The aim of this report is to shed light on the strategies that Acer Group can use to manage staff performance effectively. The main objective of the report is to discuss the process of designing and implementing an effective performance management system. It will also discuss the strategies for dealing with underperformance. Acer is a Taiwan-based manufacturer and vendor of computer hardware (Acer 2013, pp. 5-180).
Its vision is to be the leading vendor of personal computers in the global market. Achieving this vision has been a challenge to the company due to its inability to attain its financial targets. The company’s losses increased from TWD 6.6 billion in 2011 to TWD 20.5 billion in 2013 (Acer 2013, pp. 5-180). Thus, the management adopted a strategic plan in 2013 that focused on enhancing staff performance to improve the fortunes of the company. The plan will only succeed if an effective performance management system is implemented to monitor productivity.
Performance management (PM) refers to the “process of creating a work environment where employees are empowered to perform to the best of their abilities” (Sahu 2009, p. 3). Therefore, a PM system is “an interlocking set of policies, whose aim is to enhance achievement of business objectives through continuous improvement of individual performance” (Sripirabaa & Krishnaveni 2009, pp. 942-952).
Performance management enables supervisors and those they lead to establish a common understanding of work expectations, share feedback, identify staff development opportunities, and appraise performance outcomes. PM is an integral aspect of human resource management because it helps employees to understand the strategic intent of their company and how they can contribute to its achievement (Cheng, Dainty, & Moore 2007, pp. 60-75).
Dealing with Underperformance
Performance appraisal will always reveal poor performance among some employees. Thus, Acer must have a clear strategy for managing poor performance among its employees. One of the strategies for dealing with underperformance is supporting and coaching employees whose achievements are below the set standards. This includes adopting formal training to improve performance (Williams & Smith 2010, pp. 20-120). Poor performance can also be caused by factors that are external to the company. For instance, an employee could be underperforming due to marital or financial problems. Thus, line managers must create an environment that allows their employees to discuss freely personal problems that might negatively affect their performance.
Taking a formal disciplinary action should be used as the last option if an employee continues to underperform despite being given adequate support (Williams & Smith 2010, pp. 20-120). The first step in taking a disciplinary action should be to warn the employee through a written note. Generally, the note should specify the performance problem, the needed improvement, and the required support. If underperformance persists, the employee should be dismissed. However, the company should adhere to its HR policies and legal requirements when taking disciplinary actions. This will ensure fairness and prevent lawsuits that might arise due to unfair or unlawful dismissal.
Managing High Performance
Acer needs to sustain high performance among employees by rewarding excellence. This will involve linking staff performance to remuneration. High performance should be encouraged by using intrinsic and extrinsic rewards. Intrinsic rewards include formal recognition and promotion (Wilsons 2004, pp. 261-267). Extrinsic rewards, on the other hand, include salary increments, bonus pay, and certificates of achievement. The rationale of supplementing extrinsic rewards with intrinsic ones is that it promotes high performance and enhances staff commitment. Since Acer has a market-oriented organisational culture, rewarding high performance will be an invaluable tool for enhancing its effectiveness.
Designing the PM system
According to Pravin (2012, pp. 67-89), the first task in managing staff performance is to design an effective PM system. The rationale of this perspective is that the outcome of PM is always as good as the system used to achieve it. Performance management is a continuous process that requires a lot of time and resources. Thus, Acer’s HR vice-president must win the support and commitment of senior managers in the company before beginning the process of designing and implementing an improved PM system (Boxall & Purcell 2011, pp. 30-65).
Currently, managers and employees are playing a passive role in performance management at Acer. Line managers are mainly responsible for implementing the policies adopted by the CEO and the board to improve performance. This involves supervising employees to ensure timely achievement of performance targets. The employees, on the other hand, are responsible for formulating their work plans to achieve the expected level of performance.
Thus, employees and line managers are not involved fully in the formulation of performance management policies. In this respect, managers, employees, and their representatives should be involved in the design of the PM system. Staff involvement will allow managers to incorporate the concerns and ideas of employees in the design of the system (Boxall & Purcell 2011, pp. 45-65). This will prevent the resistance that is likely to be experienced if employees are not involved in the design and implementation of the system.
The company believes that it can enhance its performance by adopting Wang-Dao management principles to improve the productivity of its workforce. The most important principles of Wang-Dao include value creation, ensuring sustainability, and balancing stakeholder interests (Acer 2013, pp. 5-180). These principles have not been effective at Acer since they are based on Chinese culture, which is not clearly understood by all employees. Implementation of the principles has received resistance since some employees feel that a new culture is being imposed on them.
Therefore, regular and transparent communication should be given priority during the design of the PM system to avoid misunderstandings between managers and employees (Waal & Counet 2009, pp. 367-390). Communication from the management should clearly articulate Wang-Dao principles to enable employees to understand their roles in the process of improving performance. Acer should use its existing communication channels such as newsletters, staff meetings, and discussion forums to inform employees about performance policies and the progress of the process of developing a new PM system.
Since Acer has a multicultural workforce, its management must eliminate cultural biases in the PM system. Managers must acknowledge the fact that individuals from different cultures have different understanding of success/ effectiveness and ways of achieving targets (Perkins & Shortland 2006, 51-76). In this respect, fairness can only be achieved if the company takes into account diversity issues such as disability, race, gender, educational attainment, and work experience when developing its PM system. According to Rao (2004, pp. 32-97) fairness improves the effectiveness of PM by enabling employees to accept the feedback concerning their performance and take appropriate actions to excel.
All the managers who will be involved in PM must be trained on how the system will work (Perkins & Shortland 2006, 55-88). The training should educate managers on the objectives of the system, how it functions, and their roles in the PM process. Employees, on the other hand, must be trained on goal setting and how the system operates. Training will help Acer to introduce an effective PM system in a seamless manner.
Planning Employee Performance
The first aspect of planning performance is to agree on the objectives that must be achieved by each employee. The strategic objectives set in Acer’s business plan should guide the process of determining the objectives that each employee must to achieve. This means that line managers must first explain the business plan to employees before agreeing on the objectives.
The process of setting objectives should involve discussions between employees and line managers to achieve a consensus on what has to be achieved. The role of line managers in this discussion is to link business goals with “employee performance by putting them into the context of employees’ work” (Cheng, Dainty & Moore 2007, pp. 60-75). Performance objectives have to be specific, measurable, achievable, relevant, and time-bound to enhance achievement of the desired performance standards.
The second aspect of planning performance is to determine the competencies that employees need to achieve their objectives. Competencies refer to the set of abilities, knowledge, and skills that an employee requires to achieve a high level of performance (Fryer, Jiju & Ogden 2009, pp. 478-498). The desired competencies should be selected based on shared values and organisational culture to enhance achievement of business objectives. For instance, HP has a competency development model that is based on its shared values, which include achievement, teamwork, and meaningful innovation (HP 2015).
The model facilitates identification of role requirements and key skills for excellent performance in various functions such as sales and product development. It also facilitates logical learning and career development. Lenovo also has a competency development model, which is based on its key values such as entrepreneurship spirit, customer service, and innovation (Lenovo 2015). As a result, the company has employees with the skill set that it needs to achieve its business objectives. In this respect, Acer should develop a competency framework that defines the behaviors that its employees are expected to demonstrate to be considered competent.
Line managers should be the key players in the performance management process because they normally work closely with employees. This means that they can easily get the best out of the employees who they supervise (Foot & Hook 2011, p. 26). Line managers should be responsible for performing tasks such as helping employees to set performance objectives and identify their development needs.
They should also be “responsible for evaluating employee performance based on predetermined objectives” (Waal & Counet 2009, pp. 367-390). However, this strategy can succeed only if managers have expertise in identifying employee development needs and setting performance targets. Moreover, using a competency development framework that is based on organisational values will not be effective if employees do not embrace the values fully.
Acer’s human resource management policy promotes recruitment of employees with adequate skills and competencies (Acer 2013, pp. 5-180). However, the skills and competencies have to be developed continuously to enable employees to achieve improved performance. Employee development will be beneficial to the company in the following ways. First, it will enable line managers to improve the performance of employees who are not able to achieve existing work targets (Kramar & Syed 2012, pp. 250-380). Second, employee development will facilitate achievement of new objectives that are more challenging than existing ones. Finally, continuous development of skills and competencies will enable employees to advance their careers, thereby improving the performance of the company.
Line managers should collaborate with employees to create personal development plans that specify the training needs of each employee. The plan should clearly indicate the required skill or competency and how it will be achieved. In addition, the plan should indicate the time required to achieve the needed development and how it will be measured. According to Cook and Crossman (2004, pp. 526-541), line managers should focus on establishing developmental relationships by talking regularly with employees about their work to identify their concerns.
This helps in identifying individual strengths and weaknesses, thereby facilitating adoption of the right development intervention. Managers should also provide frequent feedback concerning employee development. They should be explicit and open concerning the expected performance standards and behaviors to ensure effective staff development.
Once the development needs are identified, the company should provide adequate and relevant development opportunities (Kumar 2010, pp. 135-157). Relevant training programs focus on equipping employees with new skills and knowledge to help them manage their day-to-day duties effectively. Training programs that add little or no value to employees are likely to be resisted, thereby making it difficult to introduce new development modules.
According to Kumar (2010, pp. 150-162), timing is an integral aspect of an effective development plan. Training sessions should be short to avoid overwhelming employees by providing too much information. Performance is likely to improve if employees acquire skills that they can use immediately. Staff development should be implemented as a continuous process to unlock the full potential of the workforce. This means that a consistent training curriculum should be adopted as part of organisational culture.
Currently, the development methods used at Acer include formal training, coaching, and providing financial support to employees to pursue higher education (Acer 2013, pp. 5-180). Although these initiatives provide valuable development opportunities, they should be supplemented with the following strategies to improve performance. To begin with, new recruits should be mentored to enable them to fit into the company and begin to create value as soon as possible.
Mentoring refers to the process in which an experienced employee provides support to an individual during his early stages of employment to enable him to excel (Kumar 2010, pp. 139-152). The mentor is expected to act as a confidant who the new recruit can depend on for help as he adjusts to the challenges of his position. Thus, mentoring will facilitate improvement of performance at Acer by allowing employees to seek the support that they require to achieve their work targets.
Apart from mentoring, the company should promote staff development through certification (Kumar 2010, pp. 142-163). This will involve encouraging employees, especially, engineers to obtain relevant certification from independent agencies in their professions. Certification is an invaluable staff development tool because it ensures that employees have an acceptable standard of knowledge and ability to perform their duties.
Performance review refers to the process by which a supervisor evaluates the work or achievement of an employee by comparing it with predetermined standards, documents the results of the evaluation, and provides appropriate feedback (Kumar 2010, pp. 142-150). At Acer, performance review is viewed as an annual event rather than a continuous process. The review is done annually by line managers who mainly focus on determining the extent to which employees are able to achieve quantifiable targets. Employees play a passive role in the process since their participation is limited to supplying information concerning their achievements. Thus, the challenges that prevent employees from achieving high performance can hardly be identified in time. Moreover, feedback is not provided regularly concerning staff performance.
Since performance review is a continuous process, managers should conduct it in three stages. The first stage should involve regular informal meetings that supervisors use to discuss employees’ work and provide immediate feedback (Sripirabaa & Krishnaveni 2009, pp. 942-952). The second stage should involve quarterly or biannual formal meetings where staff performance is evaluated against predetermined objectives. In the third stage, a final annual appraisal of achievement should be done to determine the extent to which the set objectives were attained during the year.
The rationale of conducting performance reviews at different levels or continuously is to facilitate identification and resolution of the challenges that might prevent employees from achieving their targets in time. The main weakness of this strategy is that performance review can become a meaningless routine if its objectives are not clearly articulated (Sripirabaa & Krishnaveni 2009, pp. 942-952). Thus, the outcomes of performance reviews should be recorded and kept by employees and line managers for future reference. This will enhance the relevance of the reviews as employees focus on achieving performance objectives.
Apart from the performance appraisal interviews conducted by line managers, employees should be allowed to perform self-assessment of their work. In addition, line managers should obtain feedback from third parties such as customers and suppliers concerning each employee’s performance. This will enable managers to understand the different perspectives concerning employee performance. However, third parties might lack adequate information concerning employee performance. Thus, their feedback might not be accurate and relevant.
According to Cook and Crossman (2004, pp. 526-541), performance appraisal systems should promote objectivity and fairness to allow line managers to obtain an accurate measure of staff achievement. In this respect, reward decisions should be based on the extent to which the objectives set at the beginning of the year are met by each employee. The feedback obtained from third parties, on the other hand, should be used only for control purposes to ensure fairness. For instance, employees who are competing for a promotion are likely to give negative feedback about each other’s performance. In this case, reward decisions that are based on feedback from third parties are likely to be unfair.
Every successful business must have a strategy for maintaining high performance. This involves supporting underperformers through staff development initiatives to improve productivity. Establishing an effective performance management system helps in monitoring the achievements of employees to ensure business success. Employees and managers should be involved in the process of developing the PM system to avert resistance.
Once the system is established, line managers and employees should determine the objectives that have to be achieved and the competencies that are required to achieve them. Regular performance reviews should be done to ensure that employees are able to achieve their targets. The reviews should promote fairness and objectivity. Staff development opportunities should also be provided to enhance productivity. Training programs should be relevant and delivered continuously to ensure excellent performance.
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