear from the Omega, Inc. case study that putting in place a performance
management system is a long-term endeavour that necessitates more focus on
identifying and addressing problems. To begin, the franchise owners finished the pre-
planning stage by adopting a goal statement—to deliver high-quality customer service
—and creating job descriptions for sales reps. The findings were based on an
investigation into Omega's operations and the role of employees in their companies. If
their actions are compared to those detailed in the study, it may be argued that the
company's initial moves were sufficient for the development of the cycle.

Following that, franchise owners took steps to tailor their strategy to each employee's
output. All employees were made aware of the mission statement, and the firm's
leadership explained the role each employee had in helping the company achieve its
goals. To be clear, the focus of this conversation was on the interaction between sales
reps and customers, a component of service that is less easily measurable than sales
figures. This must be emphasised. Next, franchisers allegedly devised sales quota-
based personalised performance goals for each employee. Although goal-setting is in
line with the performance management approach, it's not apparent if these objectives
followed the SMART methodology. However, monthly sales objectives may be
measured and their achievement can only be recognised if customer service is taken
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into account as well. In addition, no information concerning sales quotas was included
in the goals of employees, which would have made the process more open.

Omega's training has both advantages and disadvantages when it comes to this
activity. On the one hand, the programme was designed to help employees improve
their knowledge and abilities, which is an essential part of professional development.
There was a wide range of educational and professional backgrounds represented in
this particular case. As a result, it isn't clear to what extent the training had an impact.
The training course feedback is not sufficient to determine whether staff are
appropriately equipped to provide service. Documentation is often lacking, raising the
possibility that workers aren't responding to education.

The case did not disclose any information on the sales reps' records of attaining their
goals. Next, we'll be tracking to see if there are any issues here. For their performance
management procedure, managers did not gather any data or record any information.
There were no written records, either on paper or digitally. Employees were left
confused and misinformed as a result of the feedback relying solely on sales numbers,
which painted an incomplete picture. There was no tracking in franchisees because of
the lack of regular reciprocal feedback and progress assessment. Employees, for
example, had no idea if they were meeting their quotas. Demoralizing employees and
lowering their commitment to high-quality performance were discovered to be the
result of this lack of information (DeNisi & Murphy, 2017). They also had no idea
how their salary was linked to their work. The failure of franchise owners to support
openness as a pillar of feedback in performance management is a shame.

Finally, franchise managers lacked the means to evaluate the accomplishments of

their workers and adequately reward them. Performance evaluation was done in a
non-formal manner which made it more susceptible to racial bias. Because employees
didn't know how well they were doing, each review was a surprise that didn't motivate
or inform them in a meaningful way. Mistakes and poor customer service were also a
result of the absence of feedback. Because of these difficulties, it's safe to suppose
that franchise owners were unable to talk to their employees about the company's
long-term goals and the specific ways in which each employee could enhance their
performance.
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Recommended Rewarding System

The scenario at Omega demonstrates that Omega personnel are not prioritising
customer service quality as they battle to fulfil sales goals. Because of this, the
incentive programme must emphasise the relationship between the customer and the
salesperson, as well as sales-related accomplishments. Total compensation systems
involve both financial and non-monetary forms of appreciation for its employees.
Franchisees could start by polling their personnel to establish their reward schemes.
Employees may have distinct requirements and opinions about how to motivate them.
This knowledge is critical since it will not have a long-term positive influence on
performance if it is given in the form of unwelcome rewards. The next step is for the
companies to identify SMART objectives that are closely tied to the mission in order
to decide the most appropriate bonuses to offer. To provide an incentive that rewards
effort without creating an extremely competitive environment, the approach
recommended in this example incorporates these strategies.

The work-life balance of people has a significant impact on their productivity

(McCoy, 2017). As a result, the quality of customer service provided by franchise
owners can be improved by fostering a positive work environment. When it comes to
reducing stress among employees, things like child care, health and wellness services,
and sick leave are all examples. As a result, employees can focus on their work
without being distracted by concerns about their personal lives. In addition, workers
are more likely to stay with the organisation and provide excellent service if they
receive excellent customer service (Armstrong, 2017). Peer empowerment awards,
which allow employees to nominate each other for a certain benefit, can be used to
build trust among personnel. This choice promotes communication and cooperation
among employees, as well as the preservation of a friendly and competitive work
atmosphere.

Customer service and sales-related data should be used as the basis for monetary
incentives. Customer surveys and quality indices will be used to measure the
customer experience, and the findings will be updated and displayed to staff so they
can see how well they are meeting their objectives. Each employee must be able to
see their results in real time in order to receive feedback and make adjustments to
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their goals. These metrics should be used to determine compensation and bonuses,
and employees that go above and above should be rewarded for their efforts. When an
employee's name is mentioned in a survey, for example, the prize should be given to
that person in some way. To avoid a split between the best employees and the rest of
the team, it is important to support and promote all personnel (McCoy, 2017).

Recommended Performance Management System

It is necessary for franchise owners to change their policies and implement new
tracking and review methods in light of the cycle indicated above. When it comes to
setting goals for each employee, companies should first analyse their recent
achievements. Despite the fact that some goals can encompass sales quotas, the focus
should always be on the client. As a second step, franchisees should gather
information about their employees' educational and professional backgrounds. In
addition, they need to learn about the current issues and the incentives that employees
would like to see put in place.

Due to the ineffectiveness of the current methods, it is imperative that the tracking
stage be updated significantly. Managers need an official system of records to keep
track of feedback, performance, consumer surveys, and company objectives. All
managers, regardless of when a performance evaluation will take place, should keep
an eye on their workers at all times (Schleicher et al., 2018). Data about an
individual's progress toward goals, possible rewards, and difficulties and solutions in
the past should be available to that individual.

In this case, it's critical to figure out how to keep track of everything. In the present
day and age, there are numerous digital solutions to this problem, and the franchise
network is actively pushed to make use of performance management software among
them. To ensure that all data is collected and stored in a single location, this solution
will also give data visualisations. A visual strategy has a favourable impact on
performance management and employee engagement, according to Bititci and
colleagues (2016). An added benefit of this strategy is that it increases commitment,
makes incentive system evaluations simpler, and enhances communications.
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Every month or biweekly, managers will meet with their staff to review their progress
and analyse their development and goals, as well as any further input. Franchise
managers can use this activity to fine-tune short-term goals and catch problems in the
bud. When managers give their employees feedback, they should not be startled by it.
These conversations must include discussions about how to get over any roadblocks.
Input should be constructive rather than aimed at punishing or critiquing excessively.
In this case, coaching is essential since employees will experience issues that can limit
their productivity and motivation (OPM, n.d.). Improved performance and
advancement opportunities for high-performing personnel should be prioritised before
remediation. It should be easier to introduce the last stage as a result of the application
of these strategies.

Finally, the process of reviewing and awarding performance will be based on the
information acquired and processed, as well as the defined methods for evaluation.
More formal and less frequent than feedback talks, meetings to discuss
accomplishments are organised. Having them more regularly could lead to unfair
judgments, thus they might only be done once or twice a year, for example No new
information should be shared with employees by their managers; feedback should be
consistent throughout the year. Because of the frequency with which minor errors and
issues will be brought to light, it is projected that they will pay more attention to
measures to improve performance. They can recommend formal and informal
training, assign new responsibilities, and assess if a transfer is necessary in order to
identify learning opportunities. The franchisers' final step is to reward their personnel,
as we discussed in the prior portion of this paper.

Conclusion

An effective performance management method can have a considerable impact on the

way employees operate, resulting in a better achievement of business goals. The cycle
contains a data collection component, as well as four stages: planning, acting,
tracking, and reviewing. The initial few steps of Omega's franchise owners were
largely unsuccessful, but they were able to gather information and define the
company's mission and personal aspirations. However, they failed to evaluate
progress and provide meaningful feedback to workers, which resulted in uncertainty
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and a lack of desire. Customer satisfaction surveys and sales quotas are included into
a potential incentive scheme for sales staff. In order to foster an atmosphere of
cooperation among workers, it is recommended that work/life balance be
implemented together with rewards such as praise, recognition, and monetary
incentives. Transparent feedback, frequent meetings, development opportunities and
consistent rewards are all part of the suggested process management method
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References

Armstrong, M. (2017). Armstrong’s handbook of performance management: An

evidence-based guide to delivering high performance (6th ed.). KoganPage.

Bititci, U., Cocca, P., & Ates, A. (2016). Impact of visual performance management
systems on the performance management practices of organisations. International
Journal of Production Research, 54(6), 1571-1593.

Bjerke, M. B., & Renger, R. (2017). Being smart about writing SMART objectives.
Evaluation and Program Planning, 61, 125-127.

Cappelli, P., & Tavis, A. (2016). The performance management revolution. Harvard
Business Review, 94(10), 58-67.

DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance

management: 100 years of progress? Journal of Applied Psychology, 102(3), 421-433.

McCoy, R. (2017). The relationship of employee reward systems and motivation

levels with special emphasis on franchising. LIGS University. Web.