BUSN11080 Managing Organisational Health Assignment Sample 2024
Organization and its Performance management
As a strategic practice, evaluating performance, responding, and improving are together called an act of measuring performance (Elena and Maria, 2016). Measures should be aligned around them to make everything more valuable and constructive. This method is explicitly concerned with measuring performance, as the name itself implies.
This method applies by putting specific metrics in the right places enabling the organizations to track their progress toward their objectives. Through these metrics, the organizations, individuals, or groups help determine whether they succeed in achieving and accomplishing their objectives and goals.
Furthermore, the performance measures provide valuable information that is considered to be very informative and helpful. As a result of this, valuable reports can be created around the information, which can be shared with the stakeholders of the organizations for development and growth (Hasan and Chyi, 2017).
Similarly, other projects or programs can also be measured with the help of performance indicators which provide an opportunity for improvement through learning from successes or failures. Noting the same, the present essay focuses widely upon the concept of organizational performance management, its indicators, frameworks, and advantages and disadvantages of various measures of organizational performance.
Frameworks of performance management
To provide a consistent approach to collecting, reporting, and analyzing performance information, the organizations develop the Performance Measurement Framework for assessing, utilizing, and reporting the performance of an organization (Singh et. al. 2016).
By analyzing the level of achievement of results of organization programs and activities, this framework enhances the management of the organization. Measurements of performance are most commonly done through the Balanced Scorecard and Key Performance Indicators. In order to make better decisions and make better choices about their programs and activities, managers use this tool at their disposal.
Key performance indicators (KPI)
Management receives information about the performance of the organization with the help of the Key Performance Indicators (KPIs). The KPIs stand as an essential parameter and give the managers an overview of how the company is performing in the relevant market. When KPIs are adopted by an organization, certain key components can be identified, measured, and interpreted efficiently.
The KPI has a long history, dating back to the third century under the Chinese Wei Dynasty, but it is unknown exactly where it originated (Kerzner, 2017). Also, they are considered the best measure of performance in the public sector. At the time of their establishment, they were widely used in the private sector.
Often, it can be observed that the use of KPIs is to measure two things: (1) How well and efficiently the delivery services are made to the customers and how long work takes for a project to be completed (2) Analyzing customer satisfaction.
Balance Scorecard
On the other hand, the Balanced Scorecard is a framework or procedure that combines financial and non-financial aspects under control. The balanced scorecard aims to measure the organization’s performance and enhance the business’s effectiveness (Awadallah and Allam, 2015).
It also aims to provide feedback over the internal process of the business, which primarily focuses on enhancing any organization’s management efficiency in the relevant aspects in regard to its financial and non-financial control.
Advantages of performance management
Understanding the pros and cons of an organization is essential for tracking and measuring its performance (Almatrooshi et. al. 2016). Thereby, identifying and analyzing the positives and negative aspects of Performance Indicators would prove valuable to the management of an organization. The first advantage is that the programs and operations process is effectively managed.
Managing employees’ performance periodically enables managers to evaluate whether they are on the right track or not (Mone and London, 2018). Short-term KPIs can demonstrate how departments manage their daily deadlines and measure employee performance. Secondly, another advantage is measuring the implementation of goals within an organization.
A continuous PI could assist an organization in monitoring and evaluating its process and performance because, without a dateline or measurement, a goal cannot be successful. An organizational goal could be measured in part by a long-term key performance indicator. Thirdly, individuals have the opportunity to prove themselves.
When a hard-working employee is rewarded for their efforts with a bonus or raise, the employee often gets highly motivated (Massingham et. al. 2019). Managers have an opportunity to track an individual’s performance and reward those who have exceeded expectations. Employees, in turn, can continuously improve their performance as a result. A
lso, another advantage is that there is due assistance concerning the funding of organizations or financial institutions with funding allocation and funding requests. In addition to large corporations, such as start-up companies, budgeting is an integral part of their operations.
In addition, it guides the company in attracting investors that can aid its financial goals and effectively allocate resources to achieve success. Using a balanced scorecard as an example is a good choice since it focuses primarily on the financial side of things.
Strategic plans for the future are also well established. A strategy can only be built based on information gained from PIs. For example, if a hotel company’s CSF (Critical Success Factors) is full occupancy throughout the year, the company’s strategy can be formulated based on this (Azeroual and Theel, 2019). In analyzing occupancy percentages, management gets an opportunity to identify when to expand advertising and discount offers.
PIs allow the organization to strengthen its abilities and increase its performance as it achieves CSFs. PIs can serve as a means of evaluating this strategy. Also, measuring the implementation of goals within an organization is highly efficient. A continuous PI could assist an organization in monitoring and evaluating its process and performance because, without a dateline or measurement, a goal cannot be successful.
An organizational goal could be measured in part by a long-term key performance indicator. Lastly, the facilitation of better communication within organizations is also observed. The likelihood of miscommunication is reduced when accurate PIs are used. Each PI clearly explains all the steps needed to accomplish the organization’s goals, so there is no confusion over what to do.
Disadvantages of performance management
The research, however, has not always shown that performance indicators are the best tool for monitoring and measuring organizational performance (Van Looy and Shafagatova, 2016). This brings in the scope to state a few disadvantages. The first disadvantage that can be reflected is that Cause-and-effect relationships is not completely understood.
The PIs do not provide a complete understanding of cause-and-effect. However, Performance Indicators don’t indicate who is responsible for the observed results, despite showing how well a person performed. Employee turnover scored well in the measurement for the operation department. This measurement, however, fails to capture why employees leave and who should be held accountable.
Also, the quality of work is difficult to track as PIs only display progress levels, and thus tracking the quality of work is incredibly difficult. It ultimately reflects negatively on client loyalty. The organization may lose them as well as weaken the bond with its members.
Furthermore, Time management is difficult and needs to customize in accordance with the organization. Due to the time involved in tailoring PIs to an organization, they have the disadvantage of being difficult to do. There is no single PI that every organization can use; therefore, developing one tailored to the company’s objectives is essential.
To accomplish their company’s goals, managers should take their time to design PIs that are relevant to their business goals (Koesomowidjojo, 2017). It would also take some time to implement, and information would not be available immediately.
On the other hand, the data cannot be adequately analyzed. One of the biggest mistakes PIs make is that the data cannot be analyzed properly to discover meaningful insights about the business. The data has not been examined for comparisons with company benchmarks or industry norms, for changes over time, and for their impact on the business.
Also, Politics in the workplace and demotivating employees is another disadvantage. Because of this, their use has some disadvantages. In addition to the de-motivation of the employees and creating workplace politics, PI abuse is something pervasive.
Although all employees strive to achieve this measurement, one size does not fit all, and not every employee has the skills in the measurement field (Parmenter, 2015). As a result of employees being in competition with each other instead of collaborating, this PI level may cause them to become stressed and create conflicts between them.
Thus, it can be articulated that the last few decades have seen the measurement of performance become an essential aspect of tracking a company’s progress toward attaining its predetermined goals. A common problem for many companies is monitoring and measuring organizational performance. It’s usually possible to find an excellent relative PI to be used, although there is no perfect one.
PI’s can be used in a variety of ways by academic researchers as well as those who use them. Both groups have advantages and disadvantages. The former has a far more significant impact than the latter. Each department must use the most appropriate PI for it to be effective in achieving its goals.
Thus, it can be observed that a good Performance Improvement Plan boosts productivity within an organization and motivates employees. To avoid becoming a burden, PI must be implemented with care to enhance organizational performance monitoring.
References
Almatrooshi, B., Singh, S.K. and Farouk, S., (2016). Determinants of organizational performance: a proposed framework. International Journal of Productivity and Performance Management.
Awadallah, E.A. and Allam, A., (2015). A critique of the balanced scorecard as a performance measurement tool. International Journal of Business and Social Science, 6(7), pp.91-99.
Azeroual, O. and Theel, H., (2019). The effects of using business intelligence systems on excellence management and decision-making process by start-up companies: A case study. arXiv preprint arXiv:1901.10555.
Elena-Iuliana, I. and Maria, C., (2016). ORGANIZATIONAL PERFORMANCE-A CONCEPT THAT SELF-SEEKS TO FIND ITSELF. Annals of’Constantin Brancusi’University of Targu-Jiu. Economy Series, (4).
Hasan, R.U. and Chyi, T.M., (2017). Practical application of Balanced Scorecard-A literature review. Journal of Strategy and Performance Management, 5(3), p.87.
Kerzner, H., (2017). Project management metrics, KPIs, and dashboards: a guide to measuring and monitoring project performance. John Wiley & Sons.
Koesomowidjojo, S.R., (2017). Balance scorecard. Raih Asa Sukses.
Massingham, R., Massingham, P.R. and Dumay, J., (2019). Improving integrated reporting: a new learning and growth perspective for the balanced scorecard. Journal of Intellectual Capital.
Mone, E.M. and London, M., (2018). Employee engagement through effective performance management: A practical guide for managers. Routledge.
Parmenter, D., (2015). Key performance indicators: developing, implementing, and using winning KPIs. John Wiley & Sons.
Singh, S., Darwish, T.K. and Potočnik, K., (2016). Measuring organizational performance: A case for subjective measures. British Journal of Management, 27(1), pp.214-224.
Van Looy, A. and Shafagatova, A., (2016). Business process performance measurement: a structured literature review of indicators, measures and metrics. SpringerPlus, 5(1), pp.1-24
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