Features of the Performance Management System
A sound performance management system should provide measures that are easy to understand. This allows quick determination of an employee’s progress because complex performance measurement criteria make performance evaluation challenging. The features I recommend for the Disc Drives Inc. (DDI) performance measurement system revolve around productivity, including quantitative, qualitative, efficiency, and organizational performance metrics. Quantitative metrics are numerical measurements that help track and compare to get ideas about how employees are doing (Kucsma, 2019). Additionally, the numerical data will allow the identification of trends and patterns to check progress toward the organization’s goals. Moreover, quantitative metrics will measure business performance and provide valuable insights to make strategic business decisions. It will also help understand business revenue drivers’ promotion of customer experience and enhance satisfaction. Therefore, the performance measurement system must choose the correct data, use the right formulas, and draw specific conclusions.
Qualitative metrics are necessary to evaluate how well the employees perform. These metrics use subjective data, which management utilizes to track employee performance toward business goals (Kucsma, 2019). Qualitative metrics in DDI will rely on peer and customer feedback and will be critical in making objectives more tangible using values, weights, and percentages. They will be necessary in providing insights that are not necessarily numerical. They use descriptive data based on observations, feelings, and interpretations.
Efficiency metrics will consider the quantity and quality of an employee’s work. Efficiency metrics use performance data to measure the relationship between the employees’ work and the execution costs (Siska, 2018). Employees who incur minimal costs to complete tasks are more efficient than those who use many resources. A performance measurement system must include efficiency metrics, which must be considered when promoting employees. Therefore, they inform managers’ decisions.
The performance measurement system must have organizational performance metrics. These metrics measure the performance of a larger group of employees and, thus, the performance of the entire employee (Siska, 2018). The whole workforce’s performance is the metric that an organization can gauge and compare. It will measure profits, stock prices, and sales to determine how DDI competes against other firms.
Changes Required in Goal Setting, Feedback/Appraisal, and Reward System
The changes that should be implemented in goal setting of the performance measurement system include allowing the management to set dynamic goals. Additionally, it should enable goal modification to allow employees to grow their ambitions and competencies (Comighud & Write, 2021). It should also allow the setting of a variety of goals in a range of formats. This will enable tracking employees’ progress towards critical milestones, such as boosting motivation and engagement. It should encompass key performance indicators to show the effectiveness of a company in meeting its business objectives. Moreover, it must contain goals in the SMART format to ensure they are clear and can be attained within a given timeframe. The system should allow objectives and key results and break down goals into short-term and long-term periods.
The system should be adjusted to allow real-time feedback for managers to address a problem as it arises. Giving instant and specific feedback enables managers to track how employees progress and improve (Comighud & Write, 2021). Timely feedback will help the organization eliminate unnecessary meetings. Additionally, instant feedback allows the development of a positive feedback culture, which encourages employees to share constructive feedback.
Furthermore, the performance measurement system should have an effective reward system that is performance-based, transparent, and predictive. The feature of being performance-based means allowing better performance to receive better rewards (Comighud & Write, 2021). Rewards based on performance encourage employee performance improvement, thus enhancing their motivation and productivity. Transparency means everyone in the organization should know about the reward system. It should also be distributed transparently. Predictability allows everyone to predict rewards, which motivates employees to achieve their goals and earn rewards. Therefore, a transparent reward system will motivate employees and fulfill their self-esteem and recognition needs.
The reward system should be changed to become need-based, unbiased, and competitive. The system should be need-based to match the requirements of the employees to motivate them to achieve more. Reward has to be unbiased and fair. Everyone should be equally rewarded. If not, there can be many conflicts within the employees.
The Management Process to Design/Implement the New System
Designing and implementing the performance measurement system will include defining goals, selecting indicators, developing data collection, analyzing data, communicating the funding, and reviewing the system for improvement. The first step is to determine the goals and objectives of
the new process (O’Kane et al., 2023). Defining goals refers to setting what is to be achieved, and the goals align with the company’s organizational strategy and vision. This will help identify the key performance indicators (KPIs) that track progress and outcomes. The next step is selecting the indicators to measure the new process performance. Indicators are quantitative or qualitative measures that reflect the performance of a process in relation to its goals (Deschamps & Mattijs, 2018). The company should choose relevant, reliable, realistic indicators for the new process. Relevant indicators directly relate to the goals and objectives and can show the impact of the new process. Reliable indicators are consistent, accurate, and verifiable and can be collected and analyzed confidently. Realistic indicators are feasible, practical, and affordable and can be obtained and used with the available resources and time.
The third step involves selecting the data collection methods. This step encompasses methods and tools for collecting information on the performance measurement system. The methods selected should be sufficiently effective and efficient enough to match the data type (O’Kane et al., 2023). Additionally, the efficiency of the methods should be observed through reduced costs and time needed. Data collection should be followed by data analysis. Data analysis aims to interpret the data and present the results meaningfully. The company should analyze the data and interpret the results according to the indicators and goals.
Once the results of the data analysis have been presented, the findings should be communicated. The communication should be done concisely to enhance the clarity of the results (Deschamps & Mattijs, 2018). The team implementing the new performance measurement system should adopt suitable formats to present the conclusions. The system should be reviewed to check its progress and effectiveness. The system’s effectiveness is tracked by identifying its strengths and weaknesses and improving the areas that need improvement. The review is the final step and should happen periodically. Designing and implementing the new performance measurement should take a year.
Roles and Responsibilities of an Executive Team
The responsibilities of executives in performance measurement systems include supporting the system, communicating its value, and engaging others to participate. The executives should use the performance measurement system to enhance employee motivation and promote their personal and professional development (Lee et al., 2021). The executives should also encourage the employees to pursue performance and productivity. They should also track the progress of the system and its effectiveness in measuring performance. Areas of improvement should be identified and improved.
References
Comighud, S. M., & Writes, S. (2021). Goal Setting, Monitoring, and Feedbacking Practices as Performance Management Mechanisms. https://conferences.ubt-uni.net/2019/wp-content/uploads/2018/09/Book-of-Proceedings_ED_2019.pdf#page=63
Deschamps, C., & Mattijs, J. (2018). How organizational learning is supported by performance management systems: Evidence from a longitudinal case study. Public Performance & Management Review, 41(3), 469-496. https://doi.org/10.1080/15309576.2018.1462213
Kucsma, D. (2019). Performance management features in the light of social innovation in the public sector. http://real.mtak.hu/94145/1/SMSIS_2019_proceedings_KD.pdf
Lee, Q. Y., Townsend, K., & Wilkinson, A. (2021). Frontline managers’ implementation of the formal and informal performance management systems. Personnel Review, 50(1), 379–398. https://doi.org/10.1108/PR-11-2019-0639
O’Kane, P., McCracken, M., & Brown, T. (2023). Reframing the performance management system: the perspective of a conversation. Personnel Review, 52(5), 1579–1596. https://doi.org/10.1108/PR-07-2021-0492
Siska, L. (2018). How Strategic Priorities Are Reflected in Features of Strategic Performance Measurement System? Engineering Economics, 29(5), 591–600. https://doi.org/10.5755/j01.ee.29.5.17463
write