Managing the performance of an Organization and its Human Capital is becoming a real challenge to all CEOs and leaders. The new global economy has forced upon a totally new challenge on most organizations: How can we continue to stay profitable and competitive? How can we constantly adapt to the changing market landscape and to strive for continual growth in the “future” business. What used to be good yesterday is just no longer good enough to manage today’s business, let alone effective, to manage business in the future. It is surprising but true, that many business fundamentals of last 10 years are no longer applicable to today’s business environment. As such, driving performance in order to stay ahead of competitions is no longer a question of choice. It is a necessity.
Managing organization performance is perhaps the single most important strategic approach to stay competitive and to ensure continual growth in our business.
It is estimated that most of us achieve less than 1 per cent of our actual potential. It is, therefore, a significant and strategic advantage if management realizes that and starts paying attention on driving organization performance and improving its human capital within its organization, instead of just ‘buying’ external skilled resources to fill the gap.
In fact, in a knowledge-based economy, human resource is now the single, most valuable asset in any organization. Managing human capital has become the number one priority of any organization that wants to be successful in the “New World Order”. A successful organization today, is judged by how well it can manage its human capital to drive its strategic direction. We must, however, recognize the fact that, managing performance is not just an operational issue, neither is it about retaining and/ or motivating employees. It is about the ability to grow the organization and enhance the skills of its employees, in order to meet the expectations of future business. This realization has encouraged many organizations to appreciate the significance of putting their performance management system in place. The question here is, how many of them actually succeed in doing so? There are, in fact, more failures than success.
So, why do many organizations fail in their effort to put their performance management system in place?
However, in many cases, the actual performance rating is still based on the interpretation of the supervisor. At the end of the day, it is a guessing game.
Other factors like the lack of discipline, no check and balance framework and no real data mining capability, need to be addressed as well.
However, by solving the above will only address the operation dimension of managing performance. It is not enough to drive success for our future business.
Many organizations actually realize that having a vision, and understanding the mission of the organization, are not good enough to them to succeed in the future.
Many organizations have tried to incorporate some of the latest performance management tools like the Balance Scorecard (BSC), the KPI and KRA frameworks into their Performance Management System (PMS). Despite using the latest tools, many organizations struggle to implement their Performance Management System successfully; and, too often, they end up with a diluted system that fails to deliver the full benefits of the performance management tools.
It should be clear now to everyone that, using the latest tools to drive performance, does not guarantee success. In fact, most of the time, it does not. Recent research has indicated that 70% of BSC implementations fail to deliver their objectives. The important point is that the right approach and a proper framework are employed for the purpose.
In today’s business environment, managing performance cannot be done in isolation. If an organization is serious about driving performance, it must be clear that taking shortcuts will definitely not work in the long term. It may not even work in the short term! Linking strategic dimension to operation dimension is the key focus. Use it as the governing principle to drive performance.
Learning how to systematically drive organization performance from strategic dimension to operational dimension becomes a critical factor for an organization to compete successfully. Managing performance is no longer just a top management issue; it is about getting the whole organization involved in implementing the strategies, earning to make changes and to adapt to the ever changing market demands. The ability to tie operation outputs to business strategy, the ability to track performance measures at all levels and the ability to cascade performance measures from one level to another, become necessary, to help an organization to successfully execute its business strategy. Ultimately, the goal of any organization is to perform well and achieve its strategic results.
It is recommended that every organization embarks on a Total Organization Performance Management Solution.
Total Organization Performance Management Solution :
The following diagram shows the even outputs established using the
Organization Performance Management Solution Framework.
Below shows a typical execution plan for the implementation
Organization Performance Management Solution.
To implementation a total organization performance management solution is not difficult, but requires patience on the part of the organization and its human capital. A malaise of modern-day society is that many of us lack patience and are prone to taking shortcuts.
However, the biggest challenge in the implementation of performance management is still the lack of knowledge. The problem is that the subject looks simple. It is then strongly recommended that an organization should first go back to the basics of re-educating its employees on the subject of performance management, with its emphasis on practical application (something which is currently lacking in most organizations) before trying to put its performance management processes in place. Do not assume that everyone knows the subject matter. As the saying goes, ‘garbage in, garbage out’. Do not develop measures for the sake of doing it. The objective must be clear: organizations must seriously want to achieve quantum-leap performance.
In conclusion, organizations and performance management fraternity should consider the following questions before embarking on driving a Total Organization Performance Solution: