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  1. 1. THE IMPACT OF ORGANIZATION DEVELOPMENT INTERVENTIONS ON PERFORMANCE MANAGEMENT A Case Study of C.I.T. Property Consultants Co., Ltd. 1 Patima Jeerapaet Abstract Good performance management systems can have a significant impact upon the operations and success of any organization. The broad objectives of this article are to identify the problematic areas in the company and identify ways to improve staff performance, employee motivation and involvement. The specific research objectives are to describe and analyse the current situation of the company and to conduct a 3-phase diagnosis: Phase 1, identification of problematic areas which need improvement; Phase 2 development and implementation of intervention techniques; Phase 3 monitoring and evaluation of results after the intervention to determine the impact on the company performance. Both the qualitative and quantitative methods of analysis were used which included interview, observation and questionnaires. The findings are that after the ODI, staff performance improved. This improvement has led to better performance of the organization at three levels. At the individual level—staff perceived more motivation and that their competencies at work increased. At the team level—staff perceived that there was an improvement in team effort. At the corporate level—the findings suggest that improved corporate performance is linked to improved individual and team level processes. Key Words: Performance management, Employee motivation, Employee involvement, Teamwork Introduction were employee motivation, employee involvement and teamwork. It is recognised that human resource The type and manifestation of problems management of considerable importance in vary from one organization to another. the management of organizations (Singh, Therefore, methods used to study and 1992, p. 116). The competitive advantage of suggest solutions to these problems also an organization depends on how well its differ from one organization to another. human resources are managed (Mendonca & C.I.T’s corporate performance when it Kanungo, 1996). Performance can be first took over from Pasupat was not at all considered an outcome of both impressive. There was no unity among staff organizational and human activities (de members and there was a high rate of staff Waal, 2003). The objective of this turn-over. Staff performance was rather poor dissertation was to apply these theories in or sub-standard. CIT stakeholders were not practice, using C.I.T as a case study. What it satisfied with the corporate performance aimed to do is to analyse the corporate because its revenue was not high as it should performance of C.I.T, identify the problem be. areas, and to find ways to rectify the The researcher, as the Managing Director identified problems which, in the C.I.T case, of the company, took this opportunity to apply the knowledge he learnt from the course, to identify the problem areas, 1. Patima Jeerapaet is the Managing Director strategically initiated ODI activities based on of C.I.T. Property Consultants Co., Ltd, a information other authors wrote in this field, property consultant company. He is also a and analyse the results of the ODI he chairman of the Joint Foreign Chamber of implemented. It was expected that the ODI Commerce in Thailand (JFCCT).
  2. 2. activities would improve staff performance, outcome of both organizational and human resulting in improved corporate performance activities (de Waal, 2003, p. 688). which would satisfy CIT stakeholders and Performance management has much wider shareholders. implications than that of simply improving individual performance and providing a Performance Management basis for performance-related pay. It is also concerned with three key features of The competitive advantage of an organizational life: human resource organization in a global economy depends management (HRM), continuous primarily on how well its human resources development, and teamworking (Armstrong, are managed. Of course, the financial, 1994, p. 26). Poor performance has a technological, and other material resources negative impact on company revenues along are undoubtedly also critical to the the same lines as downtime. There is a organization’s success in the competitive negative effect either through lost global market, but these resources are opportunities, lost revenue (Brady, 2002, p. generated by the industrious and creative 4). There is a growing trend towards efforts of people, and it is their ingenuity managing performance improvement that also ensures that these resources are through focusing on the underlying drivers effectively deployed. Hence, the importance of performance. Performance management is of the human resources function is a term widely used within HR and has a increasingly being recognized. specific meaning associated with reviewing Developments in human resource and managing an individuals’ performance. management techniques and practices to However, there is also a growing concern in promote work motivation particularly performance measurement that measuring through performance management, work performance is not enough. Measurement design, reward systems, employee has to lead to insight and insight to action – supervision, and organization development hence the term corporate performance and change strategies, have enabled management has been used to differentiate organizations to create conditions which between management at the level of the foster, promote, support, and reinforce individual and the corporation. More employee effectiveness. These techniques recently, the concept of multiple and practices give organizations the stakeholders has come to the fore. competitive edge both in the short and long Companies can no longer be satisfied with term, as well as in their domestic and only considering shareholders and customers. international markets. Some argue that Employees are also seen as important adopting management practices which have stakeholders, as are suppliers, regulators and proven to be effective is a better alternative the community at large and these have for an organization than needlessly to invest adopted different approaches to this its limited and scarce resources in efforts, challenge (Bourne, Franco & Wilkes, 2003, which do not amount to much more than p. 16). For as long as one person has been “reinventing the wheel”. In any event, the engaged in furthering the aims of another, poor management practices, bureaucratic the employer has been concerned with ways inefficiencies, and low productivity levels of motivating the employee to maximize the that are endemic in many of these effectiveness of the enterprise. Given the organizations, create consider able pressure link between employee behavior, HRM and for managers to adopt speedy, ready-to- company performance, the lower employee implement strategies. They, therefore, hoped turnover and greater productivity should be that such adoption would enhance their (Roos & Fernstrom, 2004, p. 31). effectiveness, and give them a fighting Performance management can satisfy a chance in the fiercely competitive global number of the fundamental aims of HRM, to markets (Mendonca & Kanungo, 1996, pp. achieve sustained high levels of performance 65-66). from the organization’s human resources; Performance can be considered an
  3. 3. develop people to their full capacity and are often observed when a group of potential; establish an environment in which individuals works as a team: shared job the latent potential of employees can be duties, cross-over of skills, flexibility in realized; reinforce or change the substitution, desire to involve everyone, organization’s culture. Performance equal sacrifice and commitment, understood management is also concerned with the and supported overarching purpose. interrelated processes of work, management, In order to be successful, the leaders need development and reward. It can become a to encourage and support your frontline powerful integrating force, ensure that these employees to work together, to be unified in processes are linked together properly as a purpose and action. The word synergy is fundamental part of the human resource often associated with teamwork, because as management approach which should be the people in a group develop an practiced by every manager in the environment of giving and receiving and as organization (Armstrong, 1994, p. 26). they share ideas develop working together The organization has operated successful relationship, their combined action produces because of good performance management results that are greater than they could systems. The Performance Management is achieve if each were working alone the fruit of an organizational structure, its (Humphrey & Stokes, 2000, pp. 59-60). teamwork, its employee motivation and its The capability of a group reflects employee involvement. members’ effectiveness at using their skills and experience to accomplish the work in Teamwork their area. Maturity reflects group members’ effectiveness at making decisions that Performance management is often treated consider work needs and employees’ needs as if it were just a matter between managers and abilities and that are sound from a and the individuals reporting to them. But it practical and business perspective. Maturity can also enhance teamwork by asking teams is not reflected by a group that makes to identify interdependencies and set team decisions based on selfish desires or the objectives and by getting their members most convenient solution. Finally, the drive jointly to review progress in achieving them. of a group reflects members’ motivation and Teamwork can also be enhanced by setting enthusiasm for learning and achieving overlapping objectives for different greater performance results (Humphrey & members of a team (Armstrong, 1994, p. 27). Stokes, 2000, p. 60). In a team-based organization, the Teamwork is essential for competing in performance not only of the teams as a today's global arena, where individual whole but also of their individual members performance is not as desirable as a high needs to be managed and managed very well level of collective performance. In if tall performance (consistently competent, knowledge based enterprises, teams are the ethical, and motivated behavior that always norm rather than the exception. A critical produces the best results) is to be reached feature of team in our company is that and sustained (Brumback, 2003, p. 167). employees at the management level have a In most instances, when organizations say significant degree of empowerment, or they want teams, what they really want is decision-making authority. Aside from the teamwork. That is, they want people within a required technical proficiency to enhance work area to cooperate with one another, to teamwork within the organization make decisions together, and to work together toward a common goal or objective Employee Motivation (Humphrey & Stokes, 2000, p. 59). In the end teamwork will gain greater performance Motivation is one of the critical links results because people are working together between the organization and the individual. rather than independently of each other. That link is expressed in productivity, There are a number of characteristics that satisfaction, and personal involvement. Motivation consists of a variety of forces
  4. 4. that direct behavior toward a goal (Garrison helps appeal to and satisfy the need people & Bly, 1997). have to achieve and be recognized for their achievement (Sims, 2002, p. 69). As the trend continues to shift toward self-managing teams, employees cannot be 3.Empowering Employees expected to turn into motivated self- Today, organizations are increasingly managers overnight; they need to be given empowering their work teams. Empowering the proper tools through development and does not just mean assigning broad training programs. When employees appear responsibilities. Teams also need the training, to be unmotivated, managers will need to skills, and tools to allow them to do their size up the leadership situation, identify and jobs, such as in consensus decision making. understand what is happening, and formulate Firms like Saturn also make sure their a response. Knowledge about the theories of managers actually let their people do their motivation, discussed in the previous section, jobs as assigned (Sims, 2002, p. 72). should help managers identify and understand the motivational problems they 4. Goal-Setting face. In this section, possible methods to Managers and employees need to motivate employees are described. One understand each other’s goals. In addition, reason these motivation methods are widely managers are responsible for helping used is the fact that they have strong employees in setting goals or objectives. foundations in motivation theory and With a clear understanding of explicit goals research. For example, empowering or objectives, managers and employees can employees is based in part on self-efficacy – work together to achieve specific outcomes. namely, on the idea that people differ in their Several attributes of goals are especially estimates of how they will perform on a task. important for improving performance: goal Therefore, building their skills and self- specificity, goal difficulty, and goal confidence by empowering them should acceptance (Sims, 2002, p. 73). bolster their self-efficacy and thus their motivation. Motivation is the force that drives employees towards a common objective. 1. Pay for Performance Employees are motivated with performance Pay for performance is probably the first incentives, team spirits, achievement thing that comes to mind when most people recognition, open line communication, think about motivating employees. Pay for respect, trust and involvement. performance refers to any compensation method that ties pay to the quantity or quality of work the person produces. Employee Involvement Similarly, behavior modification emphasizes that people will continue behavior that is Today an increasing number of rewarded, and pay for performance plans, of organizations see the potential advantages of course, tie rewards directly to behavior having more frontline workers involved with (Sims, 2002, p. 64). growing the company. Although different companies may define employee 2. Recognition involvement somewhat differently and use Being recognized for a job well done – various means to obtain it, many employee and not necessarily just financially – makes involvement efforts involve the formation of a lot of sense in terms of motivation theory. natural work teams. Immediate recognition can be a powerful reinforcer, for instance, and can provide As employee involvement efforts take on some immediate outcomes to counterbalance team like dynamics, supervisors must have the employees’ inputs or efforts. the skills necessary to build and grow teams. Recognition also underscores the Frontline leaders will recognize the performance-reward-expectancy link, and it difference between a group of people and a
  5. 5. real team. They will actively grow their natural resource and capital asset of the teams, understanding the stages every team organization and the most important source will experience and knowing how to develop of sustainable competitive advantage (Jamali, individuals into members of a high- Khoury, & Sahyoun, 2006, pp. 338-339). performance work team (Humphrey & Management through delegation creates a Stokes, 2000, p. 58-59). more nurturing environment in which staff can learn, grow, improve and function Empowerment and Delegation effectively. A further development to delegation is empowerment. Staff Globalization that has occurred since the empowerment gives employees a sense of beginning of the 21st century makes the trust, importance, capability and thus creates world become more dynamic and move at a a positive work environment. It also enables faster pace. Due to increased economic personal and professional growth. The integration and reduced trade barriers, leader believes that empowerment is derived globalization creates greater movement of after a period of time working together. The people, capital, ideas, and goods. Bigger leader must be able to judge an employee’s markets can mean bigger profits if capabilities and trust that person with companies /organizations make every effort decision-making in the best interests of to capitalize on them. Global competition is business operations. No doubt the so strong that organizations will require empowered person will have freedom of making adjustments to the way they do choice and action, but there is a ceiling in businesses as well as to their management decision making that the empowered person styles in order to keep pace with the rapid can undertake. Good leadership is like good change. Therefore it is a real challenge in parenting: communication, coaching and how to manage the organizational behaviour monitoring from time to time is required. to meet strong field of global competition. The ‘Involve them’ management style – To be successful in global competition, “Delegation” and “Empowerment.” There organizations not only should respond are countless benefits to be gained by positively to the competition in the applying them to the full. It is very important international marketplace but they must also for the company to create the atmosphere be more responsive to ethnic, religious, and that nurtures staff abilities and motivates gender diversity as well as personal integrity them to improve their productivity through in the workforce (Nelson, 2006, p. 15). shared knowledge and information and Managing the organizational behaviour empower them to make decision based on during changing times is challenging for at these shared knowledge. Their good work least four reasons: (1) the increasing must be recognized and rewarded. globalization or organizations’ operating Empowered staff are contented and this flow territory, (2) the increasing diversity of through to customers. The firm’s success is organizational workforces, (3) the based on our ability to produce superior continuing demand for higher levels of results for our clients. With strong global moral and ethical behaviour at work, and (4) competition, increasing number of happy continuing technological innovation with its customers may lead to increasing market companion need for skill enhancement. share of the company. These are the important issues to address in manage people at work (Nelson & Quick, Theoretical Framework 2006, p. 18). Management in the twenty-first century The model as depicted in Figure 1 shows has accordingly taken a new orientation, and that performance is an outcome of both is capitalizing on a different approach to organizational and human activities but the managing employees than the traditional most important contributing factor is human disciplinarian, command and control resources. Motivated staff is productive and philosophies. People are treated as the can perform well. Therefore, performance management can satisfy a number of the
  6. 6. fundamental aims of HRM, to achieve researcher notes and observations. The sustained high levels of performance from researcher chose to record notes of all the organization’s human resources; develop interviews which provide the best data for people to their full capacity and potential; analysis. In this research, such data establish an environment in which the latent collection provided the best means of potential of employees can be realized. validating the information gathered and in Performance management is also concerned facilitating ongoing reflection and with the interrelated processes of work, assessment (Denzin and Lincoln 1994). management, development and reward. It The researcher was able to observe some can become a powerful integrating force, limited, informal and formal conversations ensure that these processes are linked and meetings. While observation did not together properly as a fundamental part of form an important part of the data collection, the human resource management approach it did provide additional input. which should be practiced by every manager While interviews are typically classified in the organization. as structured or unstructured, interviews in this research were semi-structured. These initial questions changed based on the . interaction between the interviewees and the researcher, as well as based on the Corporate Performance emergence of new ideas, and is an accepted Effectiveness qualitative methodological process (Yin 1989; Stauss and Corbin 1998). This investigation is designed as an Performance Improvement action research conducted in the real situations. There are three stages in this research, 1) the diagnosis stage, 2) the ODI Team Effectiveness Team grown in capacity stage and 3) the evaluation stage. Individual members learn Phase I: Diagnosis Situation Analysis/ Assessment (Pre-ODI) Employee Involvement The diagnosed situation assessed here is Empowerment / Delegation the transition of Pasupat Realty Co., Ltd. to C.I.T. Property Consultants Co., Ltd. Human Resource Management is considered a Individual Motivation priority. This research will analyze the Goal Setting/Performance current situation of the company. This Appraisal/ Reward System/ Coaching & Training research will also analyze the employees’ capabilities, competence and attitude. Figure 1 Theoretical Framework Phase II: Identify, Develop & Implement ODI (ODI) Research Methodology The research identified, developed and The research process is iterative. The implemented the organization intervention processes of data collection, analysis and which are appropriate for the company. The drawing and verifying conclusions are required interventions are in terms of collapsed into one evolving, reduction teambuilding, Human development, goal process (Miles & Huberman, 1994) enabling setting, performance appraisal, adjusted insight into employee motivation. Data in reward systems, coaching and training this research consists of interviews, Phase III: Monitor & Evaluate executive notes of interviews, questionnaires, Desired/Expected Results (Post-ODI) organizational documents of various types,
  7. 7. The interventions were closely monitored videotape and other methods to record to determine the level of employee behaviours (Cummings & Worley, 2005). involvement, employee motivation after the ODI. Its results would be analyzed and Tools for Qualitative and Quantitative evaluated with job satisfaction, Analysis organization’s growth and corporate performance effectiveness. The researcher did not use significance testing in the quantitative analysis. Reasons Research Instruments, Tools and other for this are that the issue of verification in Data qualitative research differs from the same issue in quantitative research. Consensus In this research, there are 3 instrumental amongst qualitative researchers, however, tools in the forms of questionnaires, remains elusive. For example, Denzin and interview and observations. Lincoln (1994), suggest trustworthiness and authenticity are more appropriate than 1. Questionnaire covered the following reliability and validity, as understood in a areas: positivistic sense. It is the credibility of • Employee satisfaction survey, sense-making that the researcher seeks. The philosopher, Popper, proposes that the aim • Organization Communication, of science is to find “satisfactory • Team work, explanations” (Popper and Miller, 1985 • Employee motivation, p.162), and that these explanations need to • Employee involvement (Empowerment meet a number of criteria, including the need & delegation), for the explanations to properly relate to the • Employee performance Evaluation matters they purport to explain, for the explanation to meet some minimum 2. Interview standards of truthfulness and for the A second important measurement explanation to be testable. Furthermore, the technique was the individual or group explanations are satisfactory when they interview. Interviews were the most widely cannot be shown to be false (Popper and used technique for collecting data in OD. Miller, 1985). In this sense verification is They permit the interview to ask the linked to falsifiability, and that this makes respondent direct question. Further probing good science. Popper believes that a theory and clarification was, therefore, possible as is falsified “only if we discover a the interview proceeds. The flexibility was reproducible effect which refutes the theory” invaluable for gaining private views and (Popper and Miller, 1985 p.150). feelings about the organization and for So, the action research undertaken in this exploring new issues that emerge during the thesis uses intervention to explain interview. phenomena in ways acceptable to qualitative research scholars. Its construct validity is 3. Observations manifested via the multiple sources of The researcher will observe by walking evidence used to verify an explanation casually through a work area and looking through the triangulation of data. In this case, around or by simply counting the it is reasonable to expect another researcher, occurrences of specific kinds of behaviours. working with the same set of data, would Observations can range from complete arrive at a similar explanation. Internal participant observation, in which the validity is manifested in the credibility and researcher becomes a member of the group authenticity of what data arises from under study, to more detached observation, interviews, observations, records, in which the observer is clearly not part of questionnaires, etc., as these provide the the group or situation itself and may use “truth value” of the data collected. The researcher is concerned to establish that the
  8. 8. account provided “rings true” (Miles and In consultation with team leaders and Huberman, 1994 p.278 and 279). department heads, the researcher initiated activities which aimed to improve staff Design/Development of OD Interventions performance, and help rectify the three problems above. These included As a result from Pre-ODI diagnosis, the performance appraisal, goal setting, adjusted company realized that at the individual level, reward systems, human resource some employees had less competency and development, teambuilding, coaching and poor performance. The ODI tools targeted training. These activities were implemented for improvement are the goal setting, in the year of 2008. performance appraisal, reward systems, coaching and training, career planning and Quantitative findings development. The company expected Post ODI to provide higher effectiveness and Sixty employees in every department were better performance of individual employee. asked to fill in a questionnaire which was At department (team) level, there was designed to measure the changes in staff less motivation and poor team working. The behaviour, attitude, staff morale and the ODI tools targeted for improvement were level of team work before and after the more employee involvement as a team, the implementation of the ODI activities. The goal setting, performance appraisal, reward same questionnaire was completed in Phase systems, coaching and training. The I before the ODI and in Phase III after the company expected Post ODI to provide ODI. Questions asked in the survey were higher motivation and better team relevant to the three problem areas, but effectiveness. particular ones can be used to assess the At the organizational level, the company extent of improvement in each of the realized the need to have all employees’ problem areas. involvement which was resulted in strength The results from the two surveys were and unity of the company.   compared to find the impact of ODI The Post ODI was expected to result in activities (Phase II) carried out throughout better corporate performance.   the year 2008. The ODI activities have been successful in rectifying the identified Summary of findings problems and achieving positive outcomes at the three levels:- Qualitative findings The researcher carried out an interview (a) Individual level – staff felt more with seven department heads and eight motivated and their competencies increased. managers to ascertain possible causes of They were satisfied with the revised reward poor corporate performance. In addition to systems, coaching and training the company the interviews, the researcher observed staff provided to them. They knew the career path behaviour and the interactions between they want to pursue. Their communication employees, as a means to understand staff skills improved not only among the behaviour and attitudes as a reflection of colleagues, but also in effective upward and morale. downward communication processes between supervisors and subordinates It was found from the interviews and the respectively. researcher’s observation that the causes of poor corporate performance were poor staff (b) Team level – staff felt that there was performance, the root causes of which were:- an improvement in team work. Department 1. un-motivated staff and low morale heads reported that the quality of work of 2. lack of teamwork, and their staff improved and they were more 3. poor work involvement willing to help their colleagues. Staff were more cooperative when they were asked to
  9. 9. complete a task. There were increasing Brumback, G. B. (2003). Blending “we/me” number of brainstorming sessions and in performance management. Team department heads observed that their staff Performance Management, 7(8), pp. 167- contributed more in discussions. Because of 173. the more frequent and changed nature of communication between people, work Cummings, T. G., & Worley, C. G. (2005). progressed smoothly. They shared the same Organization development & change (8th goals and as a team tried to achieve the ed.). Mason, OH: Thomson/South-Western. target. Staff was more satisfied, after receiving appropriate coaching and training, Denzin, N.K. & Lincoln, Y.S. (1994) especially with empowerment and Handbook of Qualitative Research (1st ed.). delegation bestowed upon them. London: Sage. (c) Corporate level – this dissertation Garrison, M., & Bly, M. A. (1997). Human argues that improved corporate performance relations: Productive approaches for the is linked to improved individual and team workplace. Boston: Allyn and Bacon. level processes. Corporate performance improvement is measured by an 85% Humphrey, B., & Stokes, J. (2000). The 21st increase in the company income between century supervisor: nine essential skills for 2007 and 2008. frontline leaders. San Francisco: Jossey- Bass/Pfeiffer. Conclusion Jamali, D., Khoury, G., & Sahyoun, H. With the 85% increase in the company (2006). From bureaucratic organizations to income, the researcher suggests this is due to learning organizations: An evolutionary the ODI activities initiated that were largely roadmap. The Learning Organization, 13(4), effective and successful. There were no pp. 337-352. major areas that are left unanswered or unresolved. The findings emerge from using Mendonca, M., & Kanungo, R. N. (1996). both qualitative and quantitative analysis and Impact of culture on performance confirmed that the ODI matched with the management in developing countries. conceptual framework. There was a International Journal of Manpower, 17(4/5), significant difference between pre and post pp. 65-75. ODI in all three areas: employee motivation, better teamwork and employee involvement. Miles, M.B. & Huberman, M.A. (1994). Qualitative Data Analysis (2nd ed.) Thousand Oaks: Sage. References Nelson, D. L., & Quick, J. C. (2006). Armstrong, M. (1994). Performance Organizational behavior: Foundations, management. London: Kogan Page. realities, and challenges (5th ed.). Mason, OH: Thomson/South-Western. Bourne, M., Franco, M., & Wilkes, J. (2003). Corporate performance management. Roos, G., & Fernstrom, L. (2004). Human Measuring Business Excellence, 7(3), pp. resource management and business 15-21. performance measurement. Measuring Business Excellence, 8(1), pp. 28-37. Brady, J. (2002). A strategy for managing performance. Retrieved August 22, 2007, from Sims, R. R. (2002). Managing organizational behavior. Westport, CT: 0836.pdf Quorum Books.
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