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Aligning Performance Management With Strategic Planning Add in library

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Question:

Given the company's strategic orientation toward purpose and values, what would you do to help align a new performance management system with the strategic plan?

How would you explain this relationship?

What would you say and do to garner company-wide support for your performance management system?
 
 

Answer:

Introduction:

P&G is a multinational Organization of consumer goods situated in United States. It sells products like personal care, cleaning agents, pet foods. The P&G Company is well known for its unique strategy which cares about the need of human. It not only makes its product available to its consumers but also tries to improve the life of its consumers. This strategy is more focus on its consumers wants and that is why it has an appeal to the heart of the consumer. The company has diversified its product line and also acquired other companies which have significantly contributed in the growth of their profitability.

There are many kinds of tools in performance management, they are : performance planning, development planning, self-evaluation questions, training and evaluation  which must be used in and effective way so as to increase the participation of the employees in the organization with it maximum potential. Hence performance management helps and organization to obtain its objective with effective manpower.

The functions of HR for aligning a new performance management system with the strategic plan:

The strategic orientation of P&G towards its purpose and values:

The purpose of P&G is to improve the lives of the consumer from various parts of the world and provide superior quality of services and products and value. In return they intend to receive consumer reward with leadership value creation, sales and profit by considering their shareholders, customers and communities in which they work.

P&G aims to recruit and attract enthusiasts without observing difference apart from that of potentiality (Lafley, 2010). P&G aims to maintain integrity and encourage their passion for winning. They have a clear vision of their purpose and operate according to the spirits of the law. They consider the accountability to meet the requirements of the business and improve their effectiveness. The basic business strategy for P&G is the diversity of the supplier (A, 2013). They believe that diversity is the key which makes the internal and external public of a company to fulfill the principles and values (Bachrach and Schermerhorn, 2013).

To obtain the objective a company needs a strategy and in order to implement a strategy the resources along with the workforce plays a key role. The workforce is the human resource of an organization that is the main support on which the company relies. In order to achieve the aim of an organization P&G needs to implement a new performance management system (Cascone, 2011). The HR in P&G is responsible in person for supervising the reviews of annual diversity along with the top management and director of diversity of every units and function of a business (Chiarini, n.d.). P&G conducts survey on basis of their training and customer feedback to which the gets benefits both in organizational as well as individual level. They provide a competitive based salary, which includes incentives and bonus depending on the performance of the employee.

P&G highly depends on the customer service because they provide consumer-based products. According to the performance opportunities and appraisals are provided (Demartini, n.d.). Career planning and succession planning is also encouraged according to the potential of the employees. This kind of performance management system has been a strong infrastructure of the company and credits to their organizations profitability (Fernandez and Moldogaziev, 2012). This states that P&G appreciates the effort of their employees which distinguishes them from their competitors.

 

In order to align a new performance management system with the strategic plan of P&G there are certain approaches that P&G needs to follow, they are:

1. First and foremost the HR needs to inform the employees about the new performance management:

In order to align the strategic plan a company needs to update their performance system. It is necessary for an organization because new system of performance management results in the increase in involvement of the employees. But it often happens that with the announcement or declaration of new system of performance management, the employees gets de motivated and their level of productivity also decreases (Freeman, 2010). It must be ensured that the new system of performance management needs to be more attractive than the previous one. This information must be conveyed to the existing employees. Clear information and a face to face confrontation of with the employees are necessary so that the employees wouldn’t adopt a negative impression.

2. Provide employees the prospect of assessing themselves:

A HR manager needs to complete the appraisal of performance of the employees and provide them a form of evaluation. The employees need to comprehend their own level of potentiality. If the evaluation process is done by the employees themselves then the feedback mostly becomes negative. The employees are generally more critical of them and give negative remarks for their performance. Acquiring the input of the employees own performance may give way to communication which will help the HR to frankly discuss the perceptions and opinions between the two evaluations.

3. Collect information from sources:

Instead of getting input and feedback from the supervisors, those who make employee interaction should also be consulted for performance evaluation. This process will include co-workers, clients or customers, executives, departments, team members or who regularly interacts with the existing employees and can give information about the weakness and strengths of the employees.

4. Make the employees understand their role in the overall vision of the company:

It is very much essential for the employees of P&G to understand the vision, value and mission of the company and the target for a specific period of time. A clear vision of target will help the employees understand their potential, productivity and efficiency (Hoàng and Hải, 2013). They would also try to find out whether their present competency is sufficient enough for P&G to achieve their aim.

This is a very important part of an HR. At this step; the HR needs to make sure that the employees consider the target to be achievable. For this the management needs to encourage and motivate them so that they could give their best.

 

5. Provide scope for advancement and development of employees:

An essential part of employee engagement and performance management, the opportunity to provide scope for advancement and development is a compulsory job of an HR (Harris, Craig and Light, 2011). Without the scope of career or development an employee never wishes to remain in the organization. If the organization is unable or doesn’t provides ample scope of advancement for its employees then the turnover increases. This means that the company may lose many of its efficient employees (Walker, Damanpour and Devece, 2010).

The evaluation method should be a forum for open discussion regarding the improvement of the efficiency of the employees and will also decide the need for training and advancement of the employee. This would also help employees to improve their effectiveness and their efficiency towards work (Fujimoto and Härtel, 2010).

6. Strategic means of rewarding their employees by employee evaluation:

The HR must ensure that the evaluation of performance must be linked to the system of compensation and a fair system is conducted for monitoring the raise in pay and the bonus provided by the company (Kerzner, 2014). This is a system that indirectly motivates the performance of the employees and helps them to keep and estimation of their future. The employees must also know the policy of compensating so that they can claim their money in case of misconduct (Martín-de Castro et al., 2013). In case of new system of performance management the employees pre-considers the fact that the new policy would be less helpful to them but this misconception should be cleared by the HR (Procter & Gamble Digitizes its Talent Management Processes through Customized Talent by Design Solutions, 2013).

If these certain steps are followed for the Human Resource of an Organization then P&G would certainly be able to align with its future goal.

The System for management performance in order to align the Strategic plans of P&G can be formed in the following way.

The relationship between the Strategic plan and the Performance management system of P&G:

The Strategy of P&G is to consider the human needs first. There are examples provided in the case study that states that considering the hygiene factor P&G designed their men’s razor Gillete, similarly for Brazilian people they made “Basico”, which made essential commodities affordable for them. Similarly their strategy is to make commodities according to the wants and needs of their customer and increase their number of customer.

Performance management is an action which is taken in order to obtain the target of an organization, whereas strategic planning is the setting up of methods by which a company will achieve its objective (Poister, 2010). The goals of performance management come from the strategic planning of a company. The goals set by strategic planning are used to analyze and determine the objectives and goals of every individual in P&G. generally it is considered that setting the goals of employees depends on the target of a specific work unit. Performance management system helps to enhance the skills and efficiency of the employees (Van Dooren, 2011).

Performance management depends on precise end results, not just the activities but the outcomes of those results are also considered. The Strategic plan’s objectives and goals concentrate on measurement of performance results and help to describe appropriate indicators of performance. The Strategic plans make the performance of employees to be measured. Strategic plan must continually check the outcomes measures and the goals of the organization.

 

In context of P&G:

For P&G the strategic plan is to make products for consumer. This seems to be a very common objective of any other organization, but P&G has a different strategy. They not only aim to sell their products by making them acceptable to the customers but the customers must have a benefit from the product. Like in market segmentation in Brazil, they used price strategy. A question generates that how the strategic plan will impact on the performance management? It is so that the employees have to use optimum resources to make their product worthy of the price charges per products. P&G increased its supply while making products available in affordable price in Brazil (Taylor, 2014).

In order to increase supply the employees had to work more efficiently, and in order to increase the efficiency they needed to evaluate their performance (Rothwell, Zaballero and Park, 2014). Hence performance management came into existence in this strategic plan of P&G.

In case of providing a sanitary razing system to the Indian male customers, P&G realized that the blade used by the barbers is used in an unsanitary condition, they immediately identified the need of the customers in India. Hence they made a razor keeping in mind the need of the Indian customers. They used an innovative method of solving the problem. In this process, the design and the idea and people who worked to create the product had to be efficient enough to make the product. Thus for this productivity, creativity, skills and efficiency the system of performance management was significant. It was to be ensured that the employees have to understand the requirement of the customer and so did they work and put their effort to make the product.

What would you say and do to garner company-wide support for your performance management system?

Measures to garner the company wide support of performance management system:

  1. Make the approach

It is difficult to make a post launch, launch and pre launch communication plan for an organization launching its new system of performance management. Multiple vehicles for communication are required, like posters, news letters from the executives along with handbooks; email voice messages should also be used. The process of communication will be continually demonstrated. The HR has to be act like the advocate and communicate the importance and value of the new performance system.

  1. Clarify the roles and responsibilities for the Stakeholders

A system of Performance management is considered as a system of accountability. Form frontline employees to senior executives everyone is involved in the system of performance management. They are provided with the information of their respective accountability in contributing for their organizations. Here, the role of HR will be to clearly demonstrate the role of every profile and the strategic priorities of the organization (Spieth and Lerch, 2014). The prime focus of the new system of performance management should be increasing the customer retention rate and gather new customer with the efficiency and productivity level of the employees. Once the priorities ate set the HR has to establish necessary steps for the organization. Including both lag and lead measures the balanced scorecard measures must be included that would provide a proficient way for the performance of the employees. It is also to be ensured that an effectual set of climate should also be introduced that would influence the work culture and the work ethics.

  1. Develop the potential of the key players

 

The new system of performance management should actively involve its employees and in order to ensure that a proposal should be made that would analyze the participation terms of the employees (Men, 2011). The Proposal must ensure the senior personnel that the performance management system will be vary agreeable and will contribute in achieving the goal (Scullion and Collings, 2011). Certain data analysis on the probability and other data that will overrule the notion of negative notion would lead to an acceptable garner.

 The key player will be identified, enhances and motivated so as to deliver performance on behalf of P&G. This would help the process because the reliability of the employees will increase.  They would be the trump card that would play a major part and the hopeful positive impact (Palethorpe, 2010).

  1. To align process and systems :

In order to garner the company wide support it was important to demonstrate the importance of the system. Now the PMS (Performance Management System) has established its importance it is important to cater the use of the management system and how it works. There should be effective and unbiased reviews (Osman, Anouze and Emrouznejad, n.d.). Every plan has an action and every action has its consequences. This consequences in PRS needs to be evaluated and that would help to identify whether it is working effectively.

The support will be received if the outcomes are assured to have at least a moderate impact for the goals of an Organization. With P&G’s aim of reaching its customers the new PMS of the company needs to assure that the customer does not gets affected.

  1. Provide clear steps:

The company must know each and every step, their backups and what the possible negative impacts are. These steps should be arranged in a way that follow up should be easy.

Time is a big factor in this process. A new system of performance management should make sure that the time required for this system will be less than the previous format (Poister, 2010). This includes not only the required time for the whole process to be implemented, but also the time that will be taken to make the process effective (Safaripoor and Fadaei, 2015). Thus the HR should establish the value of time through his presentation that would convince the members of P&G to accept to the proposal of the new system of Performance management (Payaud, 2013).

Conclusion:

The performance management is a continual communication between the employees and the management in order to clarify the responsibilities and enhance the performance incessantly. It is a concept which has widely become a part of HR management. In order to achieve the goal of a company, performance management plays s a crucial role. Today, the expectation of customers is increasing daily and it has become a challenge for organizations to satisfy their customer. Performance management is an integrated and strategic process which aids to maintain as well as deliver success by developing the skills and improving the performance for every individual in a well ascertained team (Rothwell, Zaballero and Park, 2014). Performance management not only depends on the performance of the employees but also depends on the Organizations behavior towards its employees.

 

References

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  • Bachrach, D. and Schermerhorn, J. (2013). Introduction to Management, 12th Edition International Student Version. 12th ed. Wiley, p.624.

  • Cascone, J. (2011). Equipped to sustain (how an organizationÂ’s internal audit plan can help it meet its current sustainability needs). Strategic Direction, 27(8).

  • Chiarini, A. (n.d.). Sustainable Operations Management.

  • Demartini, C. (n.d.). Performance management systems.

  • Fernandez, S. and Moldogaziev, T. (2012). Using Employee Empowerment to Encourage Innovative Behavior in the Public Sector. Journal of Public Administration Research and Theory, 23(1), pp.155-187.

  • Freeman, R. (2010). Stakeholder theory. Cambridge [u.a.]: Cambridge Univ. Press.

  • Fujimoto, Y. and Härtel, C. (2010). Moderating and mediating effects of workforce diversity. Saarbrücken, Germany: LAP Lambert Academic Publishing.

  • Harris, J., Craig, E. and Light, D. (2011). Talent and analytics: new approaches, higher ROI. Journal of Business Strategy, 32(6), pp.4-13.

  • Hoàng, N. and Hải, N. (2013). Designing and implementing the toolkit of QoS parameter-based network performance evaluation. JCC, 16(4).

  • Kerzner, H. (2014). Project management best practices. Hoboken: Wiley.

  • Lafley, A. (2010). Our Values and Policies. 1st ed. [ebook] Ohio: P&G, p.24. Available at: https://www.pg.com/images/company/who_we_are/pdf/values_and_policies907.pdf [Accessed 17 Mar. 2015].

  • Martín-de Castro, G., Delgado-Verde, M., Navas-López, J. and Cruz-González, J. (2013). The moderating role of innovation culture in the relationship between knowledge assets and product innovation. Technological Forecasting and Social Change, 80(2), pp.351-363.

  • Men, L. (2011). How employee empowerment influences organization–employee relationship in China.Public Relations Review, 37(4), pp.435-437.

  • Osman, I., Anouze, A. and Emrouznejad, A. (n.d.). Handbook of research on strategic performance management and measurement using data envelopment analysis.

  • Palethorpe, R. (2010). Management Teams: Why They Succeed or Fail (3rd ed.)20101R. Meredith Belbin. Management Teams: Why They Succeed or Fail (3rd ed.) . Oxford, England and Burlington, MA: Butterworth‐Heinemann 2010. , ISBN: 978‐1‐85617‐807‐5 RRP: £21.99.Industrial and Commercial Training, 42(5), pp.274-275.

  • Payaud, M. (2013). Marketing Strategies at the Bottom of the Pyramid: Examples From Nestlé, Danone, and Procter & Gamble.  Bus. Org. Exc., 33(2), pp.51-63.

  • Poister, T. (2010). The Future of Strategic Planning in the Public Sector: Linking Strategic Management and Performance. Public Administration Review, 70, pp.s246-s254.

  • Procter & Gamble Digitizes its Talent Management Processes through Customized Talent by Design Solutions. (2013). 1st ed. [ebook] Accenture, p.3. Available at: https://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Procter-Gamble-Digitizes-Talent-Management-Processes-Design-Solutions.pdf [Accessed 18 Mar. 2015].

  • Rothwell, W., Zaballero, A. and Park, J. (2014). Optimizing Talent in the Federal Workforce. London: Management Concepts Press.

  • Safaripoor, R. and Fadaei, M. (2015). Examining the effect of Employees’ skill on financial performance: the mediating role of organizational learning and organizational innovation.  Jour. Rese. Busi. Econ. and Manag., 5(1), p.319.

  • Scullion, H. and Collings, D. (2011). Global talent management. New York: Routledge.

  • Spieth, P. and Lerch, M. (2014). Augmenting innovation project portfolio management performance: the mediating effect of management perception and satisfaction. R&D Management, 44(5), pp.498-515.

  • Taylor, J. (2014). Organizational Culture and the Paradox of Performance Management. Public Performance & Management Review, 38(1), pp.7-22.

  • Tazhitdinov, I. (2013). The applying stakeholder approach to strategic management of territories development. EoR, pp.17-27.

  • Van Dooren, W. (2011). Better Performance Management. Public Performance & Management Review, 34(3), pp.420-433.

  • Walker, R., Damanpour, F. and Devece, C. (2010). Management Innovation and Organizational Performance: The Mediating Effect of Performance Management. Journal of Public Administration Research and Theory, 21(2), pp.367-386.
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