Essay: Control Process And Performance Management In Organizations.

The Control Process and its Importance in Organizations

Question:

Discuss about the Organizational Control Process.

The control process is a continuous or on-going organizational process to monitor and evaluate the performances of the employees. This process is the direction of the organizational control that directs the employees for the achievement of the organizational goals and objectives. The control process drives from the strategic plans and goals of the organization that is embedded in the each level of hierarchy. This is a forward looking process that is an important part of the performance management of the employees (Cliffs Notes, 2016). This essay will provide an understanding of the control process used in the organizations by identifying and analyzing different steps or elements of the control process and its contribution to the performance management of the employees within the organization.

The control process is a performance management process that involves collecting information about the organizational processes, people, group of people, and systems in order to make appropriate decisions about these. This is a functional organizational process for controlling the performances of the individuals that arise from the strategic plans and goals. This is reviewing and evaluating the performances of the processes, people, and systems against the established performance metrics or standards. The control process is important for the organizations to direct the organizational human resources, processes, and systems to works as per set vision, mission statement, goals, values, and strategic plans for the achievement of the business objectives and targets (Boundless, 2016). This has four steps- establishment of standards, measurement of performances, comparison of the performances, and corrective actions. On the basis of the control steps, there are five elements of the control process including setting of the performance standards, measuring actual performance, comparing actual performance with standards, analyzing deviations, and taking corrective action.

(Source: Steps in Control Process)

Establishment or fixing of the performance standards or measures is the first element of the control process that provides a basis to set the performance criteria or measurements for comparing with the activities or performance levels of the organizational processes, systems, and workforce or employees (Griffin, and Moorhead, 2013). These standards are performance metrics or benchmarks that are derived from the strategic plans or goals and will assist to measure the performances of the employees against the set standards. The standards may be qualitative (improving labor relations, brand reputation and goodwill, quality of products, and motivation level of the employees) and quantitative (cost incurred, revenue earned, units produced and sold, amount of inventory, and time taken in performing tasks). The standards may be tangible (clear, concrete, specific, measurable, numerical standards, monetary, physical, or time standards) and intangible (desirable attitudes, high morale, ethics, and cooperation). The performance standards or metrics will measure the performances of the employees on the basis of sales targets, production targets, gross profits, safety records and work attendance goals achieved or not (Masterson, 2017).  

The second element of the control process involves measurement of the actual performance by using the measurement techniques, such as personal reports, customer feedbacks, sample checking, and personal observation, and comparative statistical analysis (Reimer and Houmanfar, 2017). The performance reports, such as gross profit ratio, debt turnover ratio, current ratio, and return on investment will be used for measuring the performance of the employees. The actual performance will be measured against the set performance standards for detecting the deviations or performance gaps that will determine whether the work or tasks are continuing in the right direction as per strategic plans and goals or not. For example, the formal reports are prepared by the managers of the most of the organizations. The qualitative performance, such as human relations, employee morale, customer attending, and service quality offered will be measured through the customer surveys, feedback reports, or psychological tests. While, on the other hand, the sales reports, numerical surveys, oral reporting, feedback reports, and written reports will be used to measure the quantitative performances of the employees (Venkatesh, 2015).  

Steps in the Control Process

The third element of this process is comparing the actual performance of the employees or individuals against the expected performance standards in order to find the performance gap or deviation of the performance. After reviewing and evaluating the sales reports, customer feedbacks and survey reports, and personal observations, the evaluator or managers identify whether the actual performance meets, exceeds or fall short of the performance standards that will determine the variation or difference in the form of deviation or performance gaps (Chand, 2013). PERT, Budgetary control, Benchmarking, Balance Score Card, Goals-setting, and Management by Objectives are some important performance measurement techniques. For ex- the customer feedback or survey reports will measure and analyze the customer services delivery, numbers of visits, customer’s handling capability, and customer satisfaction or dissatisfaction. The sales reports or statistical analysis will show the level of profits, revenues, sales targets, production outputs achieved that will be compared with the set performance goals or targets.  The balance scorecard method will examine their performances by giving the grades or performance marks on their performances on the basis of set criteria (Griffin, Neal, and Parker, 2007).

The fourth element of the control process is to find-out the deviations and causes for the deviations that will be analyzed to adopt the ways for the improvement of performance or correction of the areas for improvement. Obsolete machinery, defective processes, failure or breakdown of the production technologies and machineries, defective or low quality material used, and defective or unfavorable physical conditions are major causes of deviation. Critical Point Control and Management by Exception are such areas for identifying and analyzing the performance gaps or deviations. The deviations may be either positive or negative (Banerjee, 2015). The positive deviation occurs when the actual performance is better or exceeds than the performance standards or measures, while the negative deviation takes place when the actual performance is lower or falls short of the performance standards.  The small deviations may be ignored and in opposite to this, the major deviations will be addressed and reported to the top management for taking the corrective actions.

The final element of the control process is taking the corrective actions and follow-up after analyzing the deviations and causes for the deviations. If the deviation or performance gaps are small, will be underestimated or negotiated (iEdu Note, 2016). In opposite to this, if these are higher or exceeds of the acceptable limits, then these will be reported to senior management so that the corrective actions should be taken by the management. The corrective actions may include providing better direction, motivation and participative leadership, changing culture and working procedures, changing performance standards, setting of new goals and strategic plans, better training, use of technological advancements and innovation, health and safety of the workplace, productive and learning culture, Autonomy and flexibility of the working practices, reducing breakdown or failure of machineries, and standardized organizational processes. The corrective actions should be well balanced by avoiding over controlling of the performances (Bratianu and Constantin 2015). After taking corrective actions, the management should follow-up to find-out whether the corrective actions are taken or not. The causes of deviations will be removed for ensuring better performance against the performance standards.

After analyzing the controlling process and its elements, it is advised for the Australian companies or MNCs to use the control process as a tool for improving the performances of the organizational processes, systems, and employees to the great extent (Perkins and Arvinen-Muondo, 2013). In order to create an effective control process, the companies should determine whether the vision, mission statements, and objectives will assist to determine the goals and strategic elements in order to meet the strategic goals. The reviewing the controlling processes will assist to look into the supply chain management operations, production processes and technologies, sufficient resources, communication technologies, training and development programs for the effectiveness of the organizational functioning.

References

Banerjee, A. (2015). 4 Main steps in Control Process in Management. [Online]. Available at:  https://www.preservearticles.com/2012051932638/4-main-steps-in-control-process-in-management.html. (Accessed: 6 May 2017).

Boundless (2016). The control Process. [Online]. Available at: https://www.boundless.com/management/concepts/the-control-process-0-7331/. (Accessed: 6 May 2017).

Bratianu and Constantin (2015). Organizational Knowledge Dynamics: Managing Knowledge Creation, Acquisition, Sharing, and Transformation: Managing Knowledge Creation, Acquisition, Sharing, and Transformation. London: IGI Global.

Chand, S. (2013).  Managerial Control Process: It’s Characteristics, Importance, Techniques and other Details. [Online]. Available at: https://www.yourarticlelibrary.com/management/managerial-control-process-its-characteristics-importance-techniques-and-other-details/5383/. (Accessed: 6 May 2017).

Cliffs Notes (2016). The organizational Control Process. [Online]. Available at: https://www.cliffsnotes.com/study-guides/principles-of-management/control-the-linking-function/the-organizational-control-process. (Accessed: 6 May 2017).

Griffin, A. M., Neal, A., and Parker, K. S. (2007). ‘A NEW MODEL OF WORK ROLE PERFORMANCE: POSITIVE BEHAVIOR IN UNCERTAIN AND INTERDEPENDENT   CONTEXTS’, Academy of Management Journal, Vol. 50(2), pp. 327-347.

Griffin, R. and Moorhead, G. (2013). Organizational Behavior: Managing People and Organizations. Australia: Cengage Learning.

iEdu Note (2016). 4 Steps in the Control Process in the Business Management. [Online]. Available at: https://iedunote.com/control-process-steps. (Accessed: 6 May 2017).

Masterson, S. S. (2017). ‘Organizational behavior and Performance Management studies’, Journal of Organizational Behavior, Vol. 38(4), pp. 459-612.

Perkins, S. and Arvinen-Muondo, R. (2013). Organizational Behaviour: People, Process, Work and Human Resource Management. UK: Kogan Page Publishers.

Reimer, D. and Houmanfar, A. R. (2017). ‘Internalities and their Applicability for the Organizational Practices’, Journal of Organizational Behavior Management. pp. 5-31.

Venkatesh (2015). Steps Involved in Control Process. [Online]. Available at: https://www.yourarticlelibrary.com/management/controlling/steps-involved-in-control-process/53348/. (Accessed: 6 May 2017).