Strategic Performance Management: COSWAY CORPRATION BERHARD
Executive Summary
Human resource management entails two significant systems that ensure an organization’s success in the achievement of its goals and objectives. Thesystems are performance management and appraisal. Performance management is a system that establishes ways through, which an organization improves output through its workforce (Armstrong and Baron 69). The main objective of performance management is to ensure that all employees within an organization and team from different departments work together to achieve organizational goals (Aguinisn.p). Performance management is directly aligned to measuring and improving the value of workplace in the accomplishment of the firm’s strategy.
Performance management systems are the important focus for business entities in the world today. In as much as the whole human resource system within organizations is spread to areas like training, recruitment, and performance appraisal for a period of time, performance management is uninterrupted ongoing processin the everyday running of a business entity (Nielsen n. p). For instance, through performance management systems, training is aimed at expanding an organization’s effectiveness. Effective performance management is a significant tool in ensuring a better business performance in current time and in the future. Therefore, performance management involves the process of identifying, measuring, managing, and developing the performance of human resources in an organization. Generally, an organization uses performance management in establishing how employees are performing and their future potential that will drive the organization to success in achieving its goals and objectives (Daniels 321).Performance management can focus on different segments within an organization, for instance, a department, an employee or the whole organization, and determinethe causes of an underperformance within a business organization or an individual (Swiss 592).
This report is aimed at analyzing the strategic performance management by one of the leading multinational organization, COSWAY CORPRATION BERHARD looking at the history of the organization and background of the performance measurement system An effort has been made to comprehend and evaluate the efficacy of performance management in ensuring the employees output contribute to the organization’s strategic objectives and goals.
Introduction
Cosway Corporation Bhd operates an investment holding firm of a group that deals in distribution, selling and renting of consumer durables. The organization was incorporated in 1979 and its head office is located in Kuala Lumpur, Malaysia. Indisputably, Cosway Corporation Bhd is one of the largest network marketing organizations in subsidiary of Berjaya group. After its founding in 1979, the company acquired Berjaya group in 1994. The organization has provided more than 2000c consumer goods and products across the globe markets. The firm has a huge capital base of about RM 500 million as well as a paid up capital of RM 155 million.
The organization’s core products include health and nutritional complements, cosmetics and perfumes, food and beverage, and home and care among many other services. The group has also exploited the advancement of technology in its operationsand scientific innovations in the global manufacturing and research community. In addition, the organization has maintained a good reputation through the implementation of an effective business as well as market strategy through the five marketing principles: product, price, promotion, physical place, and plan. The organization is aware of the different needs and expectations of the customers that enable them to offer excellent value for their money products and services.
Despite the positive stance the organization has, Cosway Corporation Bhd requires strategic performance management practices to offer a caring, inspiring, and rewarding environment to its members and employees to balance the success equation of its business. This report is a performance management guideaimed at assessing and revealing strategic performance management fundamentals in the light of the many existing challenges and opportunities facing the organization. The objective of this report is to offer an advice to the organization’s utilization of internal strengths in capitalizing on the opportunities and minimizing weaknesses through effective performance management to ensure the organization achieves its intended goals and objectives.
Background of the Performance Measurement System
There are different performance management and appraisal significant stages entailed in the organization. The first stage is job analysis where the management team undertakes a concept of what the job entails for employees before any measure is taken to evaluate their performances in an organization. Therefore, all employees’ functions are in relation to the organization’s mission and objectives. Secondly, the management team has comewith standards as well as assessment or measurement methods for performance. This ensures that all the employees in the organization are accurately assessed to identify their weak and strong points. This is significant in providing assistance where needed in an effective manner. Through identifying areas for improvement among the employees, the workers can also create news skills and techniques, which are vital for the organization’s output.
Additionally, effective performance management of the organization entails elements, such as validity and reliability, acceptability and feasibility that are aligned to the vision and mission of the organization (Blizzard n. p). The next stage in performance management in the organization entails training and chastening or disciplining. Performance management is carried out often to encourage and motivate employees to perform. Regular communication and feedback to the employees is significant in ensuring that they know how they are performing given functions. The last stage is the preparation for and the actual conduct of the formal performance appraisal. This involves reviewing and comparing the employees’ actual performance to the standards at a particular period of time in this stage. Thereafter, performance management and appraisal get to the feedback sessions. During these sessions, the manager or organizational leaders and the employees deliberate on the workers’ performance progress, which is followed by making necessary arrangements for the employees’ development.
Balanced Score card
In the implementation of performance management practices in COSWAY organization, a balanced scorecard is essential. It is a performance management tool, initially developed by Harvard Business school professor Robert Kaplan and David Norton. A balance score card provides a structure for organizational managers or leaders in connecting different types of organizational measurements together. This entails looking at a business organization from four distinct perspectives; internal business perspective, innovation and learning perspective, customers perspective and lastly financial or shareholders perspective. Ideally, the organization overall corporate strategy is used as a monitor whereby managers derive goals that are aligned to each perspective in the balanced scorecard. The scorecard plays a significant role in assisting managers to simplify the organizations visions and translate them to quantified actions that can be easily understood by employees. Furthermore, the balanced score card is an essential in ensuring the organizational managers balance al the concerns of various organizational stakeholders thus improving the general performance of the organization. The balanced score card presents an influential model in the organization running.
The Four Perspectives
Fig 1. Balanced Scorecard
Customer Perspective
This entails viewing the organization from the customer’s point of view through asking a question “How do customer see us?” Because the organization entails more than one line of products, it has endeavored to give the customers the first priority. This enables organizational leaders to change this general goal into specific elements that are very critical to the requirements of customers. For instance, the most significant elements in this case are time, quality, and cost. These are factors that affect the customers’ needs directly with regards to the organizations products. The organization has come up with goals for each of the elements ensuring that products the clients within the correct time, in good quality as well as at an effective price. However, some of these measures are determined through customers evaluation for instance prices and time are highly influenced by the customers.
Internal Business Perspective
These are manager’s internal efforts in ensuring that the specific customer’s goals are met and satisfied. This is achieved through asking the organization asking the question “what must we outclass at?” Significant components that meet customer needs in this phase include aspects of quality and productivity within a time frame. This helps the organization to ensure employees know what is required of them in fulfilling the organizations missions.
Fig 2. COSWAY COSWAY Balanced Scorecard
Innovation and Learning Perspective
This includes all the improvements in the organizations products and services that make it stand the competition heat and maintain customer’s loyalty. Through innovation ad improvement in line with the organizations values and goals, the organization has been able to establish a new value for the products as well as improving operation efficiencies. This has been achieved through continuous asking the question “how can we continue to enhance and create value?”
Financial Perspective
The fundamental aspect in this phase of a balanced scorecard in the organization is through its definition in success. Through asking the question “how do we look at shareholders?” the organization has come up with measures that make it revaluate it strategies with regards to profitability, growth and shareholders value. Through periodic financial statements, the organization has been in position to measure its worth. These statements always ensure organization leaders are able to determine if all transformations are done in the above scorecards are translating into profit or loss.
Features of Performance Measurement
There are four main fundamentals or characteristics/elements entailed in the performance measure applied to the organization in long term. The first feature is valid and reliable performance components, which are crucial components for accurate performance measures. Before the organization starts the performance appraisal process, the performance management tool to be used is ensured be valid and reliable. This is tested by the OUCH analysis to make sure the performance management process is fair and equal to all employees. The OUCH test stands for Objectivity, Uniform in application, Consistent in effect and has job relatedness. These measures are effective and are considered the best in effective performance management.
The second feature of performance management appraisal is acceptability and feasibility. Acceptability implies that the measure being applied in performance management appraisal is practically appropriate to all the concerned parties using it. The evaluation process is also feasible and acceptability by both the employees and managers. Furthermore, the method to be applied in evaluating employee’s performance is applicable to them as well as be feasible to the managers of the organization as well. For instance, if the performance and evaluation form to be filled is two or three pages long, it covers or entails the major aspects that the job is being evaluated upon within the working environment. This implies that both employees and organizational leaders or managers are in agreement by truly reflecting on the elements on the job that are being evaluated to ensure the success of the organization in attaining its goals effectively. Therefore, agreeing on those terms will guarantees that the tool being used is acceptable and feasible.
Another significant feature of performance measures in the organization is specificity. This guarantees a requirement for evaluation details in making sure that the whole process is going on as needed without any interferences that might affect the overall outcome. Specifically, it implies that the process is clearly identified or defined early enough to the concerned parties and all the issues involved. Furthermore, specific also entails that the information provides efficient information for the employees to realize the level of performance that can be attained through a well-articulated job function in performance appraisal in the organization. Organizational leaders and managers utilize performance management systems to enhance the performance of workers by establishing specific measures. Therefore, this means that employees know what they are doing correctly and what they are not. Most often, evaluation systems tend to alter workers’ conducts to become too general; a reason that is meant to mean that the organization used to evaluate a large number of divergent jobs.
The organization also base on the mission and the objectives of the company in establishing performance management system. These systems lead the company to the attainment of its goals and objectives. This process also acts as guidance to all the employees to achieve the firm’s mission and goals over time. The managerial team or organizational leaders therefore make sure that this links enables the organization to affirm the employee conducts to attain the set goals and point out the areas the workers are actively engaged in. Otherwise, there is a concern about the workers because at time they take actions, which may end up harming the progression of the organization unintentionally.
Performance management has several significances in the organization. First, performance appraisal for the organization creates a formal communication avenue between the organizational leadership and management, and the employees on the best strategies the employees can increase the output. In the conformity of this two-way communication, the organization is well placed to counter any risks or problems that are related to performance. Moreover, employees are also provided with an effective opportunity to know what is required of them and when it is required. This form of communication also allows managers to personally communicate to the employees, providing them with information on how they should perform their functions (London n. p).
Behind the scenes of this process, employees are also capable of talking about their concern factors that are inhibiting their ability to effectively carry out their duties efficiently. Performance management processes are also significant in establishing a number of factors that the organization’s management may not be familiar with, for instance, lack of training, poor maintained working equipment, lack of necessary machinery for production, and existing conflict within different employee work groups among many more others that are not easily detected. Performance management systems, thus, create avenues through which these elements are brought to light through direct communication of employee and organizational managers in correcting the problems.
Besides, performance management systems are significant in the decision making of the organization. One of the objectives of performance management is to enable organizational leaders to make decisions for employees. However, the organizational leaders and managers will make decisions based on the information acquired from the performance management systems like appraisals. In addition, it is important for managers to have accurate information about employees and the organization to make informed decisions that will steer the organization to increase output. Using this information, leaders make evaluations on decisions with regards to the employees’ issues like salary increases, promotions, demotions,
and many others (Bento and Ferreira 51). This will allow the managers to make decision that will enhance the organizational productivity and have accurate information about each specific employee.
Performance management fundamentals are also important in motivating employees in their functions both personally and in group (Kressler n. p). This will be significant for the organizational productivity as well as personal growth and development. The decisions that the organization makes in the process of performance management not only enrich the company but also benefit the individual employees. For example, an employee who has problems with operating and maintaining a given machine is affected at personal level and also affects the organization output. If a performance decision is made to train the employee on how to use the machine, it will boost the morale and knowhow of the employee and increase the productivity of the company.
Performance management systems for the organization will also be beneficial in HRM future prediction of the performance of job applicants. For example, the system allows the organization to determine the character and behavior of the best performing and worst performing employees in executing given functions. These data or information is crucial in evaluating new job applicants, thus, determining the standards in getting the best employees in the work force (Pulakos n. p). The performance management is also important in specific organization sectors, such as the communication, decision making, motivational provision, and selection ad recruitment. The organization should come up with well-defined performance management systems to ensure it attains its goals and objectives effectively.
One of the greatest advantages of performance management is goal orientation. The organization will have the capacity to utilize performance management as a guide to the working force or employees and managerial staff to offer a smooth lane towards the achievement of organizational goals and objectives. This is because both the employees and the employer will fully understand and offer support to the rational expectations through the creation of performance management process by the organizational leaders and accepted by the employees. Due to this effect, everyone within the organization is able to do away with any hindrance that might be affecting his work within the working environment and towards achieving a common goal.
In addition, this vision of the organization is beneficial in enlightening the employees about their input to the company with an aim of increasing their productivity in the work place through motivation. With regards to the SWOT analysis of COSWAY organization, the organization has established clear, quantifiable, time specific,and challenging but all attainable objectives of the organization. For instance, the aim or objective of the organization does not depend on a single entity product or services. Therefore, the organization is able beat other competing firms effectively in terms of gaining more sales and profits as a result of the numerous daily products and services in the line of human lives needs.
Outcomes
Performance management is goal oriented whereby the organization can use it as a guide to the employees as well as the managing team in attaining the organizational goals and objectives. Employees and employers are able to establish and support reasonable expectations through performance management systems. All the working hindrances within the organization are done away with. According to the SWOT analysis of COSWAY organization, one can easily predict or tell if the company has established clear, measurable, timely, and feasible objectives. For instance, the organizational goal is not to rely on a single line of products. In this regards, the organization is in a good position to beat all the other competing firms.
Performance management is responsible for enhancing the stability of employees’ remuneration and rewards. This is because an efficient performance management system will ensure that workers’ rewards are equally distributed. In this regard, COSWAY Company needs to come up with effective rewards for each employees and the best way to improve the equally. Consequently, all the organizational employees will be carried over by the system that will lead to satisfaction. This is because an effective performance management system does not entail any form of favoritism and all workers enjoy an equal working environment, thereby motivating them to work efficiently.
Performance management is important in providing a target for the employee’s performance. Therefore, the managing team can come up with standardized measurement scale to measure productivity level of employees and analyze their productivity with regards to the targets set. In the event that COSWAY compares the workers out put in relation to these benchmarks, it acts as a motivation factor in achieving the target levels.
Moreover, through performance management, organizations are well positioned to unfold various predicaments within the company (Zaffron and Dave Loga n. p). First, organizational leaders are in a good position to address a given problem to avoid its spread to the whole organization, thereby leading to a smooth running and functioning. With regards to COSWAY organization, performance management will assist in pointing out problems that will affect the organization in the future. After an analysis is conducted, several mechanisms are put in place to offer solutions to the impending problems identified.
However, performance management has vicious implications on the internal structure of the organization the first one being cost and time effective. This is so because organizations require massive administrative work and time in establishing effective performance management. For instance, an organization needs to carry out extensive training, reequipping, and career growth workshops for each employee or group to match the required levels of standards. This implies that the process is also costly to the human resource departments as well as the finance. With regards to the benefits identified in this report, and the problems that COSWAY is bound to face, especially in the dynamic changing world, the organization needs to utilize the opportunity by spending money and time to undertake this process that will be beneficial to the organization.
Another implication that the management process will have on the organization is the springing up of internal competitions. This is because employees will tend to compete with each other to attain the highest level of evaluation. This competition is indirect but it will have an impact on the workplace culture of the organization (Raef et al 42). This case also applies to COSWAY Company. Different employees, for instance, sales person, will tend to attain a higher evaluation by competing with the same level employees to achieve a high level job status, position, and remuneration. The only disparity in this aspect is that it can create division or split between employees who will consider themselves as winners and others losers.
Moreover, through performance management, there is creation of what is referred to as a bureaucratic organization structure whereby COSWAY organization will no longer be interested in outsourcing new employees. This is because the organization will concentrate on training the existing employees to be more productive through performance management. Another aspect that will impact the organizational employees as a result of performance is constrained or limited innovation. Essentially, employees are required to carry out their functions within a laid down framework for a particular period of time. This will automatically hinder employees from carrying out other innovations and new idea projects. For instance, if COSWAY comes up with a system that restarts sellers on online communication to clients, this will have a negative implication for the employees who would have rather done it in a better way through face to face communication.
Recommendation
Performance management is a structured approach by an organization in establishing goals and objectives and the channels in which they can be arrived at. There are several impacts that COSWAY organization can realize in its integration of performance management in the achievement of its goals and objectives. For the organization to reach these objectives, there are several recommendations that the organization needs to put in place with regards to issues of performance management.
As indicated in the report, one of the major outcomes of performance management is goal ordination that acts as a guide to all employees towards the attainment of organizational goals. COSWAY organization has put in place clear goals that do not depend on one product line or services. In as much as the goals are clear and easily understood by everyone, they need to be changed. For the organization to be more effective, COSWAY should endeavor to create a new anticipation or expectation. This can be done through the organization analysis of previous goals achievement and set new objectives that will ensure that all employees take part. This will ensure that all the workers have a clear understanding of the new goal and work effectively in attaining it.
With regards to the positive outcomes of performance management, it can act as a significant benchmark on the performance of employees. This is an effective methodology for setting the basic performance yardstick with an intention of enhancing positive competitiveness among employees. In as much as the employees will be working on the same standard, their outcomes cannot be equal because of different capabilities they have. However, this system will also have a negative impact on the employees’ creativity. This is because they will have a limited standard on performance that they will focus on. COSWAY needs to incorporate this element. However, to ensure effectives, the organization should from time to time alter the level standards. This will inhibit the employees from being limited to the same level of performance and same line of creativity to ensure that they are open and dynamic in their productivity. COWAY Company can also establish other mechanisms like a compensation for the employees who may come up with a different idea regarding the attainment of the organizational goals that will have a positive impact of the employees’ creativity and productivity.
As the organization enjoys the positive outcomes of performance management, there are some negative impacts attached. The most imminent outcomes that the organization is bound to encounter entail the high cost incurred as well as time consuming factor. This will impact COSWAY organization because of several training programs and other career development strategies that ensure maximum productivity as well as effectiveness. Therefore, I would recommend that COSWAY managerial leaders should opt to reduce the fee by providing the programs at a minimal expenditure but in an effective way to help the employees become more advanced in their skills and knowledge. For instance, this process can be done through online courses and trainings that are time and cost conscious. Furthermore, COSWAY organization can also opt for in-house training that is also effective in reducing costs and saving time. This training is also effective since it reminds the organizational leaders like the supervisors about skills and knowledge that need to be upgraded (Arminio and Creamer 35).
Conclusion
Performance managementis the system used in ascertaining and developing the performance of human resource in an organization. Performance management involves several stages that must be observed for its effectiveness, for instance, work analysis, and standard development. In as much as the system is effective and has positive outcomes, there are also negative impacts that the organizations must be ready to face in the process undertaking it. COSWAY is a company that in its application of the performance management, it is bound to face all these impacts whether positive or negative.
However, this system will have more positive impacts that will be attributed to production and thereafter sales. Performance management can also lead to stability on the employees’ part due to effective job evaluations, trainings, and rewards. The environmental working conditions for the employees will also be favorable as a result of good equal working terms that are motivating, and also reduce the organization internal impeding predicaments. The time and cost factor as well as killing of employees’ creativity are negative impacts that COSWAY will have to address in the process of performance management. Performance management has a direct impact on the personal quality of all employees, therefore, it should be able to help solve impending issues in organizations. In the process if handling these problems or challenges, organizations, such as COSWAY that incorporate this system will improve the employee performance and productivity.
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