Section A
Question 1.1
Standard Chartered Bank is an International financial institution. Standard Chartered using talent management programme to develop the employees. Talent management “often times referred to as Human Capital Management, is the process recruiting, managing, assessing, developing and maintaining an organization most important resources- it's people.” (Talentmanagement101.com, 2009) The talent management programme at Standard Chartered Bank shares several similarities with SHRM.
Firstly, Standard Chartered Bank sees people as assets and puts them first. As reported in the case study, one of the four principles that underpin the bank's talent management programme is that “a great business needs great managers”. The bank's view is consistent with the very important SHRM idea that “people are central to the successful performance of the organization” (Module SHRM, 2004, p.g1). But Standard Chartered does not merely pay lip service to the slogan; it takes action. For example, it is reported in the case study that the talent management programme has the support of the top management. With top management support, it does not come as a surprise that “HR issues have ascended the corporate agenda”. Furthermore, the bank has even declared an organizational level people goal, to “measurably increase its leadership capacity by 2011”. All these are signs that show how serious Standard Chartered is about its people. This is consistent with SHRM, where people are indeed serious business.
Secondly, because “employees are central to the successful performance of the organization”, the SHRM experts make a logical conclusion saying that “an integrated and coherent approach to managing people is needed” (Module SHRM, 2004, p.g.1). In other words, HR issues cannot be managed in isolation. It is noted that the words “global” and “worldwide” appear several times in the case study. These words suggest that Standard Chartered Bank has adopted an integrated and therefore strategic approach to managing people. For example, the talent management programme is about the “worldwide workforce”, not the workforce of one country or one region. In addition, the bank introduces “global standards and tools” to its managers (the six-monthly performance appraisal being one of them) and expects them to use them. Also, Right Start, the bank's “global induction programme” that “covers every new arrival” is strategic in character because it is a strategic response to the attrition that the bank is facing “globally”. To sum up, most of the HR-related actions implemented in Standard Chartered Bank's talent management programme are consistent with SHRM.
Thirdly, another very important SHRM idea is that the “sourcing, deployment and development of people is the difference between the success and failure of the organization” (Module SHRM, 2004, p.g.2). Standard Chartered Bank's talent management programme does deal with sourcing, deployment and development issues. The programme however seems to place more emphasis on development and deployment than on sourcing. This is possibly because after a survey of the external labour market, the bank reaches the conclusion that there is “not enough supply” of to “develop its own people”. People development is part of SHRM. Specifically, the resource-based model of SHRM would look for ways to “exploit or enhance the available resources” (Module SHRM, 2004, p.g.21). People development is about the enhancement of human assets and Standard Chartered Bank's talent management programme has come up with several ways to create “great managers”. For example, it offers coaching to selected senior people and “managers at all levels can tap into a growing range of self-help tools”. Also, as mentioned earlier, deployment is another key feature of SHRM. As reported in the case study, one of the four principles that underpin the bank's talent management programme is that “people perform best when they play to their strengths”. This principle is closely linked to deployment. Deployment is basically about putting people in places but when combined with the bank's philosophy on strengths, it is then about putting the right people in the right places so that they can add the most value. As pointed out by Storey (1995, p.g.4-5) internal resources must “add value” in order to create competitive advantage. To “help” assets add value, they must first be put in the right places where their strengths can really shine. The career of Geraldine Haley, the bank's head of talent management and leadership development, offers some clues as to how deployment works at Standard Chartered Bank. The case study reports that Geraldine Haley “has held several senior HR posts with the bank for more than 15 years, spending several in Singapore, before returning to London”. According to the case study, Geraldine Haley had to make several “stops”, including one overseas, before she ended up where she is right now. In my view, these “stops” are all about deployment, putting people in places where they can add the most value, and then moving them around when necessary in order to increase the value that they are producing.
In view of the three main points mentioned above, it can confidently be said that the talent management programme at Standard Chartered Bank does display features of SHRM.
Question 1.2
One of the consequences of the recent banking crisis is mass retrenchments. Retrenchment is a regrettable but sometimes necessary thing. As the Standard Chartered Bank case study suggests, there may well be several categories of employees which are the “high potentials”, the “critical resources”, the “core contributors” and so on. In an organization but only one category will most likely face retrenchment is the underperformers. Underperformers exist in practically every organization and these people cannot be rightly considered as organizational assets. Hence, something must be done to these “liabilities”. As suggested in the case study, the underperformers may have to be “managed out”, which is probably a polite phrase for retrenchment.
While I believe retrenchment is at times necessary, I also believe it should be used very sparingly but the problem today is that retrenchments may have been misused or abused by some organizations. Specifically, I feel that some organizations resort to retrenchments much too easily. For example, we read in the newspapers that in some organizations, the top executives are getting big bonuses while the people below are getting the sack. This practice cannot be good for those organizations in the long run. The Standard Chartered Bank case study talks a bit about employee engagement. The theory is that highly engaged people are likely to perform well and the bank's talent management programme hopes to build engagement.
Next, Humans are not perfect and therefore cannot create something that is perfect, so the perfect performance management system does not exist. Furthermore, Schneier, et al., (1991) stated that managers can misuse or abuse a reasonably good performance management system. For example, a manager who for some reason does not like John may rate John poorly. So how can we know for sure that the right people (that is, the underperformers) are getting retrenched? The truth is we can never know for sure and I suspect that among those who have been retrenched in the wake of the recent banking crisis, not all of them are underperformers.
The best an organization can do is to reduce the chances of retrenchment. Firstly, an organization can start by hiring the right people. One sensible way to do so is to “hire for attitude; train for skills”, as practiced by Southwest Airlines in the United States. (Allen, et al., 1999) I take “hiring for attitude” to mean hiring people whose personal values are in alignment the employer's organizational values. This is a sensible approach because attitude-what's in the heart-cannot be easily taught whereas skills can be transmitted more easily. Secondly, once the right people have been hired, train for skills. This is the part where I think Standard Chartered Bank is really doing a good job. Thirdly, the suspected “underperformers” should be given enough opportunities to prove they are not really underperformers. They should be “presumed innocent until proven guilty”. They should be treated the same ways as the “underachievers”, that is, they should be “helped” to do a better job. Another option is to re-deploy them in a thoughtful and meaningful way and give them a chance to shine in a different place. This is not unlike the strengths philosophy at Standard Chartered Bank but do not move them to just any manager; move them to managers with a reputation of being great people developers. If they still cannot improve their performance under the great people developers, then the only alternative for such people may well be retrenchment. Moreover, the recommended treatment of underperformers may indirectly boost morale because people appreciate an employer that treats its people fairly. Finally, cut bonuses and salaries first before resorting to retrenchment. During the recent economic crisis, I have heard stories of how some companies chose to reduce the number of their operating days (thereby reducing salaries) in order to retain their staff (that is, zero retrenchment); also, nobody gets any bonus. I think this is a highly sensible approach. Such companies are sending the message that they care about their employees and the bosses are at the same time showing solidarity with the employees-they are sharing the pain. All the recommended actions are aimed at reducing the chances of retrenchment and building employee engagement.
In the final analysis, the talent management programme at Standard Chartered Bank contains for the most part components that seem to be relevant. For example, the people development aspect of the programme sends the message that the bank cares about its people and is likely to be relevant in both good and bad times. However, the people classification and the managing people out aspects should be managed with extra care so as to avoid any unintended consequences.
Question 1.3
Organizations in general and HR practitioners in particular need to measure the impact of SHRM on growth or other appropriate indicators of organizational performance so that the value added of the SHRM system in use can be clearly shown. If the SHRM system is not having the desired impact on organizational performance, something can then be done to improve it. Some bosses however are more demanding and not so patient. They may propose a big reduction in the SHRM budget or even outsource a very large portion of the HR function. That definitely will not be good news for most HR people. The bottom line: HR practitioners need to show they are worth every penny of the money that they are being paid. But intention is one thing and doing it is another. HR practitioners must still answer some challenging measurement questions such as “What to measure” and “How to measure”. Furthermore, based on the Standard Chartered Bank case study, measurement may not be a straightforward thing after all. The bank admitted indirectly that it might have been measuring the wrong thing for some time; it now measures outcomes instead of processes. Measuring the wrong thing has negative consequences. As some management gurus like to say, “What gets measured gets done”. So if an organization measures the wrong thing, its employees will do the wrong thing. Hence, it is crucial to get the measurement done right.
To measure the impact of SHRM in an integrated way, HR practitioners must first do their very best to understand the business of their company. According to Yeung and Berman (1997) the balanced scorecard is useful models that can help HR practitioners understand what it takes for their company to succeed. Basically, the scorecard assumes that for companies to do well over the long haul, the expectations of three key stakeholders-shareholders, customers and employees must be satisfied. According to Yeung and Berman (1997, p.g.324-326) suggest that the three stakeholders are interconnected in a cyclical way, that is, employee satisfaction impacts customer satisfaction, which in turn impacts shareholder satisfaction, which in turn impacts employee satisfaction, thereby completing the cycle. This is an important point because it clearly “identifies people as the driver of business growth and success” and that is where everything should start.
The use of the balanced scorecard in HR measurement is just the first step. Yeung and Berman (1997) further recommend that the scorecard be integrated with a strategic HR framework. The strategic HR framework contains three components, business strategy, organizational capabilities and HR practices. HR practices do not directly impact business strategy but they do directly impact organizational capabilities. In addition, Yeung and Berman (1997) suggest that HR practices do directly impact employee satisfaction and customer satisfaction, two of the three balanced scorecard components.
With the integration and the links between HR practices and organizational capability and the satisfaction components clearly established, the HR practitioner can now develop the appropriate HR measures. Yeung and Berman (1997) state that there are three different “clusters” of HR measures which are internal operational measures, internal strategic measures and external strategic measures.
Internal operational measures are the “traditional” HR measures. They basically measure the quality, efficiency, costs and delivery speed of HR services. Internal operational measures can be divided into two types which are process measures and outcome measures. Examples of process measures include the time and cost of filling a vacancy while examples of outcome measures include the four levels of training evaluation. Internal operational measures are still useful but as its name suggests, it is operational and hence tactical and not strategic, and is no longer sufficient for an integrated evaluation.
What are more important are the two strategic measures, internal strategic measures and external strategic measures. Internal strategic measures measure the impact of HR practices on two strategically important things which are employee satisfaction and organizational capability. To illustrate ways in which HR impact can be measured, Yeung and Berman (1997) provide a Motorola instrument that focuses on the HR employee satisfaction link and an Eastman Kodak instrument that focuses on the HR organisational capability link. The Motorola instrument contains questions that address six key employee concerns are meaningful job that contributes to employee motivation, behaviours and knowledge to be successful, training available to upgrade skills, career plan, feedback and personal sensitivity. Yeung and Berman (1997, p.g.331) point out that “by tracking these six questions, Motorola can ensure that its HR practices are adding value through a more committed and competent workforce.” The Eastman Kodak instrument focuses on the three capabilities that the company thinks are critical, leadership effectiveness, workforce competencies and performance-based culture. Leadership effectiveness is assessed through 360-degree feedback whilst the other two are tracked through other forms of measurement. Yeung and Berman (1997) stress that line managers should be held accountable for the internal strategic measures. According to the Yeung and Berman (1997, p.g.331-332) “while HR professionals may design and develop all kinds of HR practices, the effectiveness of these practices ultimately relies on implementation by line managers; therefore, line managers, more than HR professionals, should be held accountable for building critical organizational capabilities and enhancing employee satisfaction.”
As mentioned above, the second and last cluster of strategic measures is called the external strategic measures. These measures measure the impact of HR practices on customer and shareholder satisfaction. In the case of customer satisfaction, one company, for example, has decided to share its best practices with its customers in areas in which the customers need assistance. To measure the impact of the sharing, HR professionals can measure customer satisfaction and commitment. If there is increased satisfaction and commitment, that means the sharing is effective and should continue. In the case of shareholder satisfaction, the measures are highly complex. In my view, the link between HR practices and shareholder satisfaction seems somewhat far-fetched, so I will leave it at that.
The strategic measures described here should be considered when doing an integrated evaluation. They can show the bosses that HR matters a great deal and that HR professionals are worth the money they're getting.
Question 3
The world is changing and the changes that are taking place are having an impact on business organizations all over the world. One big change is the advancements in technology. New technologies such as social media are changing or improving the way business gets done. (Module SHRM, 2004, p.g.2-6) According to the Garavan, et al., (1999, p.g.174) other big changes may include product or market changes, external and internal labour market changes, changing skill requirements within industries and the availability of skilled workers from outside the organization.
Furthermore, the size of these changes can be big and the speed of these changes can be fast. How are organizations responding to such changes? Organizations have to change along with the environmental changes. One way they can change is to change the way they think about people. It has often been said that people are an organization's most important asset. On the surface, this saying seems to be consistent with one of the most important ideas of SHRM-that an organization's competitive edge and ability to succeed is derived from its intellectual assets, which are found mainly in the people working at an organization but in the face of the big environmental changes, the saying does not seem to be totally correct. The reason is that the “value” of the assets is not likely to stay constant in the turbulent environment. For example, in order to use the new technologies that are now available, the people of an organization will have to have the right skills. Organizations with the right people will have the ability to take advantage of the new technologies while those that do not may eventually lose out. According to the assignment Standard Chartered Bank case study illustrates the employees into five categories which are high-potentials, critical resources, core contributors, underachievers, and underperformers. The reality is that there are underperformers in practically every organization and they cannot be rightly considered as assets, and as suggested in the Standard Chartered Bank case study, the underperformers may have to be “managed out”.
An organization can get the right people through several ways. One way is to hire but this could turn out to be an expensive option. Another option is to upgrade the existing human assets through human resource development (HRD) activities. HRD activities are concerned with the training and development of people as well as their education. Such activities can be formal or informal and all may be categorised more or less as “learning”. According to Garavan, et al., (1999, p.g.174) HRD practitioners dream of creating learning organizations-organizations that learn adapt and innovate as cohesive units. HRD practitioners are strong supporters of learning organizations because they believe, as one management guru puts it, that the ability to learn faster that one's competitors may be the only sustainable competitive advantage. In short, sustainable competitive advantage is an important HRD outcome. Garavan, et al., (1999, p.g.174) stated that another important outcome is “organizational innovative capacity”, but before competitive advantage and “organizational innovative capacity” can come about, learning has to happen first.
HRD can play several key roles in helping organizations achieve learning. To illustrate how HRD can help companies do well in the current environment, I will use the case of a fake but nevertheless believable Malaysian company. This Malaysian company has a relatively large presence in the region and it has decided to introduce teams as part of its response to the environmental changes. The main reason for doing so is because the top management felt that teams are able to respond more quickly to customers and their frequently changing needs. It should be pointed out that for a long time, the company has been hierarchical and bureaucratic in its management style, so adopting a new organizational form is quite a big change as well as a big challenge.
HRD can help the fake Malaysian company in several ways. Firstly, it is obvious that the workers need to learn new skills in order to remain effective in the new team environment. HRD can help to identify the skill gaps and address those gaps at the individual, team and organizational levels or whatever level that is relevant (Module SHRM, 2004, p.g.291-293). In the case of the Malaysian company, part of the learning has to include “hard” technical training. That is because it has offices all over the region so it has no choice but to go “virtual” and its workers need to learn how to use information and communication technologies effectively to make the teamwork work. In addition, the learning will have to include cross-cultural communication and teamwork. Many nationalities work in that company and different nationalities communicate and do things differently. Therefore, the people at the company need to be trained so that they can communicate and work effectively as a cohesive multi-cultural team.
Secondly, according to the module SHRM, (2004, p.g.291-293) HRD can act as catalyst for change and in the case of the fake Malaysian company, cultural change may be especially critical. Culture is the way people do things at a particular organization. Culture can also be considered as the wisdom and knowledge that an organization has accumulated throughout the years of its existence. The change from a hierarchical, bureaucratic style to a team-working style is in part a cultural change. Culture is however difficult to change partly because it has contributed to the organization's past successes. Imagine telling a 20-year veteran in the fake Malaysian company who has risen to a fairly high level, a person who is so used to the hierarchical and bureaucratic style of working, that he now has to work in a team. It is very likely that he will resist the change. So, the veteran needs to learn to accept the need for change and ultimately change himself. In this case, training may not the best learning solution. More informal HRD activities such as coaching or counselling may be more appropriate in this sort of situation.
Indeed, the “correct” choice of HRD activities is critically important in ensuring that learning really takes place. In this particular context, learning means that the skills picked up by the participants of a training programme are immediately put into use at the office. It can also mean people showing the behaviours that an organization considers highly desirable and important for organizational success, such as teamwork. The “transfer” to the workplace however does not happen automatically and HRD practitioners can play a role to ensure that the transfer will eventually take place. HRD can do so by getting things right from the start, by making sure that the content and delivery are right, which is HRD's third role in helping an organization achieve learning. Take training as an example. In most organizations, some of the training can be conducted by in-house experts but not all of it. So HRD practitioners will have to source for training solutions from the outside and they will also have to perform some sort of quality control on the solutions. That is the content side of things. Great trainers complete the picture by giving great delivery. Some people think training equals HRD, but is that true and is training always the best solution? The truth is this, training is not the only solution and it is not always the best solution. Let's look again at the 20-year veteran case. As mentioned, I do not think training is the best solution in that case. What may be more appropriate for the veteran is one-to-one coaching or counseling. Coaching, counseling and mentoring can be considered as delivery mechanisms. Other delivery mechanisms include e-learning or formal education. HRD practitioners need to know the strengths and weaknesses of each mechanism and make the right choice. In addition, HRD practitioners cannot assume managers automatically know how to train, coach, counsel or mentor. HRD practitioners can help the people involved get trained in both content development and delivery. At the end of the day, HRD practitioners need to know what works best in any given situation and give their recommendations and they should never forget that the learning outcomes of the selected content must be in alignment with the organisational objectives and that the delivery should be good so that the transfer of learning is likely to occur.
Finally, HRD can play a role in the creation of a learning climate or environment. This is important because a learning climate can help embed learning within an organization's culture. Learning can take place anytime, anywhere. However, as implied above, learning may not be an easy thing for some people and if we look back at the 20-year veteran, some people may even resist learning. In that particular case, it is probably more of an unwillingness to learn than an inability to learn but in the case of the fake Malaysian company, they are now told more or less that their way of working is no longer good enough. The implication is that they are incompetent, an implication that will likely hurt the self-esteem of many a veteran. Therefore, in order to encourage learning, organizations have to make it safe to learn. The safety that we are talking about is psychological safety. HRD practitioners have a less direct role to play here. It is the top management, the leaders, who will have to play a major role. They will have to lead the way. For example, leaders have to find ways to encourage people to take risks. As pointed out by Garavan, et al., (1999, p.g.174) innovation “will only take place in organizations where the organizational culture empowers individuals and accepts risk taking”. In the same way, when people learn, they may in fact be taking risks but risk-taking can result in failures and when people fail in their attempts at learning, they become open to “attacks”, especially from their bosses. For instance, the 20-year veteran may need relatively more time to learn the new technologies and he may well experience some hiccups along the way. So before people are willing to learn, people must be confident that they won't be punished when they fail, that they won't be attacked when they are down. In short, learners have to place great trust in their bosses, especially during times of failures. So leaders have to somehow show that it is OK to make mistakes and fail. It is easier said than done, but the adoption of this leadership style may pave the way towards innovation and sustainable competitive advantage.
All in all, HRD can play four roles in helping companies achieve SHRM and organizational outcomes and the most important outcome may well be learning itself.
Question 4
According to the module Strategic Management of Human Resources, (2004, p.g.172) a performance management system (PMS) “is a set of techniques and procedures for improving organizational performance.” The performance management system has six features. Firstly, clear organizational objectives must be set. These objective are at the same time clearly linked to the organization overall strategy. The performance management system communicates the objectives to the employees and the objectives are go down to the departmental, team or individual.
The second main features of performance management system is that provides an ongoing review of whether or not the objectives have been met or are being met and whether or not the objectives require change.
The third main features of a performance management system involve appraisal and feedback. The feature is closely connected to the ongoing review.
Sources: Strategic Management of Human Resources, University of Sunderland (2004), version 2.0, p.g.176
The above figure shows that, both appraisal and feedback let employees know where they stand in relation to their objectives. Appraisals tend to be formal and do not occur often whereas performance feedback can be given regularly through activities such as managerial coaching or mentoring. The combined review and appraisal can be used to identify the training and development needs of employees. Specifically, outcomes of the needs analysis can then be used to create personal development plans for the employees. The combined results of the review and appraisal can also be used to develop career plan for the people. The creation of personal development is the fourth main features of a performance management system.
The fifth main feature of performance management system is concerns reward. The results of the appraisal can be used to make reward decision. If an employee perform well (that is, he achieves his objectives in a way that is positive and acceptable to the company), he or she will receive the reward provide from the organization. A common reward is money but it also can be recognition or sponsorship of employee postgraduate education.
The final main feature of performance management system is the organization capability review (OCR). The organization capability review helps the organization determine their capabilities. A clear understanding of its capabilities will help an organization to do some adjustments. For example, if an organization does not have enough of the right employees, it can go to the labour market and hire them.
According to Schneier, Shaw and Beatty (1991, p.g.283) stated that a good framework that can help organization design performance management systems that fulfill strategically useful outcomes.
The figure 2 shows that a good system should have three characteristics which is it must measure the right things, it must also measure them in a right way and it must hold the performers accountable. If an organization can get these three things right, it should be able to achieve strategically useful outcomes. All three characteristics will be discussed below in some detail.
Firstly, organizations must identify what the right things are for them which mean the critical success factors (CSFs) for an organization. Critical success factor are in some ways similar to core competencies. Schneier, Shaw and Beatty (1991, p.g.285) stated that two companies in the same industry may not share the same critical success factors. For instance, both Air Asia and Singapore Airlines are in the same industry but they do not seem to share the same critical success factors. Air Asia would most likely concentrate on cost related success factors whereas Singapore Airline would most likely pay more attention to services excellence in order to achieve success. Rockhart framework, (1979, p.g.284) mention that critical success factors are influences by the characteristics of an organization industry, an organization strategy and industry positioning, environment factors and timing factors. These four factors form the Rockhart framework and organization can use this framework to identify their own unique set of critical success factors.
Once the success factors have been identified, organization can then move on to the second important characteristic of a good performance management system which is suitable performance measures. Schneier, Shaw and Beatty (1991, p.g.288) stated that “critical success factors what must be done to win; performance measures are needed to determine how well we must perform and how we will know if we succeeded.” A number of factors should be taken into consideration when developing performance measures. Firstly, the performance measures must be consistent with the critical success factors. Schneier, Shaw and Beatty (1991, p.g.288-289) gave the example of a manufacturing company whose critical success factors was product quality but its procurement people were measured on the procurement costs but not on the quality of the raw materials. In the end, the wrong measure did not translate to improved performance for the manufacturing company. This proves that the organization having the right critical success but not measuring it in right way. Organizations should learn from this example and design performance measures that are consistent with their critical success factors.
Secondly, the performance measures must also be consistent with an organization existing performance culture. Schneier, Shaw and Beatty, (1991, p.g.292) identified four different types of performance cultures, provided illustrative key practices related to people management and performance management and described the environment in which particular culture type would do well. An organization can use the figure 1.3 from appendix to determine whether or not there is a fit between its performance management and its organization culture. (Refer to appendix figure 1.3: Performance cultures and performance measurement and management (PMM) implications)
Thirdly, performance measures should not only measure whether or not an objective has been achieved but also how it achieves. As a scenario, the sales target for the salesman are RM500, 000 and the salesman achieve the target but his manager later found out that he did it in a way that was negative such as he lied about the features of his company products to get more sales. What the salesman did was negative to the company because his actions may damage his company reputation, which is not a strategically useful outcome. Furthermore, his actions will surely anger his honest colleagues- that too are not a good outcome. A good performance management system will not reward the salesman. On the contrary, it will require the firing of the salesman because his actions are inconsistent with his company value and can further damage his company reputation and the morale of the people. I suppose the key idea behind the three factors mentioned in this paragraph is consistency. Consistency is an indicator of integration. When the performance measures are well integrated with everything else that is important, when they make logical sense and do not send conflicting messages to the people, they are likely to work well. Perhaps more importantly, a performance management system that is consistent with the critical success factors.
Finally, holding the performers accountable is the third important step in good performance management system. This step is important because it help to assure the execution of strategy and ensure the fulfillment of strategically useful outcomes. The critical success factors and performance measures must first go down to all the different but appropriate levels such as individual objectives, team objectives and so on. Then the two ways to hold performers accountable are through rewards and consequences.
Schneier, Shaw and Beatty, (1991, p.g.296-297) stated that design and effective implementation of a performance management system require top management support. Without top management support, the system loses credibility. But the best thing any top management can do, I believe, is to led by example. In organizations, people do what people see. Since leaders are highly visible, they can lead their people by modeling behaviours that will eventually result in strategically useful outcomes. Secondly, the people who will be using the performance management system, especially the managers involved in the assessment of subordinates, have to be trained first so that they know how to use the performance management system correctly. No matter how well design a performance management is, the top management and the HR people cannot assume that people automatically know how to use it correctly. Training would ensure the correct use of a well-designed performance management system, and that could indirectly lead to strategically useful outcomes. Thirdly, a good performance management system should contain both quantitative and qualitative performance measures. Some important things just cannot be measured quantitatively. According to the case of the pharmaceutical company written by the Schneier, Shaw and Beatty, (1991, p.g.294-296) the collaborative behaviours of team leaders was important to success but it was difficult to measure quantitatively, so it was decided that the “assessment of tem leaders in writing would be obtained from team members and would be used as input for promotion and compensation decisions.”
By and large, there are probably other ways in which an organization can ensure that its performance management system delivers strategically useful outcomes. I have highlighted several in my essay and I believe they serve as a reasonable starting point for any company that is seriously thinking about improving its performance management system in term of design or implementation.
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