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Limitations of CERA's individual performance measurement approaches and recommended alternative approaches

Discuss about the Civil Engineering Research Association.

In the present competitive business environment, evaluation of each individual performance level within the organizational structure has become extremely important for achieving sustainable growth in the market. For that reason, many organizations tried to utilize several strategies in order to measure the performance level of each individual in an appropriate manner. Many studies have mentioned that proper utilization of performance measurement approach can help employees to identify the strengths and weaknesses in an appropriate manner (Searcy, 2012). In addition, it also helps organizations to provide efficient guidance to the employees according to their performance level. In this report, the focus will be on Civil Engineering Research Association (CERA) that is focusing on the development of effective infrastructure for the community. The prime focus of CERA for developing effective infrastructure, as it can able to evaluate the performance level of each individual in an appropriate manner. CERA works in the critical engineering sector. For that reason, it has to perform several complex responsibilities for fulfilling the requirements of the organization. It has become necessary for CERA to give their best at the workplace in order to satisfy the clients effectively. For that reason, the organization also has tried to implement different strategies so that it can able to create a positive impact on the productivity of the working employees.

As per the article by Zheng et al. (2016), proper utilization of techniques and tools regarding the performance management is necessary within an organizational structure. Otherwise, it also can create obstacles on the path of success for an organization. It has been identified that implement individual performance measurement techniques by CERA do have some limitations. As a result, it has affected the effectiveness of the performances level of the organization. The limitations of CERA’s implemented individual performance measurement approach are elaborated as follows:

As per the article by Bititci et al. (2012), proper utilization of financial benefits structure is very important to influence people to give their best at the workplace. It has been identified that CERA focuses on to providing maximum financial benefits to their best people. In fact, CERA’s payment structure is been implemented in such a way so that it can able to provide benefit above than the market rate for their best people (Bufalino et al., 2014). CERA feels that providing benefits above than the market rate can create huge amount of positive impact on the motivational level of the employees. Therefore, they will try to take on more complex and difficult projects with a positive mindset. Now, it can be mentioned that CERA is always focus on taking the challenges of completing complex and difficult projects. Therefore, it is necessary for the organization to maintain the motivational level of the employees. However, Bhattacharya et al. (2014) have criticized this implemented strategies as it has not able to justify the equity theory of motivation in an appropriate way. The equity theory of motivation highlights the fact that organizations need to consider each employees equally so that all the members within the organizational structure feel motivated towards the roles and responsibilities. However, CERA has only focuses on providing additional benefits to the specific group of individuals (Chenhall, Hall & Smith, 2013). Thus, it will create adverse impact on the perception of other employees regarding their future with the organization. Thus, they will feel de-motivated towards their roles and responsibilities. Therefore, it will definitely create adverse impact on the performance level of the other employees. Thus, implemented individual performance measurement technique will not be able to depict the clear picture regarding the performance level of the employees (Cassel et al., 2014). It has been identified that performance measurement technique focuses on the results. Therefore, it will unable to depict the exact reason for lack of performances from the entire team members.

Unstructured financial benefits

Speklé & Verbeeten (2014) has also mentioned that paying more to specific individuals can actually create adverse impact on the cognitive evaluation theory, which elaborates that paying more than the market rate can minimize the innovative skills of that particular group of engineers. The main reason is that, those individuals will focus more on getting incentives rather than increase the effectiveness or quality of the work. In the present business environment, continues improvement of the level of skills for an organization is extremely important to sustain its position in the market. Therefore, majority of the organizations tries to utilize different innovative process so that it can create positive impact on the level of skills of the organization (Zaman & Lehmann, 2013). However, CERA’s implemented strategies regarding the offering of financial benefits have created adverse impact on the performance level of the organization.

The above discussion highlighted the fact that unstructured utilization financial benefits in CERA has created huge amount of adverse impact on the performance level of the employees. Thus, CERA’s first objective will be to evaluate the best possible way to provide financial benefits to the employees. Firstly, CERA will have to formulate a well-structured framework with the organization, which will have employees with different designations. After that, CERA will have to standardize the monetary benefit levels for the different designations so that employees can able to understand the exact reason for paying higher benefits to a particular group of employees (Koufteros, Verghese & Lucianetti, 2014). Now, CERA will have to mark the exceptional performers of the organization and then will have to provide them with higher designations. This will not only help the top performers to have proper career progression but also will influence others to give their best at the workplace. Since, possibility of promotion will increase the motivational level of the employees in a much more effective way. On the other hand, CERA will able to justify the exact reason of extra pay to a particular employee, which reduce the possibility of conflicts within the organizational structure.     

Many studies have highlighted the significance of proper utilization of bonus schemes so that employees can feel motivated to perform beyond the expectation. However, it has been assessed that CERA has not able to satisfy all the employees with the bonus schemes. In fact, it has been analyzed that organizations working in the same sector is providing better bonus schemes to the employees (Knüpfer et al., 2012). Thus, it has created major adverse impact on the effectiveness of the performance level of the employees working CERA. Furthermore, many organizations are looking provide additional benefits like disability, housing and health insurance for all levels of employees so that it can able to motivate employees to give their best at the workplace. However, CERA has not focused too much on the utilizing these schemes for enhancing the performance level of each individual. It has been assessed that organizations that focuses on utilizing all these schemes in an appropriate manner are often able to retain their talents. Thus, it increases the probability of enhancing the performance level for an organization (Bhatt et al., 2015). Conversely, as CERA has not focuses on the proper utilization of the incentives scheme it will definitely create adverse impact on the employee retention rate.

Recommended alternative approaches

In order to minimize the adverse impact of the ineffective bonus scheme, CERA will have to consider utilization of unique bonus schemes so that it can able to create positive impact on the performance level of the employees. Therefore, CERA will have to cover safety bonus scheme, quality bonus scheme, customer satisfaction/service bonus scheme, attendance bonus schemes in an appropriate manner. As per the article by Grigoroudis, Orfanoudaki & Zopounidis (2012) traditional bonus scheme is not creating expected amount of impact on the enhancement of the motivation for the employees. Hence, it has become necessary for CERA to consider all the mentioned bonus schemes so that employees motivate themselves to give their best at the workplace. In order to provide bonus to the employees in an appropriate way, CERA will have analyze the performance level of the employees in an appropriate way. Proper analysis will provide CERA an idea regarding the positive and liability aspects of each employee. Therefore, it will help CERA to reduce amount of liability in an appropriate way. For instance, 100% attendance has able to encourage employees to become more regular in several organizations. Thus, it is expected that attendance scheme will also create positive impact on the overall effectiveness of the operational processes. In contrast, too much absenteeism can damages CERA’s objective in a major way. Safety bonus scheme is also another important aspect that CERA will have to offer to all level of employees. As a engineering firm, CERA will have to conduct many risky operations. Therefore, it is necessary that organization took care of the safety level of the employees and also provide several benefits for taking risks for the organizational success. Furthermore, Franco-Santos, Lucianetti & Bourne (2012) have mentioned that employees can easily compare the bonus scheme of CERA with other organizations. Therefore, CERA will have to analyze the market bonus structure in order to retain employees for a longer period of time.

As per the article by Melnyk et al. (2014), proper utilization of performance review technique is very important to measure the performance level of the employees effectively. In fact, it also provides organizations the opportunity to analyze how the performance level of a particular employee is increasing or decreasing over the certain period of time. However, CERA has implemented management-by-objectives scheme, which analyze the past year performance of the employees and then question them about this in the next year. As a result, it will induce employees to concentrate more on their future with the organization than focusing on the present performance level. Thus, it will also affect the present performance level of the employees (Barros, Managi & Matousek, 2012). Furthermore, it has been highlighted by many studies that utilization of this technique will influence organizations to focus more on the poor performers and best performers will be taken as a granted.  For that reason, it can create major impact on the motivational level of the top performers that will also eventually hamper the effectiveness of the operational processes.

Ineffective bonus schemes

The above discussion highlighted that implement strategy of CERA for reviewing the performance level of the employees is not at all effective. In fact, it can increase confusion among the employees regarding the performance level. Therefore, CERA will have to make major changes in the performance review process so that it can able to create greater impact on the effectiveness of the operational process. For instance, CERA can utilize performance review system on monthly basis so that employees do not have think too further and can concentrate more on the present performance level. CERA can also recognize best performing employees through a token of recognition like “Star performer of the month” so that employees can feel motivated in performing their responsibilities in an appropriate manner. CERA can also utilize month wise performance assessment meetings in order to highlight strengths and weaknesses of the employees in an appropriate way. The meeting will also include identification of the best possible way by which each employee can able to fulfill all the goals and objectives of the organization in an appropriate way.

Conclusion:

From the above analysis, it can be assessed that CERA will have to focus more on the implemented strategies regarding the performance measurement processes. It can be mentioned that implemented strategies of CERA has not able to create desired amount of impact on the performance level of the organization. Thus, CERA will have to focus more on the mentioned alternative approaches in order to enhance the present level of performances of the employees. Furthermore, the above discussion highlighted that CERA has not focuses too much on the consistence improvement on the performance level. Therefore, CERA will also have to implement strategies in such a way so that all employees can able to improve in an appropriate way. It will eventually create positive impact on the sustaining position in the market.

References:

Barros, C. P., Managi, S., & Matousek, R. (2012). The technical efficiency of the Japanese banks: non-radial directional performance measurement with undesirable output. Omega, 40(1), 1-8.

Bhatt, D. L., Drozda, J. P., Shahian, D. M., Chan, P. S., Fonarow, G. C., Heidenreich, P. A., ... & Welke, K. F. (2015). ACC/AHA/STS Statement on the Future of Registries and the Performance Measurement Enterprise: A Report of the American College of Cardiology/American Heart Association Task Force on Performance Measures and The Society of Thoracic Surgeons. Journal of the American College of Cardiology, 66(20), 2230-2245.

Recommended alternative approaches

Bhattacharya, A., Mohapatra, P., Kumar, V., Dey, P. K., Brady, M., Tiwari, M. K., & Nudurupati, S. S. (2014). Green supply chain performance measurement using fuzzy ANP-based balanced scorecard: a collaborative decision-making approach. Production Planning & Control, 25(8), 698-714.

Bititci, U., Garengo, P., Dörfler, V., & Nudurupati, S. (2012). Performance measurement: challenges for tomorrow. International Journal of Management Reviews, 14(3), 305-327.

Bufalino, V., Bauman, M. A., Shubrook, J. H., Balch, A. J., Boone, C., Vennum, K., ... & Arnett, D. (2014). Evolution of “the guideline advantage”: lessons learned from the front lines of outpatient performance measurement.CA: a cancer journal for clinicians, 64(3), 157-163.

Cassel, C. K., Conway, P. H., Delbanco, S. F., Jha, A. K., Saunders, R. S., & Lee, T. H. (2014). Getting more performance from performance measurement. New England Journal of Medicine, 371(23), 2145-2147.

Chenhall, R. H., Hall, M., & Smith, D. (2013). Performance measurement, modes of evaluation and the development of compromising accounts.Accounting, Organizations and Society, 38(4), 268-287.

Franco-Santos, M., Lucianetti, L., & Bourne, M. (2012). Contemporary performance measurement systems: A review of their consequences and a framework for research. Management Accounting Research, 23(2), 79-119.

Grigoroudis, E., Orfanoudaki, E., & Zopounidis, C. (2012). Strategic performance measurement in a healthcare organisation: A multiple criteria approach based on balanced scorecard. Omega, 40(1), 104-119.

Knüpfer, A., Rössel, C., an Mey, D., Biersdorff, S., Diethelm, K., Eschweiler, D., ... & Nagel, W. E. (2012). Score-P: A joint performance measurement run-time infrastructure for Periscope, Scalasca, TAU, and Vampir. In Tools for High Performance Computing 2011 (pp. 79-91). Springer Berlin Heidelberg.

Koufteros, X., Verghese, A. J., & Lucianetti, L. (2014). The effect of performance measurement systems on firm performance: A cross-sectional and a longitudinal study. Journal of Operations Management, 32(6), 313-336.

Melnyk, S. A., Bititci, U., Platts, K., Tobias, J., & Andersen, B. (2014). Is performance measurement and management fit for the future?. Management Accounting Research, 25(2), 173-186.

Searcy, C. (2012). Corporate sustainability performance measurement systems: A review and research agenda. Journal of business ethics, 107(3), 239-253.

Speklé, R. F., & Verbeeten, F. H. (2014). The use of performance measurement systems in the public sector: Effects on performance.Management Accounting Research, 25(2), 131-146.

Zaman, A. U., & Lehmann, S. (2013). The zero waste index: a performance measurement tool for waste management systems in a ‘zero waste city’.Journal of Cleaner Production, 50, 123-132.

Zheng, L., Baron, C., Esteban, P., Xue, R., Zhang, Q., & Sotelo, K. I. G. (2016). Pointing out the gap between academic research and supporting software tools in the domain of the performance measurement management of engineering projects. IFAC-PapersOnLine, 49(12), 1561-1566.         

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