Linkage between Performance Management and Strategic Management

Introduction. 3

Performance Management System in Asco Car Hire. 4

Linkage between Performance Management and Strategic Management. 7

Performance Management Issues in Asco Car Hire. 7

Flaws in performance management design. 8

Lack of effective communication. 9

Recommendations for Resolving Issues. 9

Conclusion. 11

References. 12

Asco Car Hire cc is one of the major car rental service providers which has specialized in camping equipped 4×4 vehicles in Southern Africa. The company has more than 200 4X$ vehicles and some of those have camping facility. The company is located in Windhoek in the heart of Namibia. It offers new 4X4 vehicles which has the capability to adapt with the exciting as well as harsh roads of Africa. It ensures that all the vehicles are well maintained and serviced before offering those on rent. Asco Car Hire also provides a break down service for 24X7. The company makes arrangement for immediate professional support in this situation. It aims to improve the customer service through professional support always. Additionally, Asco Car Hire provides assistance regarding driving on the Namibian roads. It helps the tourists in anticipating the probable problems and advises them how to handle the vehicle on road. Asco Car Hire has 40 employees who belong to various cultures (Ascocarhire.com, 2014). The workforce includes high skilled technicians and skilled management professionals. With the diverse workforce it aims to provide excellent service to the customers.

Management at Asco Car Hire is extensively focusing on the improving the customer service by capitalizing its human resource in an effective manner. Performance management is a major aspect of the company which focuses on ensuring that organizational goals are met (Aguinis, 2009). This paper emphasizes on analyzing the current performance management system in Asco Car Hire. It will indentify the link between performance management and strategic planning in the company. Therefore, two major performance management issues will be recognized which needs to be improved. At the end of this paper, recommendation will be provided in order to achieve the organizational goals and objectives.

Performance management aims to define the standard of desired level of performance of an employee, evaluate the employee performance and provide feedback of the employee performance (Cadwell, 2000). In the rapidly changing business environment, organizational performance needs to be improved continuously through an efficient performance management system. Performance management in Asco Car Hire is considered to be one of the challenging tasks of the Human Resource Development. This section has focused on providing an overview of the existing performance management system at Asco Car Hire. The major objectives of the human resource for setting up an effective performance management system at Asco Car Hire are:

• Clearly defining the job roles and responsibilities of individual.
• Comprehending the performance measures for each job role.
• Developing an efficient and fair performance evaluation system.
• Designing recognition and reward programs for employees.
• Offering development opportunities to the employees.
• Improving the overall organizational performance (Harbour, 2009).

The performance management system in Asco Car Hire has been designed by the senior human resource professional in order to ensure organizational performance objectives are met. The major aspects of the performance management system at Asco Car Hire are discussed in this section.

The first phase of the performance management system at Asco Car Hire is to set goals of the system. In this company, the major performance management goal is to enhance customer satisfaction through improved performance of the employees. It is important to align with the strategic goal of the organization in order to develop a performance oriented culture. Therefore, the factors need to be achieved which are essential for achieving the ultimate goal of improving organizational performance.

Performance Management Issues in Asco Car Hire

This is one of the most crucial phases of performance management system at Asco Car Hire. In this phase, the job description of the employees must be defined so that the employee gets clear idea about the responsibilities. The job description of an individual is lined with the organizational plan. The major performance objectives of that year is identified and defined in the planning phase. This will be the performance measure for evaluating the performance of the employees. One of the most difficult tasks is set objectives and measurement for evaluating the performance. Indictor of success will help in understanding whether the employee has outperformed or underperformed in that particular year. The objectives clearly represent the entire range of duties that need to be performed by the employees. Additionally, in the planning phase, the career development opportunities are identified and defined which will be a motivating factor for the employees as it is an important aspect of long term career planning (Venkateswara Rao, 2004).

In order to develop an effective performance management system, Asco Car Hire is emphasizing on monitoring of the system. It focuses on supervising the daily performance of the employees along with their progress. The monitoring task is responsible for observing the result of the effort put together by the workforce. It will also analyze the behavior of individuals and the dynamic of the team which will affect the work environment. The human resource management assesses the regular progress to check whether it will be able to meet the performance objectives. If it is found that the progress is not at par with the desired level, barriers which are preventing the employees from achieving the performance objectives are identified. Feedback is shared with the employees regarding the progress. Changes in the working practice or conducting training program can be considered in this phase for meeting the performance objectives set in the initial phase of the performance management system (Ferreira and Otley, 2009).

In the fourth phase of the performance management cycle, the performance of individual is assessed for the specific period. In this phase, the employees will receive a report regarding their accomplishment against their performance objectives. The management of Asco Car Hire conducts a performance appraisal meeting. Issues are discussed with the employees. Additionally, training needs are identified and training and development plan is designed. Reward and recognition program at Asco Car Hire assist in recognizing the outperformers of the company. The performance management system is reviewed by assessing whether the performance objective has been achieved or not. The major barriers which leaded to create a gap between the organizational performance and performance objectives are indentified and measures are taken to rectify it.

As the performance management system is a cyclical process, it continues with the aim to improve the overall organizational process at Asco Car Hire.

The performance management system and strategic management at Asco Car Hire has strong linkage. The performance management system is developed on the basis of the strategic orientation of an organization. Asco car Hire has employed diverse workforce in order to optimize the benefits of the people with specialized knowledge form different cultural background. Strategic management emphasizes on formulating, implementing as well as valuating activities for achieving the organizational objectives. Asco Car Hire has the strategy of ensuring the leading position in car rental service in Southern Africa through improved and differentiated service. Asco Car Hire thrives to provide best car rental service in the region through deploying its experience and high skilled professionals. Human resource is considered to be one of the most important assets for fulfilling the organizational goal. Improved organizational performance is driven by an effective performance management system. In Asco Car Hire, performance management system is a part of the strategic human resource management. In the performance management system goals are set along with the specific performance objectives. The performance objectives are developed on the basis of the strategic orientation of the company. The performance measures are aligned with the strategic vision of the organization. The performance management system at Asco Car Hire ensures that the work plan design for the employees support the strategic plan of the company. Hence, it can be concluded that the performance management system is significantly linked with the strategic planning of the organization.

Flaws in performance management design

Analyzing the performance management system of Asco Car Hire, it has been observed that there are some limitations of the system. The performance management system at Asco Car Hire focused on improving the overall performance of the diverse workgroup in order to provide better service to its customers. In this section, major performance management issues in Asco Car Hire are indentified and discussed:

One of the major limitations of the performance management system at Asco Car Hire is flaw in the design of performance management system. In this system, performance objectives are indentified which act as the evaluation criteria for the employees. The company has not been able to establish a strong connection between the objectives of individuals with the organizational goals and objectives. The employees are not able to understand the importance of their job roles and responsibilities in context of the organizational goals (Panda, 2011). It is one of the biggest limitations of the performance management system at Asco Car Hire. The performance objective and work plan of Asco Car Hire have only emphasized on the inputs of the employees. But, it has not clearly defined the output or results of those behaviors of the employees. Moreover, the performance objectives of Asco Car Hire are vague and not efficient for ensuring that the overall organizational performance will be improved. The performance objectives are not specific and difficult to measure (Halachmi, 2011). Sometimes it has been observed that the objectives are difficult to attain as the goals are not realistic. The performance indicators are not defined clearly in the performance management system of Asco Car Hire. Most of the time, opinion of the supervisor is considered for evaluating performance of the company. Hence, there is a chance of human error in measuring the performance of the employees due to human bias (Kwok and Tam, 2011). These are the major flaws of the performance management design at Asco Car Hire.

Effective communication is an essential aspect of successful performance management system. It has been observed that there is a communication gap between the management and the workforce at Asco Car Hire. The company has a diverse workforce and effective communication skill is required for capitalizing the benefits of diverse workgroup. As the employees belong to different cultural backgrounds, there is a lack of integration. Moreover, it has been indentified that most of the employees have no clear idea regarding their specific job responsibilities and impact of their activities in achieving organizational performance. Additionally, it has been observed that the employees do not give importance to the performance objectives as those are not clarified to them. The major reason behind the ineffective of the performance management system at Asco Car Hire is lack of effective communication. Management of the company has not been able to comprehend the job roles are responsibilities of individuals. Additionally, the performance objectives and performance measures are not communicated clearly to the employees. Due to lack of integrity among the work force, the communication system of the organization is not strong. Hence, the employees have not been able to clarify their doubts regarding performance objectives and performance indicators (Sharif, 2002).

Two major performance management issues in Asco Car Hire have been identified in the above section. Few recommendations can be made for resolving the identified issues in order to improve the overall performance of the company. The following recommendations can be considered for minimizing the limitations of the existing performance management system at Asco Car Hire.

• The job description of the employees must be reviewed in order to check whether it is appropriate for achieving the organizational goal. Changes must be made in terms of job responsibility and job design according to the objectives of the organization. This will helps in achieving the desired level of the performance.
• The job description of an individual must be linked with the strategic plan and organizational goal. Therefore, it must be clearly defined so that the employees understand their job responsibilities in context of the organizational goal. The alignment with the organizational strategy will be effective for achieving the goals of Asco Car Hire.
• The job description and the link with the strategic goal must be defined clearly and communicated to the employees. It is essential to clarify these things in order to enhance the overall performance of the organization.
• The performance objectives must be appropriate and defined in clear language. For Asco Car Hire, it is important to develop SMART performance objectives. It means the performance objectives must be Specific and clearly state what needs to be done by whom and how it can be achieved. The performance objective must be Measurable so that it can be understood in terms of cost, quantity or quality etc. While developing the performance objectives; it must be ensured that the goals are Attainable by the workforce. The performance objective must be Realistic as well as Time-Bound so that it can be reviewed after certain time period (Kagaari, Munene and Ntayi, 2010).
• Key performance indicators must be defined clearly in order to evaluate the performance of the individuals. Appropriate and scientific rating skills and performance measurement tools must be developed in order to effectively evaluate employee performance (Johnson, 2006).
• Biasness of the supervisor may affect the appropriate evaluation of the employee performance. Managers must be aware of the probable biasness of the supervisors in the evaluation system. Therefore, in the assessment process, they must focus on eliminating this factor.
• Training needs of the employees must be identified clearly with the aid of performance management process. Thus, the overall performance of Asco Car Hire can be improved.

Conclusion

This paper has focused on studying the performance management system of Asco Car Hire. The existing performance management system of the company has been discussed and analyzed. It has been found that the major objective of the performance management system of the organization is to improve the quality of service through enhancing the performance of the employees. In this paper, two major limitations of the performance management system of Asco Car hire have been identified. It has been observed that there are some flaws in the design of the performance management system. It has not been able to identify the performance objectives clearly. Performance indicators are not formed which will help in evaluation of the employee performance. Additionally, lack of effective communication has found to be a major problem for the company. The employees are not communicated regarding the performance objectives and indicators. This paper has provided some solutions in order to overcome these major issues. Recommendations are provided which will assist in achieving the organizational goal.

References

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Sharif, A. (2002). Benchmarking performance management systems. Benchmarking: An International Journal, 9(1), pp.62-85.

Venkateswara Rao, T. (2004). Performance management and appraisal systems. New Delhi: Response Books, a division of Sage Publications.