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Discuss about the strategic performance management basing on Aussie Healthy Foods Company.
This essay focusses on strategic performance management basing on Aussie Healthy Foods Company. It provides a highlight of the importance and impact of the performance strategies used to assess the overall performance of this firm (Mone and London 2018). There has been an attempt made with aim of understanding and evaluating the effectiveness attained by performance plan which encompasses motivation of employees as well as ensuring that their operations remain in context to the firm’s strategic objective. Aussie Healthy Foods Company deals with the manufacture of breakfast cereals, sandwich spreads, breakfast beverages, and meat and dairy alternatives.
Aussie Healthy Foods is a company which is located in Australia with its headquarters being in Melbourne in Australia. The Chief Executive Officer (CEO) of the Aussie Healthy Foods is Ms Carter who has been in that position for the last ten years. According to Ms Carter, the company has been performing relatively better for the last ten years which she has been the Chief Executive Officer. The Aussie Healthy Foods deals with products such as breakfast beverages, breakfast cereals, dairy and meat options and finally sandwich spread since the year 1980. In the year 2016, the Aussie Healthy Foods made a decision to reconstruct its performance management system with an aim of improving its performance. Before the Essie Healthy Foods had decided to re-build its performance management system, the employees were being asked by the Company management to set their own performance objectives every year in January. Aussie Healthy Foods was established for the purposes of supplying dietary goods throughout the country (Kerzner 2017). Dietary foods promote a healthy life, minimizes the risk of chronic sicknesses such as cardiovascular disorder, type 2 diabetes and other forms of cancers and finally, it reduces the danger diet-related disorders such as obesity, high blood pressure and high levels of cholesterol. Therefore, due to the demand for healthy foods by the general public in Australia, the company is able to make more profits and to compete effectively in the market with its competitors.
Performance management is a fixation of an organization’s objectives in regard to the skills of its employees, the agreed measures, development plan, competency, delivery of skills and results. Managers work hand in hand with their employees in the process of monitoring, reviewing, and planning the contribution of an employee to the company as well as objectives of their work. Performance management stresses on development, learning and improvement so as to meet the organization’s desired goals by ensuring a labour force that is productive. This process was established six decades due to a dire need to justify payments made to employees in organizations and developing their knowledge and skills (Kearney 2018). Some of the employees happened to be receiving more pay in comparison to their contribution to the company in that their payments outmatched their labour productivity. On the other hand, some employees were unfairly compensated.
Definition of Managing Strategic Performance
Performance Management is the process of determining and evaluating the real results and comparing similar with scheduled outcomes. Performance management stresses on the necessity for continuous improvisation through maintenance of a strong communication network among the managerial personnel and the junior employees (DeNisi and Smith 2014). The system of performance management within an organization connects the employees’ code of conduct and the firm’s set objectives through outlining the performance in the setting of those objectives. Performance management systems involve the process of monitoring by the firm’s management on the attainment of the company’s goals by the junior employees. To ensure an effective monitoring, immediate response on matters regarding the achievement of the company’s goal is required by both the managers and the workers. Individuals’ within the organization should ensure that the give responses regarding matters necessary for the company’s attainment of its goals in advance and also incorrectly as the information is one of the necessities on performance improvement within the organization.
The various theories of performance management include; the expectancy, goal setting, control and justice theories of performance management. The expectancy theory was projected in the year 1964 by Victor Vroom (Cardy and Leonard 2014). Expectancy theory of performance management is grounded on the hypothesis which people adjust their code of conduct within the organization in relation to the anticipated fulfilment of valued set objectives. The theory of expectancy lies beneath the notion that performance is subjective to the expectations regarding future occurrences.
Goal setting theory was projected in the year 1968 by Edwin Locke (Podgórski 2015). Goal setting theory proposes that goals established by an individual worker play a significant part in one’s motivation for an improved performance as workers tend to follow goals which they themselves have set. In case the set goals within the company are not met, goal modification or performance improvement may be undertaken to ensure that the goals are met in the long run.
Control Theory of Performance Management. This theory emphasizes on the control mechanism which is supposed to be adopted at all levels of a firm. An organisation can decide on the form of control to use in attaining desired results. These forms include organizational structure, behavioural controls and performance measurement mechanisms. Control theory holds different control system types. Behavioural Control entails monitoring and evaluating an employee’s actions by the employer on a regular basis in accordance with an organization’s standards and issuance of reward where necessary. Output Control involves control of an employee’s performance through sanctions or rewards after its evaluation in regard to the organization’s standards. On the other hand, Input Control system tends to take control of selection as well as the training process required for fulfilment by an employee. It is upon the organization to select the system which it deems suitable based on the norms, structure, administrative information and policies it upholds thereof.
Importance of performance management
Justice Theory of Performance Management. This theory focuses on the extent in the assessment of employees’ perceptions in accordance to a company’s performance management system (Daniels et al 2011). These performances are influential to behaviour and attitudes of employees which can either pose a positive or negative impact on their performance as well as the company at large. There exists a positive correlation between job satisfaction and organizational justice in that a better employee perception of the company would yield to a higher level of satisfaction of the corresponding employee. An organization has to ensure that organizational justice is practised with an expected yield of loyalty and confidence amongst employees.
Aussie Healthy Foods Company adopted Control Theory by choosing to monitor the behaviour of its employees. Employees developed a negative feeling in return towards the company’s mode of assessment as they viewed it to be coercive. The aspect of justice in an organization postulated by Justice Theory seemed to be violated where employees lost their previous job satisfaction with their perception of their organization changing. This led to poor performance on the part of the company’s production level registering an increase of 160% in its production costs, despite other companies who had adopted the same system registering a reduction in their production costs.
Time wastage is one of the problems at Aussie Healthy Foods on their redesigning of the performance system of management (Buckingham and Goodall 2015). Redesigning of the performance management system facilitated to regular check-in by the managerial personnel than they were before the system redesigning for the purposes of discussions on employees performance. Constant check-in contributed to poor performance within the Aussie Healthy Foods as employees not satisfied. According to the theory of goal setting, individuals would work to their capabilities to ensure better performance if they set their own goals to drive them without constant check-ins by the management.
Wastage of resources is another problem at Aussie Healthy Foods on their performance system restructuring. The resources such as capital and time that are a necessary factor in improving the performance of the organization are being misused instead of being directed towards the business goals achievement. In our scenario, we are told that the management spent a lot of time in holding discussions with the employees regarding their performance. Also, the new system leads to Aussie Healthy Foods to incurring extra costs which exceeded the original cost by 60%.
Theories of performance management
Creation of an action plan
The organisation ought to decide on changes which are relevant to its operation and adopt necessary measures as evaluated. Moving from the present situation to the desired one should adopt a plan developed by the evaluating committee (Tarí et al., 2017). The addressed changes may be important or not, but what matters is the initiation of the company into current technology so as to maintain its competitiveness in the market for its goods and services.
Definition of Goals
Goals and objectives that direct the company should be clearly stated and consistent all along (Halligan et al., 2015). In the case of restructuring the organization’s performance management system, the adopted criteria should be in context to the goals and objectives to avoid change of the organization’s production course. Failure to adhere to stipulated goals would be detrimental to the organization as the efficiency of resources would not be met.
Conclusion
An effective Performance Management System is a predetermining force to an organization’s operations and performance (Shields et al., 2015). A strong bond is built between the employee and employer where both focus on playing the roles allocated to them from the organization and maximizing the welfare of one another in the process. Many people tend to oppose performance management as it exposes their labour productivity to the management. It should be noted that a poor performance management system may be quite adverse to the employees as well as the organization’s operations.
References
Buckingham, M. and Goodall, A., 2015. Reinventing performance management. Harvard Business Review, 93(4), pp.40-50.
Cardy, R. and Leonard, B., 2014. Performance Management: Concepts, Skills and Exercises: Concepts, Skills and Exercises. Routledge.
Daniels, A.C., Tapscott, D. and Caston, A., 2011. Bringing out the best in people. Find away World LLC.
DeNisi, A. and Smith, C.E., 2014. Performance appraisal, performance management, and firm-level performance: A review, a proposed model, and new directions for future research. The Academy of Management Annals, 8(1), pp.127-179.
Kearney, R., 2018. Public sector performance: management, motivation, and measurement. Routledge.
Kerzner, H., 2017. Project management metrics, KPIs, and dashboards: a guide to measuring and monitoring project performance. John Wiley & Sons.
Mone, E.M. and London, M., 2018. Employee engagement through effective performance management: A practical guide for managers. Routledge.
Podgórski, D., 2015. Measuring operational performance of OSH management system–A demonstration of AHP-based selection of leading key performance indicators. Safety science, 73, pp.146-166.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., Johns, R., O’Leary, P., Robinson, J. and Plimmer, G., 2015. Managing Employee Performance & Reward: Concepts, Practices, and Strategies. Cambridge University Press.
Tarí, J.J., Pereira-Moliner, J., Pertusa-Ortega, E.M., López-Gamero, M.D. and Molina-Azorín, J.F., 2017. Does quality management improve performance or vice versa? Evidence from the hotel industry. Service Business, 11(1), pp.23-43.
Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the public sector. Routledge.
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