COLLEGE OF BUSINESS

BSMH 5043 : PERFORMANCE MANAGEMENT

INDIVIDUAL ASSIGNMENT

IMPLEMENTATION OF PERFORMANCE MANAGEMENT TOOLS

PREPARED BY :

SASIKUMAR A/L GENGATHARAN 822424

 TABLE OF CONTENT
TITLE PAGE
ABSTRACT………………………………………………………1
1.0 INTRODUCTION………………………………………….2
2.0 LITERATURE REVIEW…………………………………4
2.1 TOTAL QUALITY MANAGEMENT (TQM)………………………….4

2.2 INTERNATIONAL STANDARDIZATION OF ORGANIZATION…4

2.3 BALANCED SCORECARD…………………………………………...

2.4 SIX SIGMA……………………………………………………………………

2.5 360 FEEDBACK…………………………………

2.6 KEY PERFORMANCE INDICATORS

3.0 DISCUSSION
4.0 CONCLUSION
REFERENCES

ABSTRACT

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Increasing global competition in the world economy forces firms to sharpen their
functionality and processes in order to gain competitive advantages. For this reason,
many firms develop management systems. These methods provide interdisciplinary
approaches including statistics and operational research which encompasses structure
of the firm, market conditions, consumer needs and changes in economy and
technology. The overall performance of a firm is mostly dependent on the individual and
group performance of the organization. Incentivizing management tools are typically
implemented to improve performance, but due to motivation crowding they may
decrease innovation and performance. In this study, depth reviews on performance
management tools are reviewed.

1.0 INTRODUCTION

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With the increased global competition, organizations are forced to produce high quality
products and continuously improve themselves to survive (Manders, 2015).
Performance is a core for any organizations to achieve its goals. It incorporates results
accomplished, or achieved through commitment of people or groups to the organization
strategic objectives. Performance management provides systematic interface between
organizational strategy, assets, and process. It is a comprehensive management
process encircling the improvement, by guaranteeing that everyone gets it where the
organization and what it requires to meet stakeholders needs. Performance
measurement is an integral part of performance management, but it is not enough
simply to measure. There were a few traditional approaches to appraise the
performance but then it fails for several reasons. For example, traditional methods in
measuring performance often do not help to increase understanding on the core issues
which leads to the current performance. Therefore, the weakness that can be found in
traditional performance measurement has driven the organizations to implement
performance management system.

According to Cardy (2004), Performance Management system can be defined as a core

for the issues that related to the people management in an organization. The
implementation of performance management system has few benefits which help the
organization to use or create its strategy. Performance management system has a few
tools under it which is used to measure the performance, which known as Performance
Management Tools. The tool designed to help managers write accurate job profiles and
expectations, create relevant objectives that align with the company's goals and
mission, document performance, and write appraisals. There are a several kinds of
tools that can be used to measure performance such as performance appraisals, 360-
degree feedback, reward and recognition programs, lean management, Six Sigma,
TQM, Key Performance Index (KPI), Balance Scorecard (BSC) and so on. In this highly
competitive global market, organizations are utilizing performance management tools to
guide their business, improve performance, and acquire sustainable results. Adopting
performance management tools align people towards organization’s mission, strategy,
and processes, and also influences financial measures.
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In this study, the implementation of performance management tools will be discussed.
Total Quality Management (TQM) is one of the performance management tools
to improve the best of an organization's outputs, together with goods and organization’s
services, through persistent enhancement of internal practices. The International
Standardization for Organization (ISO) ensures that merchandise and services are
safe, dependable and of good quality. In term of business, they are strategic tools that
reduce cost by way of minimizing waste and errors and growing productivity. In addition,
the Six Sigma make bigger in performance and reduce in procedure version lead to
defect discount and improvement in profits, employee’s morale, and satisfactory of
products or services. The Balance Scorecard a semi-standard structured report that can
be used through managers to maintain song of the execution of things to do with the aid
of the workforce inside them manipulate and to monitor the consequences arising from
these actions. Finally, Key Performance Indicator (KPI) is a measurable cost that
demonstrates how correctly an agency is attaining key business objectives.
Organizations use KPIs to evaluate their success at attaining targets.

2.0 LITERATURE REVIEW

2.1 TOTAL QUALITY MANAGEMENT (TQM)

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Merih Arikkok (2017), analyses the thought of Total Quality Management (TQM), the
vital elements of TQM, challenges in imposing TQM and additionally provide an
explanation for about Six Sigma as an extension to TQM. As for the definition, Merih
describes TQM as management exercise in the organization that geared the corporation
to meet the patron requirements consistently. The researcher in addition clarifies that in
order to make TQM successful, it requires the participation and commitment from all
and sundry in the organization. In time period of the necessary issue that have to have
by means of the organization throughout the implementation of TQM are doesn’t
depending on the traditional method. Quality administration of an organization can’t be
relying only on the great professionals or even typical fine manipulate techniques. Merih
(2017) noted that usual strategies such as inspection, tight standards and placing extra
stress on employees can’t maintain the fantastic administration of the organization. It
requires full dedication from the top management to the decrease management. The
challenges in enforcing TQM are the employer need to invest on time, financial sources
and training for the current workforce specially these have sturdy organizational culture,
which can lead to terrible influence on body of workers who changing their attitude.

2.2 INTERNATIONAL STANDARDIZATION OF ORGANIZATION

Basak Manders (2015), analyses on the implementation and effect of ISO in dealing
with overall performance management. Manders describes ISO as an instruction and
tools for employer to make sure that their carrier and product meet the customer’s
requirement and also extended consistently. In addition, it also helps the agency to
exhibit capacity to shipping services to fulfill customer’s satisfaction. In term of
implementation of ISO in organization, the researcher clarifies that implementation of
ISO had triggered inconsistent in economic performance. However, he additionally
mentions that there are some tremendous effects from the implementation of ISO such
as ISO 9001 certification which helps corporations to expand their revenues. It normally
will increase efficiency and productivity, and is probably to provide an edge over
competitors. The process method focuses on the following areas as mentioned by
means of ISO 9000, 2012 methods for the administration of an employer management
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responsibility. The compliance of ISO 9000 consists of procedures referring to strategic
planning, organizing policies, placing objectives, ensuring communication, ensuring
availability of assets for the different organization’s fantastic objectives and desired
consequences and for management reviews. They encompass measuring, monitoring,
auditing, performance evaluation and enhancement procedures e.g. for corrective and
preventive actions. Measurement tactics are regularly documented as a quintessential
section of the management, resource and cognizance processes; whereas analysis and
enhancement tactics are treated often as autonomous strategies that engage with other
processes, obtain inputs from dimension results, and send outputs for the enhancement
of those processes.

2.3 BALANCED SCORECARD

Doreen (2016), analyses on the balanced scorecard in time period of its implementation
and performance. Doreen has described the definition of Balanced Scorecard by means
of referring the students and academicians, point out that Balance Scorecard is an
administration and planning tool which hyperlink business activities, vision, mission and
it also display the overall performance of the organization. In addition, the Balance
Scorecard can measure the overall performance in 4 dimension in an agency which are
financial, internal commercial enterprise processes, consumer and improvement
perspectives. In time period of implementation of Balance Scorecard, Doreen has
analyses the application of Balanced Scorecard in commercial banks in Kenya. Doreen
mentioned that the balanced scorecard has extended enterprise output. But then, it
located that some financial institution has not easy issues to put into effect these tools in
their respective strategies. The issues with Balance Scorecard are it has excessively
more than a few performance indicators, unrealistic expectations and also the personnel
inability to recognize the functions of the Balanced Scorecard.

2.4 SIX SIGMA

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Six-Sigma is a concept that originated from Motorola Inc. in the USA round 1985. At the
time, they were going through the hazard of Japanese opposition in the electronics
industry and needed to make drastic upgrades in their satisfactory stages
(Adams,1998). Schroeder (2008) defines Six Sigma as an organized, parallel-meso
structure used to limit variation in organizational procedures with the aid of employing
improvement specialists, a structured method, and customer-oriented performance
metrics with the purpose of accomplishing strategic objectives. Six Sigma is uniquely
driven by means of shut perception of consumer needs, disciplined use of facts, data,
and statistical analysis, and diligent attention to managing, improving, and reinventing
business processes. Six Sigma has won important attention in the tutorial and
commercial enterprise field due to its financial impact and degrees of client pride (Yildiz,
2016). Companies which have adopted Six Sigma have pronounced increase monetary
performance in short term, value reduction, enhancement in client delight and fee
saving (Yildiz, 2016).

2.5 360 FEEDBACK

360 feedbacks are distinctly a new idea that includes a variety of sources such as
peers, clients, subordinates, supervisors and even from self-evaluation (Hosain, 2016).
This fact is used to discover the strengths and weaknesses of an employee to maximize
productiveness and also, to assist them to apprehend expert role involving those skills
(Baroda et al., 2012). In 360 feedback method, there are extra than one party involved
such as peers, supervisors, subordinates and customers. The survey frequently
consists of computerized and net based totally responses that are summarized in to
character reviews to be rated. When they meet the supervisors, they share the facts
that they feel pertinent for their very own comfort (Baroda et al., 2012). Therefore, the
method is the count number of debate to the practitioners and researchers. One finds
out about found extensive correlations between 360-degree feedback and traditional
overall performance rankings whilst every other study concluded that multi-source
comments leads to “generally small” performance upgrades on subsequent scores
(Hosain, 2016). However, integrating 360 degree appraisals with behavioral potential
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improves the ranking reliability. Most of the literature research advocate that
corporations must cautiously check the tentative charges of the method, focal point on
the feedbacks very definitely on concrete goals, notably educate the personnel who are
supplying and receiving feedbacks and no longer matter completely on 360 feedbacks.
The corporation the usage of this approach need to also make certain that it is
productive, impartial and purpose oriented. Like a full circle, 360 feedback help
managers to get a transparent view of have an effect on they are having in their working
space. As many businesses and managers operate in poor feedback environments, the
first publicity to this method may be accompanied by way of some diploma of angst on
the phase of each enterprise and worker (Hosain, 2016). When employees can expect
that feedback they receive will be used simply for their own developmental gain they
tend to be more receptive to the feedback provided. Rather than receiving the
comments from a defense posture, they are more apt to be given the remarks as a “gift”
from these the have an impact on (Maylett, 2009). When 360-degree remarks have
administrative penalties like pay rise, promotions, bonuses or possible layoffs,
employee might also be more aggressive to it rather than accepting it as it is. On the
other hand, remarks carriers tend to be less probable to supply honest, unbiased and
honest comments if they understand that it may affect someone’s pay or advertising
they are shut to.

2.6 KEY PERFORMANCE INDICATORS

Markic (2017) analyzes the implementation of the Key Performance Indicators (KPI) in
the public sector. two The researcher has referred to Chalmers (2008) to define
Performance Indicators (PI), which he describes PI as a measurement device which
gave records and statistics, it also permits the company to make comparisons between
fields and supply information on the how many percent has been whole to meet the
objective. According to the researcher, there are blessings and hazards of performance
indicators. Firstly, the performance indicator can assist the organization to discover the
strengths, weaknesses and effectiveness of the organization. Secondly, it can help the
corporation to manage its program and operations extra effectively. Thirdly, the
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Performance Indicator can furnish facts for making judgments and decision-making.
Whereas, the hazards of performance symptoms are it is now not beneficial if there is
missing of information. Secondly, the performance indicator do not grant a clear
indication of motive and impact or of the extent to which a software or company might
be responsible for producing the consequences observed. Finally, inappropriate
performance indicator can lead to aim displacement and behavior that detracts from
instead than enhances performance. Other than that, the researchers has explained
about the implementation of performance indicator in the public sector, where it
supports increased communication within and across branches of the public sector,
increase discussion about the effects of things to do and services and assist in making
budgeting decisions. In addition, the public quarter at all tiers have used the
performance indicator for assessing their overall performance and the effectiveness of
more modern social programs. The decision-makers ought to be acquainted with
situations when performance indicators be used and when not, when they facilitate the
work and when they impose pointless burden, when they provide stakeholders extra
information or when they lead to goal displacement and conduct that detracts from
instead than enhances performance.

3.0 DISCUSSION

The assessment of the literature recommended that there are several TQM practices
that can be acknowledged as being crucial to the successful implementation of TQM in
manufacturing industries. The TQM practices include top-management commitment
(TMC), benchmarking, internal quality information use, employee involvement (EI),
training, empowerment, supplier QM, statistical process control usage, design QM,

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customer focus, supplier performance, and product quality. With the recent
advancement in technology and increase in competition in the market due to
globalization and severe competition challenges, TQM practices shift attention from the
manufacturing sector to the service sector. In view of its holistic approach to quality,
TQM is generally considered as a framework that supports service management.
Therefore, TQM has been extensively applied in the service industries as well in recent
years.

ISO management system standards (MSS) help organizations improve their

performance by spelling out repeatable steps that organizations deliberately implement
to accomplish their goals and objectives, and to produce an organizational culture that
automatically engages in a continuous cycle of self-evaluation, correction and
improvement of operations and processes through heightened employee awareness
and management leadership and commitment. An effective management system
through ISO enhances more efficient use of resources and improved financial
performance. Furthermore, risk management and protection of people and environment
could be managed efficiently. It also increases capability to bring consistent and
improved services and products, thereby increasing value to customers and
stakeholders. Audits are a vital part of the management system approach as they
enable the firm to ensure their achievements meet their objectives and demonstrate
conformity to the standard.

A balanced approach to employee performance appraisal is an effective way of getting

a complete look towards employee's performance. Too often, employee performance
plans with their elements and standards measure behaviors, actions, or processes
without measuring the results of employees' work. By measuring only behaviors or
actions, an organization might find that most of its employees are appraised as
outstanding when the organization as a whole has failed to meet its objectives. Through
balanced scorecard approaches at the organizational level, and through sharing the
results with supervisors, teams, and managers, the top managements are providing the
information needed to align employee performance plans with organizational goals. By
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balancing the measures used in employee performance plans, the performance picture
becomes inclusive.

Six Sigma is a business improvement methodology that aims to maximize shareholder

value by improving quality, speed, customer satisfaction and costs. Effective
implementation involves cultural changes in organizations, new approaches to
production and servicing customers and a high degree of training and education of
employees, from upper management to the line worker.

360 feedback method provides well-rounded feedback from peers, reporting staff,
coworkers and supervisors and can be a definite improvement over feedback from a
single individual. Multi-rater feedback makes team members more accountable to each
other as they share the knowledge for their performance. While the bulk of the
responsibility falls on the employee, employers are responsible for providing an
environment in which employees were encouraged for growth needs. Multi-rater
feedback provides excellent information to an individual about the needs to do to
enhance their career. The "horns and halo" effect, in which a supervisor rates
performance with bias also minimized. Moreover, the approach enables the individual to
improve the quality, reliability, promptness, and comprehensiveness of their products
and services. However, proponents may lead participants to expect too much from this
feedback system in their efforts to obtain organizational support for its implementation.

KPI highlights poor performance and conduct a root– cause analysis to make sure that
the poor performance does not continue. When progress has been reached for
individual KPIs, considerations to link processes are vital to ensure effectiveness of
outcome. As processes change, there is a need for certain amendments in KPIs. It
explains adding meaningful KPIs and remove or modify the reporting of those that
aligns with the best practice results as processes improves.

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5.0 CONCLUSION
As a conclusion, each performance management tools supply organizational leaders
with a device to translate their organizational mission and imaginative and prescient and
lift out their strategies. It additionally communicates their strategic course of the
company to the personnel and to the boards of directors. Ultimately the tools are
designed to create and sustain an organizational culture of continuous improvement
and performance excellence. The groups must focal point on prevention instead than
detection closer to excellent errors. Detection can manifest solely after the ultimate
output has taken vicinity and prevention can assist the enterprise restoration errors at
previously tiers which store time, money, and effort. The Total Quality Management
(TQM) is no longer something we can impose on a business enterprise from outside.
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 The organizations have to be inclined to adopt TQM, internalize it and continue to be
entirely committed throughout the organization. Organizations that have been applying
the balanced rating card as a approach implementation tool provides to the growing
body knowledge of balance rating card utility in the monetary offerings sector. Taking
into account the excessive amount of exclusive metrics, the management of the
enterprise is facing difficulties with selection of the proper key overall performance
indicators; that should be followed and monitored. It is realized that businesses ought to
no longer be profitable if they do not have a excellent overall performance management
system. Each supervisor needs to devise very own gadget of managing performance.
While some norms of overall performance administration are specific others are now not
so clear even to the managers. It is stated that standards or expectations that outline
desirable performance may be generally understood however are hardly ever specific.
Performance management is a holistic, generally participatory and purpose congruent
manner of managing and supervising managers at work. It is understood as a
systematic, prepared method to managing and moneymaking performance via
producing and sustaining tremendous employer-employee motivation. Finally, overall
performance facts and comparison effects usually have a retroactive character, while
they could have greater of a preliminary and concurrent character, allowing for a better
link between planning and controlling.
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tier one commercial banks in Kenya(Master's thesis, University of Nairobi, 2016). Kenya: School

of Business, University of Nairobi.

Hosain, M. S. (2016). 360 Degree Feedback as a Technique of Performance Appraisal: Does it

Really Work? Asian Business Review,6(1), 21. doi:10.18034/abr.v6i1.779

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Manders, B., & Blind, K. (2015). Implementation and impact of ISO 9001(Unpublished master's

thesis). Dissertation Erasmus University Rotterdam to obtain the degree of doctor in the year.

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doi:https://doi.org/10.1016/S2212-5671(12)00135-9

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