CIPD Level 5: Module #1 Improving Organisational Performance

Improving Organisational Performance

The below is a module 1 submission for the CIPD Level 5 certification, kindly shared by one of our clients to help you on your own HR journey. First up, Improving Organisational Performance!

Index for Organisational Performance

Part One – Understand the concept of high-performance working (HPW) and its contribution to creating and sustaining a high-performance work organisation (HPW)

1.1 – Analyse the concept and components of HPW

1.2 – Evaluate the link between HPW and sustainable organisation performance, employee well-being and competitive advantage.

1.3 – Identify the barriers to HPW

Part Two – Understand the contribution of performance management to high levels of performance and the role of the line managers in the process

2.1 – Describe the main stages of the performance management cycle and the role of the development and performance reviews

2.2 – Describe the most appropriate ways to involve line managers in the performance review process.

2.3 – Evaluate the contribution of the performance management process to promoting challenges, capability or recognising and rewarding talent

Part Three – Know how to create and sustain a community of practice to build a high performance culture.

3.1 – Explain ways of building trust, enthusiasm and commitment in support of a high-performance culture.

Check out the other 7 module submissions here:

• Module #2 Contemporary Developments in Employment Relations
• Module #3 Employment Law 
• Module #4 Developing Professional Practice 
• Module #5 Business Issues and The Contexts of Human Resources
• Module #6 Using Information in Human Resources
• Module #7 Employee Engagement
• Module #8 Managing and Co-ordinating the Human Resources Function

Part One – Understand the Concept of High-Performance Working (HPW) and its Contribution to Creating and Sustaining a High-Performance Work Organisation (HPW)

1.1 Organisational Performance – Analyse the Concept and Components of HPW

A study by The UK Commission on Employment and Skills (Campbell and Giles, 2009) defines HPW as:

“a general approach to managing organisations that aims to stimulate more effective employee involvement and commitment to achieve high levels of performance”

Since the 1890’s HPW has been discussed and debated and in 1911 Frederick W. Taylor and his peers developed and published “scientific management principles” that apparently led to an increase of productivity due to systems and measurements being implemented. Some elements of the principles were time management, structured work for employees and pay structure for each level. The original principals developed over time and people believed that by motivating their staff, it could lead to happier individuals that were more engaged and that would lead to them working more effectively and achieving a higher standard of work (Sandrone, 1997)

It is suggested that by introducing and maintaining HPW, you can increase turnover, increase employee engagement, productivity and increase efficiency for your business. When trying to focus on HPW, I believe it is crucial for employees to be fully invested in the company’s vision or strategy in order to reach its full potential. Most employees expect to be led from the top so managers need to promote the relevant practices adopted by the business if people are to be fully on-board with the vision.

I believe some common best practices that could help maintain HPW might include:

• Having clear policies embedded into the daily working structure or if new ones are being introduced, ensure that managers of all levels understand them, are committed to them and can reiterate them clearly to their teams or colleagues
• A solid and robust recruitment process where job descriptions are accurate and invite a wide range of candidates that can be assessed for the position/s available; this in turn leads to recruiting the right person for the role
• Clear two way communication is paramount to the success of any business; people need to feel included and like they are fully involved. If this is done in an effective manner, they are more likely to commit to achieving a higher standard of work
• Consistent and proactive 1:1’s where open and honest conversations are had
• Comprehensive training and development opportunities should be offered including cross training or secondment
  Offer a healthy work/life balance where breaks are encouraged (not frowned upon) and if possible, offer flexible working
• Volunteering or team building days are great ways to get employees involved and working together. People can de-stress, enjoy different activities and build good rapport with each other
• Ensuring equality where people feel equal to their peers, especially if they are in the same department and doing the same job

It has been suggested that seven practices are used by successful organisations (Pfeffer, 1998)

1. “Employment security”
2. “Selective hiring of new personnel”
3. “Self-managed teams and decentralization of decision making as the basic principles of organizational design”
4. “Comparatively high compensation contingent on organizational performance”
5. “Extensive training”
6. “Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels”
7. “Extensive sharing of financial and performance information throughout the organization”

1.2 Organisational Performance – Evaluate the Link Between HPW and Sustainable Organisation Performance, Employee Well-Being and Competitive Advantage.

HPW and Sustainable Organisational Performance

One of the first studies carried out by Stanford University in the 1990’s by Pfeffer (1994, 1998) and he carried out one of the first studies to explore why the implementation of process and procedures for HPW led to a more successful company. He suggested if a company had a mixture of policies aligned with best practice, it was more likely to achieve significantly higher standards and results than if little or none were used.

Heavily researched on trying to find the link between HPW and sustained organisation performance (Huselid, 1995) found through McEvoy and Cascio (1985), people who knew what was expected of them in their jobs were more effective and helped in reducing staff turnover. Cutcher-Gershenfeld (1991) found that early dispute resolution resulted in lower costs to business with an increased productivity and Katz Kochan and Weber (1985) found this to be true also.

Employee Wellbeing

C3 Health reported there to be a consistent clear link between employee well-being and HPW after a survey of over 400 individuals spread across England, Scotland, Wales and Northern Ireland at all levels of employment (Expert Workshop what good health can contribute to productivity, 2016). They found when people were happy and well in themselves, they were more productive and likely to go above and beyond in their duties. When employees are given more autonomy and flexibility in their role, they are more likely to remain focused and engaged which leads to them contributing to a HPW environment. If employees feel secure and have a clear understanding on their role/duties, they will contribute to a HPW environment.

Employee well-being was increased by listening to and investing in employees. In the 2000’s Royal Mail were reported to be losing around £1 million per day! C3 (2106). There was allegedly little to no employee morale, the accident rate was three times more than the construction industry and they failed 93% of their regulatory targets.

To rectify this, it simply took a management team that put the people at the forefront of the company and invested in their health and well-being. This lead to accidents halving and them achieving goals they hadn’t done for 10 years. Although it took 18 months to achieve the results, they were staggering; “profits rose to £1.5 million a day, absence fell to 3.5–4.5 per cent, the accident rate halved, and the target for first class post was reached for the for first time in 10 years with fewer staff” (Boorman 2009)

Competitive Advantage

Many years have been spent trying to understand what gives HPW companies the advantage over their competition (Cancialosi, 2015). Some say its small changes and because they are not afraid to re-evaluate and keep up to date with market needs and influences.

There are suggested examples of companies who have re-invented themselves and gained the competitive advantage by engaging and listening to others and moving forwards with their ideas (Wilson, 2014). Two examples are:

Netflix

They were known for their ordering of DVD’s online and deliveries being made the next day. The market was changing so they offered online streaming but because it wasn’t a clear transition they continued to offer their existing service. When they stopped actual DVD’s they lost money so increased their subscription price and introduced their own catalogue of films and TV series which gave them the ‘edge’ and raised their profits once more.

Dominos

In 2009 Domino’s pizza were in serious trouble and they were at the bottom of the pizza chain. They went back to the drawing board with their recipes and made a public campaign stating they would re-invent themselves as they knew there food was not acceptable to consumers. Although people were shocked, it was well received and due to the honesty customers couldn’t wait for the new them! Domino’s increased their profit by 14.3% and their stock grew by 400%. (Wilson, 2014)

1.3 Organisational Performance – Identify the Barriers to HPW

I suggest that every organisation faces challenges and barriers when trying to change or deliver results. Barriers can appear in many forms, such as lack of communication. By example an employee doesn’t have regular meetings with their manager, they may not be fully aligned to the business, may under-perform and lose focus which could have a financial impact on the company. Other barriers could be the lack of a robust recruitment process; if job descriptions are not evaluated or written correctly, that could result in employing the wrong person for the job.

Lack of trust and autonomy are really big barriers in trying to achieve a sustained HPW environment especially if working in teams. Trust is the foundation of all relationships and a lack of it will lower morale, potentially create rifts between departments and decrease productivity.

After reading a CIPD study on six organisations (Miller, 2011), I believe some common barriers to be:

• A lack of communication from top down where managers were not filtering information to their teams and between departments
• A lack of training and development needs, especially from a cross functional perspective where employees felt more valued and embraced when they had a clear understanding and felt they could contribute more effectively
• A lack of autonomy where people are not empowered to make decisions (obviously depending on their level) and this appears to lead to demotivation, boredom and lack of care
• A lack of knowledge sharing that would help people better understand the company’s vision and strategy
• A lack of clear goals and processes again to help people better understand the company’s vision and strategy

This builds upon suggested barriers to HPW (Hoagland-Smith, 2007) :

1. “Ethics”: Lack of ethics and morals can impact hugely on performance and by ensuring everyone is aligned, you are more likely to reach the end goal and potentially more quickly
2. “People Development”: if people aren’t given the option to train, learn and develop new skills, it could affect their confidence and the want to succeed alongside the company
3. “Goal Achievement”: A lack of goals could leave the employee feeling demotivated and not part of a company or able to contribute to success
4. “Measurement”: In line with the above, people can only measure a goal that is quantifiable and understood. Lack of it could lead to no clarity or direction of success or improvement if needed
5.  “Leadership”: Bad will have a detrimental effect on any business that impacts achieving a HPW environment. Leadership needs to be influential and motivational
6. “Policies & Procedures”: Lack of clear and transparent policies and procedures could cause miss-understanding’s in roles and responsibilities and conflict within a team
7. “Working the Strategic Plan Consistently”: Strategic plans are crucial for an organisation to move forward. If there isn’t a plan, employees may not know what they need to do to help the company reach the end goal. It is important for plans to be reviewed and changed if they are no longer fit for purpose

Part Two – Understand the Contribution of Performance Management to High Levels of Performance and the Role of the Line Managers in the Process

2.1 Organisational Performance – Describe the Main Stages of the Performance Management Cycle and the Role of the Development and Performance Reviews

Performance Management

Performance management is a course of action that outlines a set of processes in-line with the business objectives so employees can align and contribute to them. (Gifford, n.d.). They should be both informal as well as formal and should be continuous. Our organisation has monthly “check-Ins” that lead to an annual appraisal and because the conversations are regular, there are no surprises to either party making the process efficient and effective.

It is suggested there are four main stages to performance management (Hearn, 2017) that are Planning, Reviewing, Monitoring and Rewarding (although slightly different wording can be used). (Armstrong 2017) published an evidence based guide to delivering high performance and listed the main stages of the performance management cycle as he saw them to be:

• Plan (Objective Setting) – SMART (Specific and Stretching, Measurable, Achievable and Agreed, Relevant and Time Bound) goals and objectives should be agreed with the line manager and employee that are in-line with the company objectives (Clear Review, n.d.). They should be a mix of organisational achievement (leading into the company goals and performance) and personal development to help the employee grow
• Act (Performing and Developing) – This is where the employee should carry out their duties whilst focusing on achieving their goals and objectives as well as being in a healthy work environment
• Monitor – Constructive, regular conversations should be held to ensure the employee is on track to achieving their objectives and any difficulties they face can be addressed
• Review (Performance Review) – Carried out each year, the employee and manager discuss the achievements made (or not). If the objectives have not been met, the manager would investigate why and discuss training and development needs if appropriate. If they have been met, there may be a related financial reward or extra benefit.

Organisational Performance – Role of Development and Performance Reviews

Development and performance reviews are vital to an organisation if they wish to be successful (Gifford, n.d.). They need to be fully planned, prepared for and aligned to the business objectives; only then should they be rolled out to employees. They should be delivered in a clear and concise way so everyone knows what is expected (managers should be open minded if the employee challenges the objectives).

Development and performance reviews are generally initiated by the manager (sometimes the employee) on regular occasions where evident and honest conversations are held and feedback given. Managers should be flexible and tailor their approach to the employee, so they can have a fully comprehensive conversation that is motivating and inspiring.

(Human Resource Management: People and Organisations, 2016) Beaumont (1993, pp81-2) and Fletcher (2004, pp47-8) argue that reviews and appraisals should include a “self-appraisal” section to ensure the process is a two way conversation.

The reviews should highlight individual steps and objectives for the employee that are very clear and link in with the business. They should highlight any developmental needs such as additional training on a system or if knowledge is incomplete. They can also be used as a tool for highlighting top performers that may be ready for promotion or in need of additional duties to stretch them further.

If development and performance reviews are held regularly, the objectives can change to deliver targets, if the employee has completed the existing ones or if for reasons out of anyone’s control, they have become unachievable.

2.2 Organisational Performance – Describe the Most Appropriate Ways to Involve Line Managers in the Performance Review Process.

In order to get performance management right (Acas.org.uk, n.d.), you should consider:

• “Identify clear aims”
• “Think about your organisation”
• “The key values of effective performance management arrangements”
• “Engage and consult with staff and their representatives”
• “Get senior managers on board”
• “Consider the skills and capabilities of managers”

In Acas’s article 6609, (Acas.org.uk, n.d.) they concluded that if organisations were to be better supported and move performance reviews forward, making them more effective and beneficial to both employees and organisations a like, they needed to be more personal and led by managers and if training was needed it should be given.

As highlighted above, you should “Get senior managers on board”. Managers need to be involved so they can lead by example. They can create the vision for employees, clearly define any expectation they may have, ensure policies are adhered too while trying to achieve targets, objectives and SLA’s and finally, they can keep morale positive and the end result in sight.

Ways You Could Involve the Managers are (Juneja, n.d.)

Ask for their opinion and what they think the objectives should be

• Managers should have input and be involved when objectives are being set. They are more likely to be engaged if this is done
• If involvement is not possible, managers should have a complete understanding on the end to end process and where all departments and individuals fit into the bigger picture

Ensure They Have Time

• Reviews take time and it is extremely important they are not rushed
• Any organisation should ensure that managers who are delivering the development and performance reviews have the time to complete them so they don’t prioritise their workload over a review. They should not feel overworked or stressed, only challenged

Give Accountability

• In the same way an employee is made accountable in achieving their goals, the manager should be made accountable for ensuring the reviews take place and that the goals are SMART
• It is vitally important that these reviews take place regularly and that the message is cascaded down

Offer Them Additional Training

• Managers should feel comfortable and confident in holding the reviews, they should be well equipped and trained in having meaningful, coaching conversations that are open and honest in a constructive manner
• They could be offered training on unconscious bias to help them recognise their learned behaviours and preferences so they don’t influence conversations and decisions they make

2.3 Organisational Performance – Evaluate the Contribution of the Performance Management Process to Promoting Challenges, Capability or Recognising and Rewarding Talent

Challenges

Performance management should help employees push their limits and stretch themselves to achieve more. When setting goals they should be specific such as SMART goals that are not easily achievable; this means employees have to engage and focus on hitting them which should then form the basis of a meaningful conversation during a performance management discussion.

“High achievers are typically motived by a strong desire to accomplish meaningful goals. Work with them to set objectives and targets they believe are both relevant and likely to stretch their talents or effort” (Gately, 2019)

By challenging high performers you can help them get to the next level in their career and if you have a formal succession plan, you can see more easily where they fit.

High performers generally love to learn so by offering them extra courses, responsibility, secondments etc. could help them develop their skills further.

Capability

Performance management is a very strong tool if used correctly and can be used to manage poor performance. Some employees need additional support with their work and achieving targets set by their manger either due to lack of training and knowledge or a general demotivation. Helping employees when a capability issue is found such as offering them a “buddy” or allowing them to shadow someone else who is proficient in the work can aid in development (Acas.org.uk, 2019).

They could attend online or offsite courses, depending on what was needed or they could enter into a coaching relationship with someone who is able to identify what is needed to help the individual progress and develop further. They could also be offered a Personal Improvement Plan (PIP) or Personal Development Plan (PDP) that gives very clear details on what improvement is needed as well as clear guidelines on what they need to achieve as an outcome.

All of the above suggestions are meaningless without regular conversations that document the success, improvement (or not as the case may be) and development of the employee.

In order to think about employee recognition, you should first look at what your organisation currently offer to ensure it is not all focused around financial compensation (M. Biro, 2019). By having objectives and measurables set through the business and through a performance management process, allows you to monitor high performers and therefore recognise and reward where appropriate.

Performance management allows businesses to reward and recognise employees at all levels. This could be financial or non-financial depending on the size or nature of the organisation. Some examples from my experience of both are:

Financial

• Monthly or annual bonus aligned to objectives and goal achievement
• Monthly Incentives such as vouchers or a night out
• Career progression and development (where a pay rise is negotiated)
• Gym subsidiary each month as part of a benefit package

Non-Financial

• Saying thank you that is sincere
• Well-being events such as coffee mornings for a chosen charity or just so employees move away from their desk for 15 minutes
• Volunteering days where the employee feels invested in and can give something back to the community
• Peer to peer recognition is particularly good as it comes from all levels of the business
• Career Development programmes

Part Three – Know How to Create and Sustain a Community of Practice to Build a High-Performance Culture.

3.1 Organisational Performance – Explain Ways of Building Trust, Enthusiasm and Commitment in Support of a High-Performance Culture.

A study involving more than 66,000 people, data highlighted that there should be five key dimensions to aid the creation of a HPW culture (Folkman, 2016). They were:

• “Team Leaders Inspire More Than They Drive”
• “Team Leaders Resolve Conflicts And Increase Cooperation”
• “Team Leaders Set Stretch Goals”
• “Team Leaders Communicate, Communicate, Communicate The Vision And Direction”
• “Team Leaders Are Trusted”

All of the above are centred around team leaders and although this should not be the only consideration, I believe it is a very important factor. When employees need guidance and support throughout each day, it is imperative the message from their leader is clear, concise and if possible of a positive nature.

When you look at the evidence provided, it is clear to see that not one person or department can help sustain a HPW environment on their own and it must be a team effort. HR (Human Resources) play a very important part in ensuring the culture the organisation want to create and sustain, is clearly understood by everyone.

They should ensure that each process and procedure is standardised and of the same high quality, enabling managers to roll out the same message. They should monitor messages, goals, objectives and strategies relayed by managers so they are held accountable for delivering a clear and consistent message.

Deliver Courses are delivered (Figliuolo, 2017) on how to achieve a HPW culture starting right at the beginning and defining what is expected of everyone, explaining the vision and purpose, looking at ways of communicating (as this is vital to the success) and then delving into how the performance is managed to sustain it.

(Pfeffer 1998), (Simmons, 2011), (Mcleod, 2019) and many others, as well as my own belief, show that to create and sustain a HPW culture you should build a solid structure that incorporates the following:

• A robust and thorough recruitment process to attract the highest of candidates; done by using social media such as LinkedIn, job ad boards, the company website and reputable employment agencies
• Psychometric testing can be used to assist the recruitment process and generate questions in line with the existing culture
• A good and informative on boarding process is great to make everyone feel equal and ensure new recruits receive the same message and vision; you could use a buddy system on the back of this will allow continuity
• Managers need to set regular one to one meetings from the start where key objectives and goals are discussed in line with company strategies
• Ensure communication is fluid, everyone receives it at the same time where possible and employees know where to direct any questions
• Introduce motivational ways of working and lead by example where managers practice what they preach
• Reward your employees with non-financial (and financial where appropriate) incentives to make them feel wanted/needed by the organisation; this will help with engagement that should promote positivity

In summary and after the research documented. As well as the above, I believe to build trust you need to be open, honest, and transparent. Managers need to engage in two way conversations where employees are involved in objective setting as much as possible.

Autonomy should be given where possible to create the commitment and buy-in from the employee which should in turn, enthuse them to achieve the highest results. When objectives are cascaded, they should be clear and consistent and delivered in a motivational way were individuals feel engaged, generally happy and know exactly where they fit in to the bigger picture.

I believe the above are only a few ways you can build a HPW but if a few listed are implemented as a minimum, it will help take the first steps to achieving and sustaining a HPW culture that everyone involved can be proud of.

References for Organisational Performance

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