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A critical evaluation of performance management and development processes within Otis PLC
to manage performance.
Finally, at the level of artifacts, the organisation appears relatively sophisticated and prosperous. It possesses many of the features of a medium sized PLC, with a headquarters building, a glossy company magazine and the full range of policies, practices and management procedures, including a mission statement which places the customer above all else.
Models of best practice in performance management and development.
The purpose of this part of the assignment is to explain what performance management is and to establish a model against which to compare the practices of Otis PLC. In making my review of the literature on performance management, I have found two closely related issues that are particularly significant to the HRD function. The first is that there is a tension between two aspects of performance management, the desire to measure and control results and the need to develop employees’ capability to achieve results. The second is the significant practical difficulty of establishing meaningful criteria that can both evaluate development needs and measure performance. I will explore these issues more fully below.
Establishing a definition of performance management.
There are several definitions of performance management available, Armstrong and Baron (1998:50), for example, list eight. Commenting on the definitions, they note that there are frequent references to the need to align individual and organisational objectives but only one reference to development. From my own reading Taylor (1998:166) and Hendry et al (1997) cited by Walton (1999:199) both stress the systemic nature of the process while Harrison (1997) citing Lockett (1992:14) (who is included in Armstrong and Baron’s review) emphasises the link to organisational strategy.
The definition that I find most useful is by Armstrong and Baron (1998:7)
“a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”
They put particular emphasis on four parts of their definition, Firstly the strategic nature of the process, i.e. its alignment with the strategy of he organisation and its ability to respond to changes in that strategy. Secondly, they emphasise the degree of integration both with other functions, with the organisation’s HRM process and, ideally, with the needs of individual employees. Thirdly, they stress its concern with performance improvement and finally they identify its concern with development, which they state is “perhaps the most important function of performance management.”
Inherent tensions in performance management systems.
Armstrong and Baron include both improvement of current performance and development of the individual within their definition. Other writers have also identified this dual role but express concern about potential tensions between the two aspects.
Although writing specifically about appraisal processes, McGregor (1957) cited by Newton and Findlay (1996:129) identified the tensions that are inherent in performance management.
“The modern emphasis on the manager as a leader who strives to help his subordinates achieve both his own and the company’s objectives is hardly consistent with the judicial role demanded by most [next page]