Managers’ Responsibility for Organizational Performance

According to Robert Reich an organization’s ability to attract, develop, and retain a talented workforce will be a critical factor in developing a high-performance organization (Reich, 1998, p. 124). The long-term, sustained success of an organization in today’s changing and challenging business environment depends to a large extent on the manager to design and implement HRM programs to develop both high performing employees and organizations.

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This means that the manager must anticipate the future need for employees and develop specific plans to obtain, develop, and retain the type of employees who meet the needs of a high-performing organization. An important element of increasing performance in an organization depends on the role of the manager as an HRM manager.

Every manager is responsible for setting goals for the development and satisfaction of employees, nurture high-performing employees and ensure integration of organizational goals with individual goals of the employees. Thesis: It is expected that in the future, to enhance the performance of a company, the role of the manager will involve personnel management and managers’ competencies (recruitment and training), organizational development (change management and organizational culture); personnel administration (performance appraisal, compensation and safety policy) and social relations (Lipiec, 2002, 137).

The most important aspects of management that touch HR today seem to be decentralization, IT development and flexibility. It is expected that the participative model of organization in which decisions will be decentralized to the lower levels of an organization will be more popular in the future. This will result in the creation of business units that have a lot of autonomy. The manager’s role in enhancing performance must be adapted to accommodate these new changes.

Development of information technology has an immense impact on organizations and will create new work positions. The manager should show flexibility in managing human resources. Two kinds of this flexibility exist — internal and external. Internal flexibility facilitates reducing lack of motivation, absenteeism and change reluctance and targets the individual employees while external flexibility is relevant for designing HR policy and taking into account macro-economic changes such as addressing redeployment aspects, adjusting the workforce during economic fluctuations, and tying remuneration with performance and competencies.

These are targeted at the organization as a whole. In the new business context, employee competencies must be redefined. It is important to give workers an opportunity to acquire new skills, thus training and retraining programs should be offered. Changing competencies means that pay basis also should be modified in organizations. Studies show that pay should be based on the competency and performance of the worker. Focus should also be given to employee safety and labor relations in order to increase performance levels (Steingold and Shroeder, 2007, 44).

Recruitment: Recruitment, as a human resource management function, is one of the activities that impact most critically on the performance of an organization. The manager is responsible for recruiting and it is important that he knows poor recruiting decisions can produce long-term negative effects and can cause high level of expenditure by way of training and development.

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During recruitment, the manager must: plan to fill or eliminate future job openings based on an analysis of future needs, the talent available within and outside of the organization, and the current and anticipated resources that can be expended to attract and retain such talent; determine the current and future human resource requirements of the organization; work on job analysis and job evaluation to identify the individual aspects of each job and calculate its relative worth; assess qualifications profiles, drawn from job descriptions that identify responsibilities and required skills, abilities, knowledge and experience; examine the organization’s ability to pay salaries and benefits; and finally identify and document the actual process of recruitment and selection to ensure equity and adherence to equal opportunity and other laws. Recruitment, when done well, can increase organizational and individual effectiveness in the short term and long term.

People can be recruited from within the organization through job posting and search of existing files. People can be recruited from outside the organization through advertising, use of employment agencies, referrals by current employees, other organizations, etc. (Montana and Charnov, 2000, 215)

Training: Organizations provide training for many reasons: for orientation of newly hired staff, for improving performance of employees, or to prepare employees for future promotions or for upcoming changes in design, processes, or technology in their present jobs (Sims, 2002, 166). In the future the only winning organizations will be those that respond quickly to the issue of training and development–related problems.

The manager must arrange fro employee trainee programs to facilitate employee learning of job-related knowledge, skills, and behaviors or helping them correct deficiencies in their performance. Development is an effort to provide employees with the skills needed for both present and future jobs. Training is important for organizations to enhance the efficiency of its workforce. Moreover, the manager must ensure that the training programs encompass a broader focus than just basic skills development and that training is an outgrowth of the organization’s overall strategy (Sims, 2002, 166). According to the Equal Employment Opportunity Commission, employees must have access to training and development programs in a nondiscriminatory fashion (Mathis and Jackson, 2006, 98).

It is the work of the manager to ensure that equal opportunity regulations and antidiscrimination laws apply to the training process. Organizational training programs may be required for promotions, job bidding or for salary increases. Under any of these scenarios, it is the responsibility of the manager to ensure that training selection criteria are related to the job (Sims, 2002, 168). While planning any training program, the manager must deal with basic issues that include the content of the training program, the length of the program, who will actually conduct it, and evaluation or follow-up of the effort.

Training needs assessment is the starting point for any employee training and development program and it is important that the manager determines the training and development goals. Besides determining the training content and methods, he must also consider learning principles that are the basis of the success of all training and development programs. Job, performance, training and employee learning must be integrated to be effective (Mathis and Jackson, 2006, 265).

Change Management: The manager should act as a facilitator of change in a continuously changing environment. So huge are these forces of change that the future success, and the very survival, of thousands of organizations depends on how well they respond to change. There are both external and internal changes. Some of the major external changing forces in the world are globalization, relentless technological advances, unprecedented competition, political upheaval, and the opening of new markets (Cornelius III, 2007, 2). Changes within an organization include integration of departments, or organizations, establishing different culture or implementing technological changes.

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Change is continuous in nature, happens at a great pace and exerts constant pressure on organizations of all sizes and types. This calls for effective change management during these days. Whenever an organization attempts to introduce change, it is likely to face resistance from its employees which acts as an opposing force to the readiness to accept change. There are five keys to effective change management: good communication, clarity regarding the benefits, clear leadership, participative decision-making and open-mindedness (USDT and FTA, 2007)). The role of the manager as a change agent is very important to the performance of the company.

Communication must be two-way. While it must ensure that everyone is well informed, it should also enable employees to give their opinion to the top management. Secondly, the manager should inform the employees about the benefits clearly. Third, there should be clear leadership. Fourth, people need to be included in taking responsibility for making decisions. Finally, it is important that the manager who initiates the change is open and responsive (USDT and FTA, 2007).

Studies show that employees who have more energy, strength, joy, and power from their work and non-work lives and environments may be more open and ready for changes the organization may require of them. This provides support for managers to offer assistance to employees so that they can have more energy to commit to change efforts. Interventions may include assisting employees with balancing work and family responsibilities (flexible schedules, childcare assistance, job-sharing, training, and more), offering wellness programs, organizing communication improvement activities with management and employees, providing continual help related to improving job knowledge and skills, adjusting job demands when appropriate, providing programs to improve organizational commitment, and increasing employee autonomy (Luthans, 2005, 230).

Organizational Culture: Just like individuals, organizations can be characterized as friendly, aggressive, innovative or conservative depending on the combinations of different system variables within the organization. According to Robbins: ‘Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from organization.” It is the task of the manager to help create an organizational climate by allowing employees to have a shared understanding of the organization and giving them a common perception.

By prescribing shared values, it is expected that appropriate behavior would emerge in such a way that rules and regulations, in the form of bureaucratic corporate policies and procedures, would become unnecessary. In so doing, innovation would flourish through the twinning of freedom and control (Gratton et al, 1999, 102). A good manager knows how to integrate the values, beliefs and norms of a culture so as to create a performance enhancing climate within the organization (Youker, 2004, 6).

Organizations are becoming increasingly interested in learning how to create a permanent “cultural readiness for change”. These institutions strive over time to create an atmosphere that is not only ready for change, but also welcomes and thrives in it. And for this to happen there are three conditions to be met by the change targets: be business literate; feel as though they have the permission to act, and are willing to challenge the status quo (Cornelius III, 2007, 2).

The role of the manager in creating this type of culture is to initiate and reinforce the three ingredients described above. First, managers must create and then support a working environment that is “business literate.” This means there must be a willingness to share strategic goals of the institution and department. Secondly, managers should support stakeholders in having permission to act. Managers must learn how to set boundaries and to give people permission to make decisions within those boundaries. Finally, to make this work, we must have managers who encourage stakeholders to be creative and feel comfortable in challenging the status quo.

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Performance Appraisals: It is important to measure and evaluate performance at periodic intervals because performance appraisals help in ensuring that the recruiting and selection processes are adequate, that training programs are relevant and help in effectively linking performance with rewards. Moreover, these appraisals justify employment related decisions and promotions, thereby providing motivation and development to the employees.

The ultimate goal for any organization using performance appraisals is to be able to improve performance on the job. Performance appraisal can be done by the manager if he is familiar with the performance of individual employees or else he should get it done by the supervisors, peers, direct reports, customers or individuals themselves (Sims, 2002, 202). There are many methods of conducting performance appraisals such as written essays, critical incidents, graphic rating scales, behavioral anchored and observation scales, and multi-person comparisons such as paired-comparison and forced-choice approaches (Sims, 2002, 204).

Each method has its own advantages and disadvantages. Multisource, or 360-degree, feedback is increasingly used by organizations to evaluate their employees’ performance (London, 1995, 211). The manager must ensure that performance appraisals are free from bias and discrimination. If the process is working, managers should be able to see real improvements in organizational performance in the form of lower levels of absenteeism or turnover, fewer errors in production, fewer returns in sales, and higher appraisals. In the long run, however, these outcomes must translate into overall mprovement in the organization’s performance.

The manager must remember that performance appraisals work when they are used to develop employees as resources. On the other hand, when management uses performance appraisal as a punishment or when raters fail to understand its limitations, it fails (Stankard, 2002, 234). It is very important that managers and employees understand the purpose of performance appraisals. In simple words, performance appraisal is a manager’s way of pointing to the employee: “Here are your strengths and weaknesses, and here is a way to shore up the weak areas.” It can lead to higher employee motivation and satisfaction if done right and thereby enhance performance.

Compensation: Money is one of the biggest motivating factors for any employee. Hence, the compensation system plays a huge role in the level of motivation and performance shown by the employees. Employees expect organizations to have compensation systems that they perceive as being fair and commensurate with their skills and expectations (LeBlanc and Hulvey, 1998). Pay is a tangible reward given to the employees for their services.

There are two kinds of compensation: direct and indirect. Direct compensation includes wages and salaries, incentives, bonuses, and commissions. Indirect compensation comprises the many benefits supplied by employers and non-financial compensation includes employee recognition programs, rewarding jobs, and flexible work hours to accommodate personal needs. Typical benefits include vacation, various kinds of insurance, services like child care or elder care, and so forth. It is the task of the manager to ensure fair practices in the realm of compensation. They must ensure there are effective compensation programs.

The type of compensation system the organization promotes reflects on the nature and beliefs of the manager. A strategic compensation program is important; paying employees too little or too much can have serious consequences for a business. One compensation specialist notes, “The linkage of pay levels to labor markets is a strategic policy issue because it affects the caliber of the workforce and the organization’s relative payroll costs” (Risher, 1993, p. 47).

It is also the task of the manager to remember to implement legal acts in this context. EPA (Equal Pay Act) requires an organization to offer equal pay for equal work, regardless of the sex of the employee (Sims, 2002, 266). Title VII of the Civil Rights Act prohibits discrimination on the basis of race, color, sex, national origin, and religion in all aspects of employment, including compensation (Sims, 2002, 266). Thus the manager must ensure that minority employees are not paid less than the others for the same job in the same location.

A recent popular compensation policy is one termed as value added compensation package. A value-added compensation program is one in which the components of the compensation package (benefits, base pay, incentives, etc.), both separately and in combination, create value for the organization and its employees (Newman and Krzystofiak, 1998). To raise productivity and lower labor costs in today’s competitive global economic environment, organizations are increasingly following the compensation system based on a pay-for-performance standard. The term “pay-for-performance” refers to a wide range of compensation options including merit-based pay, bonuses, salary commissions, job and pay banding, team/group incentives, and various gain sharing programs (Sims, 2002, 150).

Employee Safety Policy: Employees cannot work properly in an unsafe and dangerous environment. Hence, to make them perform to their maximum efficiency the manager must ensure that the workplace is safe and healthy for their employees. They should do this not only from altruism, but for two other reasons. First, there are bottom-line performance consequences of mental and physical health. Second, state and federal laws require that reasonable levels of safety be maintained in the work environment. The manager should act accordingly. An unsafe work environment will have a negative effect on the employee’s ability and motivation to be productive.

Many strategies are available for promoting safety within an organization. These include making the work interesting, establishing a safety committee, periodically holding safety training, and rewarding employee participation. Managers also have responsibilities to listen to employee complaints and suggestions, work closely with the safety committee and provide safety instruction. The manager should also focus on safety issues such as indoor environmental quality, HIV-AIDS, substance abuse, stress and occupational diseases. Managers can work through employee assistance programs (EAPs) to help employees with problems in their personal and work lives.

Labor Relations: Due to the high level of competition in the new economy, there is a global need for efficient, low-cost labor, larger mergers, deregulation, and privatization (Sims, 2002, 335). In the changing environment, what remains unchanged is the need for organizations to deal with organized labor in a mutually beneficial manner. While some organizations have enjoyed relatively positive relationships with their unions in recent years, others have not fared well.

And the costs have been enormous. Whether or not managers approve of labor organizations, they are here to stay in the United States and are not likely to go away in the near future. It is important for managers, whether in a unionized or nonunionized environment, to consider good employer–employee relations as a top priority if they want enhanced performance at individual and organizational levels.

When organizations do not have unions, the manager has to maintain employee relations by maintaining fair labor practices, ensuring wages are paid properly and competitive with other employers and following written policies for employer practices. It is the responsibility of the manager to ensure that employees have a voice to bring forth their complaints to the manager’s notice through nonunion grievance procedures or through open-door policy by all management or through an HRM ombudsman to respond to employee concerns. The manager can protect the organization from forming an aggressive union by ensuring fair practices (Armstrong, 2003, 294). It is important for the manager to know labor law thoroughly.

When there are unions, employee relations are termed as labor relations. Labor relations is the process by which organizations deal with employees who are represented by a union, a legally constituted group of individuals working together to achieve shared job-related goals (Sims, 2002 336). Managers and union leaders often use collective bargaining to negotiate acceptable terms and conditions of employment for those workers represented by the unions. During collective bargaining, the manager represents the employing organization and the labor union represents the employees. The manager must be able to address and overcome any impasse that might occur during collective bargaining. If he cannot resolve an impasse, the manager must be flexible enough to seek third-party help to resolve the issue.

Conclusion: The manager plays a key role in enhancing performances of employees and of the organization through various managerial functions such as recruitment, training, change management, forming of organizational culture, performance appraisals, compensation system, employee safety measures and employee or labor relations. However, in the realm of increasing performance, the major challenge of the manager is to integrate programs involving human resources with strategic organizational objectives, thereby making organizations better, faster, and more competitive.

Bibliography

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Mathis, L. Robert and Jackson, H. John (2006). Human Resource Management. Thomson South-Western.

Charnov, H. Bruce and Montana J. Patrick (2000). Management. Barron’s Educational Series.

Stankard, F. Martin (2002). Management Systems and Organizational Performance: The Quest for Excellence beyond ISO9000. Quorum Books. Westport, CT.

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Gratton, Lynda; Haily, Hope Veronica; Stiles, Philip and Truss, Catherine (1999). Strategic Human Resource Management: Corporate Rhetoric and Human Reality. Oxford University Press. Oxford.

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LeBlanc, P.V., and Hurley, P.W. (1998). How American workers see the rewards of work. Compensation and Benefits Review. Pages 24–28.

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USDT (United States Department of Transportation) and FTA (Federal Transit Administration) (2007). Resistance to Change. Web.

Luthans, F. (2005). Organizational Behavior. Tenth Edition. McGraw Hill. New York.

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