Performance improvement

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Performance improvement is measuring the output of a particular business process or procedure, then modifying the process or procedure to increase the output, increase efficiency, or increase the effectiveness of the process or procedure. Performance improvement can be applied to either individual performance, such as an athlete, or organisational performance, such as a racing team or a commercial business.

Contents

The United States Coast Guard has published the Performance Improvement Guide (PIG), [1] which describes various processes and tools for performance management at the individual and organisational levels.

Organisational development

In organisational development, performance improvement is organisational change in which the managers and governing body of an organisation put into place and manage a program which measures the current level of performance of the organisation and then generates ideas for modifying organisational behaviour and infrastructure which are put into place to achieve higher output. At the organisational level, performance improvement usually involves softer forms of measurement such as customer satisfaction surveys which are used to obtain qualitative information about performance from the viewpoint of customers.

The primary goals of organisational improvement are to increase organisational effectiveness and efficiency to improve the ability of the organisation to deliver goods and or services. A third area sometimes targeted for improvement is organisational efficacy, which involves the process of setting organisational goals and objectives. Performance improvement can occur at different levels: an individual performer, a team, an organisational unit, or the organisation itself.

Corporate or commercial

In business, human performance in sales, operations, and employee engagement is able to be improved through psychologically rewarding experiences "which can trigger a host of intrinsic human emotions and behaviour" as identified by Maslow. Including rewards in a performance improvement solution is a proven strategy to engage employees and align them with the company's goals. Stimulating awards can be cash or non-cash. The addition of non-cash awards to the total rewards package may bring out the performance potential of people because it separates a reward from being used as or perceived as ordinary salary income. Non-cash awards are thought to motivate higher achievement of and drive greater returns on investment. Cash as a reward can also be spent on day-to-day items like food or gas and does not create the increased "psychological reward" of achieving special items, or points to acquire items. By connecting with all levels of the organisation[ how? ], a complete rewards package may amplify performance across the organisation and bring personal goals into alignment with organisational goals," according to Maritz, LLC.[ citation needed ] Reward programs supporting improvement in sales and operations can be effectively paid for from the increase in revenue or profits which flow from the program, and without spending to reward for your current levels.[ citation needed ]

There is evidence that monetary rewards are not effective outside the context of very rote work. In some cases, monetary incentive plans may decrease employee morale, as in Microsoft's stack-ranking system, where the total reward amount is fixed and employees are graded on an artificially fitted distribution [2]

Individual development

Performance improvement at the individual or employee level can be addressed through formal or informal recognition. Examples of formal recognition can include an "employee of the month" award or a spot bonus. Whereas, an example of informal recognition includes genuine acknowledgement, approval, and appreciation for work well done. [3] Performance improvement at the operational or individual employee level usually involves processes such as statistical quality control.

Performance improvement plans

If an employee's performance is unsatisfactory, the employer may set out a performance improvement plan (PIP) to help the employee improve. [4] [5] This may be because the employee is failing to meet the goals for their role, or due to other problems such as poor behavior or interpersonal skills. [6] A PIP is usually a written document, and it should clarify expectations for the employee, articulate how the employee is failing to meet them, lay out what improvements are expected, explain whether and how managers will support the employee in improving, and indicate what the consequences will be if the employee fails to improve. [4] [5] The expected improvements should be specific and measurable [4] [5] and consequences for failing to meet them might include a transfer, demotion, or termination. [4]

Typically, the employee's manager and someone from human resources would meet with the employee to discuss the PIP. [7] According to Donald L. Kirkpatrick, a PIP should be developed by the manager and the employee together, because it requires both of their participation in order to be successful. [8] The American Society for Human Resource Management recommends that "a PIP should be used when there is a commitment to help the employee improve", not just as a way to prepare to terminate the employee, [4] but some companies do use PIPs simply as a way to start a termination. [7]

Methods

Performance is an abstract concept and must be represented by concrete, measurable goals or objectives. For example, baseball athlete performance is abstract as it covers many different types of activities. Batting average is a concrete measure of a particular performance attribute for a particular game role, batting, for the game of baseball.

Performance assumes an actor of some kind but the actor could be an individual person or a group of people acting in concert. The performance platform is the infrastructure or devices used in the performance act.

There are two main ways to improve performance: improving the measured attribute by using the performance platform more effectively, or by improving the measured attribute by modifying the performance platform, which in turn allows a given level of use to be more effective in producing the desired output.

For instance, in several sports such as tennis and golf, there have been technological improvements in the apparatuses used in these sports. The improved apparatus in turn allows players to achieve better performance with no improvement in skill by purchasing new equipment. The apparatus, the golf club and golf ball or the tennis racket, provide the player with a higher theoretical performance limit.

Performance is a measure of the results achieved. Performance efficiency is the ratio between effort expended and results achieved. The difference between current performance and the theoretical performance limit is the performance improvement zone.

Another way to think of performance improvement is to see it as improvement in four potential areas:

  1. input requirements; e.g. working capital, material, replacement or reorder time, and set-up requirements.
  2. throughput requirements, often viewed as process efficiency; this is measured in terms of time, waste, and resource utilisation.
  3. output requirements, often viewed from a cost/price, quality, functionality perspective.
  4. outcome requirements; i.e. did it end up making a difference.

Cycle

Business performance management and improvement can be thought of as a cycle:

  1. Performance planning where goals and objectives are established.
  2. Performance coaching where a manager intervenes to give feedback and adjust performance.
  3. Performance appraisal where individual performance is formally documented and feedback delivered.

Behaviour modification

In his study of innate human needs, psychologist Abraham Maslow in his concept of a hierarchy of needs identified esteem and social fulfillment, garnered by recognition by family and peers, as a basic human need, and therefore able to be tied to structured programs that increase performance. Abraham Maslow, on “Third Force” psychology[ clarification needed ], combines aspects of behavioural, cognitive, and emotional psychology, and accounts for the impact of culture and society on behaviour. [9]

See also

Related Research Articles

<span class="mw-page-title-main">Incentive</span> Something that motivates individuals to perform

In general, incentives are anything that persuade a person to alter their behavior in the desired manner. It is emphasized that incentives matter by the basic law of economists and the laws of behavior, which state that higher incentives amount to greater levels of effort and therefore higher levels of performance.

Expectancy theory proposes that an individual will behave or act in a certain way because they are motivated to select a specific behavior over others due to what they expect the result of that selected behavior will be. In essence, the motivation of the behavior selection is determined by the desirability of the outcome. However, at the core of the theory is the cognitive process of how an individual processes the different motivational elements. This is done before making the ultimate choice. The outcome is not the sole determining factor in making the decision of how to behave.

<span class="mw-page-title-main">Theory X and Theory Y</span> Theories of human motivation

Theory X and Theory Y are theories of human work motivation and management. They were created by Douglas McGregor while he was working at the MIT Sloan School of Management in the 1950s, and developed further in the 1960s. McGregor's work was rooted in motivation theory alongside the works of Abraham Maslow, who created the hierarchy of needs. The two theories proposed by McGregor describe contrasting models of workforce motivation applied by managers in human resource management, organizational behavior, organizational communication and organizational development. Theory X explains the importance of heightened supervision, external rewards, and penalties, while Theory Y highlights the motivating role of job satisfaction and encourages workers to approach tasks without direct supervision. Management use of Theory X and Theory Y can affect employee motivation and productivity in different ways, and managers may choose to implement strategies from both theories into their practices.

Organizational behavior or organisational behaviour is the: "study of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself". Organizational behavioral research can be categorized in at least three ways:

Personnel economics has been defined as "the application of economic and mathematical approaches and econometric and statistical methods to traditional questions in human resources management". It is an area of applied micro labor economics, but there are a few key distinctions. One distinction, not always clearcut, is that studies in personnel economics deal with the personnel management within firms, and thus internal labor markets, while those in labor economics deal with labor markets as such, whether external or internal. In addition, personnel economics deals with issues related to both managerial-supervisory and non-supervisory workers.

<span class="mw-page-title-main">Workforce productivity</span> Concept in economics

Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor productivity, is a measure for an organisation or company, a process, an industry, or a country.

Behavioral operations management examines and takes into consideration human behaviours and emotions when facing complex decision problems. It relates to the behavioral aspects of the use of operations research and operations management. In particular, it focuses on understanding behavior in, with and beyond models. The general purpose is to make better use and improve the use of operations theories and practice, so that the benefits received from the potential improvements to operations approaches in practice, that arise from recent findings in behavioral sciences, are realized. Behavioral operations approaches have heavily influenced supply chain management research among others.

Transactional leadership is a type of leadership style that focuses on the exchange of skills, knowledge, resources, or effort between leaders and their subordinates. This leadership style priortizes individual interests and extrinsic motivation as means to obtain a desired outcome. It relies on a system of penalties and rewards to achieve short-term goals.

Management development is the process by which managers learn and improve their management skills.

Control is a function of management that helps to check errors and take corrective actions. This is done to minimize deviation from standards and ensure that the stated goals of the organization are achieved in a desired manner.

An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees and in sales to attract and retain customers. Scientific literature also refers to this concept as pay for performance.

Organizational behavior management (OBM) is a subdiscipline of applied behavior analysis (ABA), which is the application of behavior analytic principles and contingency management techniques to change behavior in organizational settings. Through these principles and assessment of behavior, OBM seeks to analyze and employ antecedent, influencing actions of an individual before the action occurs, and consequence, what happens as a result of someone's actions, interventions which influence behaviors linked to the mission and key objectives of the organization and its workers. Such interventions have proven effective through research in improving common organizational areas including employee productivity, delivery of feedback, safety, and overall morale of said organization.

In business, operational objectives are short-term goals whose achievement brings an organization closer to its long-term goals. It is slightly different from strategic objectives, which are longer term goals of a business, but they are closely related, as a business will only be able to achieve strategic objectives when operational objectives have been met. Operational objectives are usually set by middle managers for the next six to twelve months based on an organisation's aim. They should be attainable and specific so that they can provide a clear guidance for daily functioning of certain operations. This business term is typically used in the context of strategic management and operational planning.

Employee retention is the ability of an organization to retain its employees and ensure sustainability. Employee retention can be represented by a simple statistic. Employee retention is also the strategies employers use to try to retain the employees in their workforce.

Compensation and benefits (C&B) is a sub-discipline of human resources, focused on employee compensation and benefits policy-making. While compensation and benefits are tangible, there are intangible rewards such as recognition, work-life and development. Combined, these are referred to as total rewards. The term "compensation and benefits" refers to the discipline as well as the rewards themselves.

Work motivation is a person's internal disposition toward work. To further this, an incentive is the anticipated reward or aversive event available in the environment. While motivation can often be used as a tool to help predict behavior, it varies greatly among individuals and must often be combined with ability and environmental factors to actually influence behavior and performance. Results from a 2012 study, which examined age-related differences in work motivation, suggest a "shift in people's motives" rather than a general decline in motivation with age. That is, it seemed that older employees were less motivated by extrinsically related features of a job, but more by intrinsically rewarding job features. Work motivation is strongly influenced by certain cultural characteristics. Between countries with comparable levels of economic development, collectivist countries tend to have higher levels of work motivation than do countries that tend toward individualism. Similarly measured, higher levels of work motivation can be found in countries that exhibit a long versus a short-term orientation. Also, while national income is not itself a strong predictor of work motivation, indicators that describe a nation's economic strength and stability, such as life expectancy, are. Work motivation decreases as a nation's long-term economic strength increases. Currently work motivation research has explored motivation that may not be consciously driven. This method goal setting is referred to as goal priming. Effects of primed subconscious goals in addition to goals that are consciously set related to job performance have been studied by Stajkovic, Latham, Sergent, and Peterson, who conducted research on a CEO of a for-profit business organization using goal priming to motivate job performance. Goal priming refers to the achievement of a goal by external cues given. These cues can affect information processing and behaviour the pursuit of this goal. In this study, the goal was primed by the CEO using achievement related words strategy placed in emails to employees. This seemingly small gesture alone not only cost the CEO very little money, but it increased objectively measured performance efficiency by 35% and effectiveness by 15% over the course of a 5-day work week. There has been controversy about the true efficacy of this work as to date, only four goal priming experiments have been conducted. However, the results of these studies found support for the hypothesis that primed goals do enhance performance in a for-profit business organization setting.

Employee motivation is an intrinsic and internal drive to put forth the necessary effort and action towards work-related activities. It has been broadly defined as the "psychological forces that determine the direction of a person's behavior in an organisation, a person's level of effort and a person's level of persistence". Also, "Motivation can be thought of as the willingness to expend energy to achieve a goal or a reward. Motivation at work has been defined as 'the sum of the processes that influence the arousal, direction, and maintenance of behaviors relevant to work settings'." Motivated employees are essential to the success of an organization as motivated employees are generally more productive at the work place.

Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.

Employee recognition is the timely, informal or formal acknowledgement of a person's behavior, effort, or business result that supports the organization's goals and values, and exceeds their superior's normal expectations. Recognition has been held to be a constructive response and a judgment made about a person's contribution, reflecting not just work performance but also personal dedication and engagement on a regular or ad hoc basis, and expressed formally or informally, individually or collectively, privately or publicly, and monetarily or non-monetarily.

Employee motivation, also known as work motivation, is a feature of employees that refers to how motivated they are to work. It has a significant impact on employee productivity and efficiency." While motivation is defined as why individuals do or participate in certain behaviors.

References

  1. ↑ "U.S. Coast Guard Auxiliary / Auxiliary Leadership Development Program". 2021-04-01. Retrieved 2021-04-01.
  2. ↑ Foley, Mary Jo. "Microsoft does away with stack ranking". ZDNet . Retrieved 5 December 2013.
  3. ↑ Fred Luthans; Alexander D. Stajkovic (2009). "Provide Recognition for Performance Improvement". In Locke, Edwin A. (ed.). Handbook of principles of organizational behavior : indispensable knowledge for evidence-based management. Chichester, Sussex Hoboken: John Wiley & Sons. doi:10.1002/9781119206422.ch13. ISBN   978-0-470-74095-8. OCLC   680040834.
  4. 1 2 3 4 5 "How to Establish a Performance Improvement Plan". SHRM . Retrieved 14 January 2022.
  5. 1 2 3 "Performance at work". Landau Law. Retrieved 14 January 2022.
  6. ↑ "What to do if you're put on a performance improvement plan". The Sydney Morning Herald (Sydney, Australia). 14 September 2019. p. 11. Retrieved 14 January 2022.
  7. 1 2 "What to Know About Performance Improvement Plans". The Muse. Retrieved 14 January 2022.
  8. ↑ Kirkpatrick, Donald L. (2006). Improving employee performance through appraisal and coaching (2nd ed.). New York. pp. 66–69. ISBN   9780814408766.{{cite book}}: CS1 maint: location missing publisher (link)
  9. ↑ Horney, Karen (1950). Neurosis and human growth : the struggle toward self-realization. New York: Norton. ISBN   978-0-393-30775-7. OCLC   285408.
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