According to Moynihan & Pandley (2010), performance management is the process of aligning systems, employees and organizational resources to the organization’s strategic goals. It includes activities ensuring consistent achievement of targets in an efficient and effective manner. Operations management, on the other hand, involves controlling the whole production process so as to control efficiency in the organization regarding the provision of goods and services, (Subramanian & Ramanathan, 2012). Performance management in the context of operations management, therefore, focuses on the performance of employees, departments, entire organization and process of creating goods and services within the firm. It is used to refer to tools, activities, processes and programs that are applied by the company in the management of teams and departmental or individual performance.
Cost leadership: A company may have a target to reduce the costs of its product so as to make them more affordable to the customers, (Teece, 2010). This is cost leadership. It is a strategic objective that can be achieved through offering price cuts and customized products to enable low and middle-income families to afford them.
Differentiation objective: This is an objective that can be used by firms to make their goods and services unique, (Rathaermel, 2015). A company may make exclusive brands which are different from those of its rivals. This may make the firm more competitive as compared to other enterprises as it will be able to develop a market niche
Focus: A company with this objective can concentrate on customer satisfaction through provision of high-quality products at high prices, or cost reduction by adopting cost leadership, (Teece, 2010). A firm which utilizes cost leadership may have an objective of focusing on low and middle-income families, so as to gain a competitive edge.
Operational excellence goal: A company may develop an objective of automating the production process so as to improve efficiency in its activities. This may enable it to develop cost leadership, (Guest, 2011). When the organization can provide goods at affordable prices, then it may achieve customer loyalty for its products.
Product leadership: This is an objective that enables a firm to provide superior products to the market. It can be accomplished through automation of the production process and utilizing the services of experienced personnel, (Gurman, 2011). This objective can also be used to achieve product differentiation.
Importance of performance management to ABC garments Ltd concerning;
Regular feedback enhances efficient communication in the organization. Performance management assists in determining the weaknesses and strengths of the enterprise, (Guest, 2011). This could be monitored regarding the machines available and the type of workforce in the firm. It also allows for a forum to exchange expertise and views in the business, (Guest, 2011). Primarily, it gives the management of ABC a better understanding of the firm- whether the machines should be serviced, whether to employ more skilled staff or to adopt a particular technology so as to improve the operating system.
When the subordinates and the managers have an explicit knowledge of the particular operations they should carry out, any complexities in the workplace can quickly be eliminated. Performance management may, therefore, enable ABC to hold each employee accountable for their actions. This will empower and clarify the responsibilities of each worker in the operating system, (Kamruzzaman, 2011). Also, performance management plans involve clear, precise, understandable and practical improvement in productivity and operations.
Through conducting this activity, the management of ABC Ltd can identify key areas of weaknesses so as to adjust in them. Some operations may be cash traps to the firm, (Pertusa-Ortega, Molina-Azorin &Claver-Cortes, 2010). Such transactions should be retrenched so as to reduce unprofitable expenditures. The company is also able to evaluate the key capabilities and weaknesses through evaluating its employees’ performance and the available machines, (Ullah, 2015). Cost reduction can also be achieved through risk management. The manager can identify possible risks that the business is exposed to and adjust to them in time before incurring losses.
Performance management will enable the management of ABC to identify the potential of every employee. This makes the management to stage the employee in appropriate positions that they can work inappropriately. It will encourage efficiency in the organization by reducing wastages in terms of time and resources, (Titacchi, Tonelli & Cagnazzo, 2010). Minimization of costs of operation will also be achieved, making the firm to be more profitable.
As explained by Gurman (2011), conducting performance appraisal enables a company to utilize the physical resources available in the environment optimally. These may include raw materials, technology, and gaps in the market. Through conducting performance management, ABC Ltd can identify the training needs of its employees and train them appropriately so that they can obtain the relevant skills to use the recent technology in the market to promote its products. These may include social media marketing and e-commerce.
Through performance measurement, the management is in a position to identify the effectiveness of devices and determine maintenance and replacement times. The management of ABC is also able to monitor the skills of its employees so as to ensure that the machines are being handled efficiently. Performance management is also an essential basis for determining training needs in the enterprise, (Guest, 2011).Whenever the ABC detects mishandling of machines, then it may be able to train the employees on the proper ways of handling the tools so as to increase productivity.
Gruman, J. A., & Saks, A. M. (2011). Performance Management and Employee Engagement. Human Resource Management Review, 21(2), 123-136.
Guest, D. E. (2011). Human Resource Management and Performance: Still Searching for Some Answers. Human Resource Management Journal, 21(1), 3-13.
Kamruzzaman, M. (2011). ABC Knit Dyeing & Finishing Mills Ltd (Falcon Group) (Doctoral Dissertation, Daffodil International University).
Moynihan, D. P., & Pandey, S. K. (2010). The Big Question for Performance Management: Why Do Managers Use Performance Information? Journal of Public Administration Research & Theory, 20(4), 849-866.
Pertusa-Ortega, E. M., Molina-Azorín, J. F., & Claver-Cortés, E. (2010). Competitive Strategy, Structure and Firm Performance: A Comparison of the Resource-Based View and the Contingency Approach. Management Decision, 48(8), 1282-1303.
Rothaermel, F. T. (2015). Strategic Management. New York, NY: Mcgraw-Hill.
Subramanian, N., & Ramanathan, R. (2012). A Review of Applications of Analytic HierarchyProcess in Operations Management. International Journal of Production Economics, 138(2), 215-241.
Taticchi, P., Tonelli, F., & Cagnazzo, L. (2010). Performance Measurement and Management: A Literature Review and a Research Agenda. Measuring Business Excellence, 14(1), 4-18.
Teece, D. J. (2010). Business Models, Business Strategy and Innovation. Long Range Planning, 43(2), 172-194.
Ullah, A. (2015).Garment Industry in Bangladesh: An Era of Globalization and Neo- Liberalization. Middle-East Journal of Business.
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