The performance management and the organization’s culture are both intertwined concepts and as per market experts shouldn’t be treated separately. Here in Dubai and all around the UAE the performance management have become a buzz word since past few years, especially since mid-2021 and up till 2022 we have witnessed all types and sizes of businesses, enterprises and government departments have started adopting to more modern and digitalized performance management strategies and practices. The performance management and organizational culture are the integral parts of the business success strategy. Every business wants to achieve higher performance, optimized cost, high-quality outcome, better profitability and steady growth. Like the movement of a car depends on the engine, gearbox, wheels, etc. the operation of the organization depends on the performance of the employees. That is why we have witnessed the increased focus on performance management across all verticals of the industry in Dubai and all around the UAE.
What is Performance Management?
The performance management is a very simple concept, it means improving everything. However, by definition the business performance management, corporate performance management or enterprise performance management is a set of strategies, analytical processes and a structured framework to support improvement and eliminate the hurdles from the way of employees and enable them to work at their highest possible potential to achieve business goals and objectives. That may sound complicated but it is not as that difficult. The performance management consists of processes that are designed to help management monitor, track and improve the efficiency, productivity and progress of the employees and drive a strategy to execute these processes as per a pre-set plan of action. The performance management is an integral part of the modern work environment. It not only help improving the efficiency but it also help improving the entire organization’s culture, which have deeper impact on employees and the outcome they produce for the business and customers.
What is Organization’s Culture?
The culture is a very vague term, yet everyone knows what a culture is. A culture is defined by the people who practiced it, for example, here in GCC the primary culture is the Arab culture, than each nation, and even regions have some distinct features which might not be as prominent to the outsider but can be recognized by the people who belongs to the culture itself. The cultures doesn’t have any defined boundaries, sometimes more than one nation follows the same culture if we look at the macro level, and if we see at a microscopic level in fact every household could have slightly different culture than the others. Similarly the businesses and organizations also have a unique culture it is how the employee behave, how they deal with certain aspects of day-to-day functions, and how they respond to different demands, difficulties and certain circumstances. The organization’s culture includes the long term vision, mission of the business, the ideology of the leaders, and even the rewards and recognition system.
The organization’s culture keeps evolving all the time and always maintain a unique identity which is what fuel the competitiveness of the business and make it more desirable to the customers. Here are the key aspects of the organization’s culture that are closely linked with the performance management:
- Engagement
- Collaboration
- Agility & Efficiency
- Productivity
- Innovation
- Team Performance
- Values
- Behavior
- Motivation
- Personal Development
- Respect & Recognition
These are the key ingredients for any success strategy. An organization or enterprise can’t achieve their long term goals or sustain growth without improving all of the above aspects of the organization’s culture.
How Performance Management can Impact the Organization’s Culture?
The performance management doesn’t have any rule book or a template to set up an organization’s culture, but it have a huge impact on every aspect of the organizational culture. The performance management does have certain rules which dictates how the employee might behave or react to a certain situation, these rules are governed by the vision, mission, values, and traditions and practices a business or organization follows. That is why the performance management have such a profound impact on the organization’s culture. The performance management sets the course for the evolution of the organization’s culture and it can be used as a tool to completely transform it. The performance management not only help businesses align their employees and resources with their company goals and objectives but it also keeps them motivated to achieve them. In this blog we will discuss how the performance management impact on the organization’s culture and values.
Align Employees with the High-Level Organizational Goals and Objectives
The high level organizational goals and objectives are dictated by the vision and mission of the organization. These goals scaled down to the individual employee goals and objectives. It is crucial to align the employees and all available resources with the high-level organizational goals and objectives. The employee orientation and alignment with the high-level organizational goals is the indicator of a good organization’s culture. And it is not possible with a good performance management system and strategy in place. A performance management system provides a fully structured framework which facilitates various processes and help management communicate the high-level organizational goals to the employees and align their individual goals with the high level company goals and objectives. When all employees are aligned with the high level goals the progress improved. This also help improving the organization’s culture, and build a productive environment for the employees. A healthy and productive organization’s culture is a key to long term success and growth.
Build High Employee Collaboration Culture
In any organization the day-to-day operations can’t continue without effective collaborative attempts. An organization is like a car engine, there are too many moving parts, but all must have to move in harmony to move the vehicle. Similarly the performance management system help businesses increase collaboration. There are certain matrices that are specifically designed to measure the employee behavior and their performance in teams and individually. This help managers improve employee collaborations and identify and address problems with the collaboration processes. The performance management system also help management assign goals to the teams and measure each individual’s performance in the team. These steps help organization to build a highly collaborative culture which improve performance and productivity. The employee collaboration not only help increasing the productivity and efficiency but it also help building good relationship among team members and employees which is great for a healthy work environment and a high-performance organization’s culture.
Increase Employee Engagements in Organization’s Culture
Employee engagement is an essential component for the performance management it serves two major purposes one it increases employee involvement/interest in goals and the second it increases employee retention. Increasing employee interest is crucial to achieve high performance and the employee retention is also necessary for a long term success. Whenever a business hires a new employee it take a few months to integrate them within the organization’s culture and let them adopt the new practices, methods and environment. Losing an employee will have negative impact on the performance and in certain cases it could completely jeopardize the performance of the entire team or department. Furthermore hiring employee is an expensive and difficult task, hunting right talent is not easy. The performance management help businesses engage employees in the decision making processes and listen to their say in goal setting and strategy building processes. Employee’s contribution in these activities and processes will increase their interests and also responsibility which help boosting the performance.
Improve Communication between Employees and Managers
The performance management system and the organization’s culture both have only one primary aim which is organization’s success. The health of any work environment and culture can be measured by measuring the communication and relationship between the employees and the management. A healthy organization’s culture establishes a strong communication between employees and the managers which strengthens the employee-manager relationship. A performance management system provides a structured framework for the communication which help schedule one-to-one meetings and performance conversations between employees and managers. When the communication is increased, the employee feel more connected with the management and they are more expressing and blunt about raising their concerns and highlighting the problems they are facing which help management understand those issues and let them take appropriate actions to solve them. The communication is a key to achieve higher performance and it also help improve organization’s culture.
Drive Innovation and Creativity in Organization’s Culture
The performance management system help driving innovation and creativity in the organization’s culture. The performance management system enable employees to actively participate in the decision making and other vital tasks, which help establishing a democratic environment in the workplace and encourage employees to take more creative and innovative approaches to maximize the outcome. These activities are also great for the management to identify the future leader and help them pick right talent with leadership capabilities. The innovation and creativity not only help improving the performance but it also help businesses to evolve into better and more efficient enterprises. The performance management also facilitate communication which help bridging the gap between the employees and the managers. When the employees are comfortable in expressing themselves without any fear or repercussion they are freer to think out of the box. The innovation and creativity doesn’t only help improving performance and productivity but it also provide a great competitive advantage.
Build a Culture of High Performance Teams
The team performance is equally important as the individual performance. High-performing teams mean more collaborative and supportive team members. The performance management helps building a collaborative organization’s culture. The performance management not only measure individual performance but it also provide team performance matrices which help management understand the team’s performance and the individual contribution in the overall progress. Furthermore the performance management system also have a highly effective feedback collection mechanism which not only take feedback from supervisors and managers but also from peers, other teams/departments and even external stakeholders such as customers and suppliers. This enables a sense of responsibility, collective effort, and support for each other in the organization’s culture. When the employees know that their team’s performance also matters they tend to help out their team-mates more and usually such culture inspire higher performance and high-quality outcomes. The performance management system help evolve a culture of mutual support and collective efforts which significantly improve team performance.
Improve Employee Behavior
Traditionally for any society the culture depends on the behavior of the people living in that society. Same is applicable for the businesses and organizations the organization’s culture heavily depends on the behavior of the employees. If the employees are provided with the good organization’s culture and high values, the employees tend to behave good which help improving the performance and the outcome. However, if the employees’ behavior goes unchecked then it can gradually deteriorate and cause a bigger problem for the management. The performance management system is a great tool to maintain and sustain a highly productive and desirable culture at workplace. The organization’s culture doesn’t only impact the employee but it is also very important for the management. A modern digital performance management system emphasize greatly on the behaviorally anchored rating mechanisms. These tools help management to actively monitor the employee behavior and set rating matrices to reward employee for their good behavior. That is why the performance management is a great tool to improve employee behavior which have huge impact on the organization’s culture.
Bring Transparency to the Organization’s Culture
Transparency is one of the most important factor for employee satisfaction. Employee satisfaction drives employee loyalty which help increasing employee retention. And employee retention is very important for long term growth. The HR department’s top priority is to provide the required skillset and talent to each business function which becomes extremely difficult with high employee turnover that is why employee retention is important for long term success. The performance management system is a digital tool which ensures maximum transparency and adopt modern and more effective practices in the organization’s culture. The modern performance management consider the entire performance of an employee throughout the performance cycle, it completely eliminates bias and also facilitate contextual performance evaluation processes. The performance management also improve communication and strengthen the relationship between the employees and the management which also help increasing the transparency in the evaluation processes and have a great impact on overall organization’s culture.
Eliminates Micro Management from Organization’s Culture
The micromanagement is one of the biggest problem almost every organization and business face at some time. The employees usually feel tremendous pressure and stress when the work in a culture of micro management. Usually the managers who micro manage everything doesn’t trust their subordinates. This also cause distance between the managers and the employees and eventually it cause hopelessness and have huge toll on the performance. Such managers also keep checking the employees enquiring about their work, which also make situation more stressful for the employees, eventually the employee start avoiding discussions with such managers which further cause more problems. The communication is a key to high performance if an organization’s culture failed to set up a proper communication mechanism the performance could significantly reduce. The performance management system provides a highly structured communication mechanism and it also provide real-time performance data to the managers and it can significantly reduce the impact of micro management and help improving the performance.
Fair Reward & Recognition Improve Organization’s Culture
The reward and recognition is crucial to motivate employees and to raise their morale. If a business or organization is failed to recognize the achievements of the employees they employee will eventually lose interest and their performance will decline. A healthy organizational culture will always include traditions of rewarding and admiring the high achievers. This will not only motivate them to perform better in future but it will also inspire average and poor performer to do better. Most of the time the employee doesn’t trust on the reward programs due to bias or inefficient evaluation mechanisms. However, with the performance management system the employees know that all of their work will be included in their evaluation and there would be no discrimination or personal bias against them, they tend to perform well. The performance management system also provide detailed performance data to the employees and it can also provide the progress details of their peers and other employees which increase the competitiveness and encourage employees to trust more on the system and perform well. A fair reward and recognition program is a key to improve organization’s culture.
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Conclusion
The performance management and the organization’s culture both are intertwined deeply. The employee usually spend most of their time at the workplace which means that the organizations and businesses should be able to offer a great employee-friendly and supportive environment where they can grow and progress and in return the overall organization can grow. We have always witnessed that businesses and organizations failed to utilize the full potential of their employees and their capabilities. That is majorly due to the flaws of the organization’s culture and the poor performance management. The organization’s culture is set by the values, standards, and communication. The performance management system provides a highly structured framework which significantly improve the communication and help management form and shape the organization’s culture. Furthermore the performance management provides a deeper monitoring and accountability mechanisms which also help improving the organization’s culture.
In this blog we have listed some key features of a performance management system which can help improving the organization’s culture. If you want to learn more or if you want us to develop a highly effective performance management system for your organization, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.
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