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Business Essays On Performance Improvement

Performance Management Systems

Do performance management systems lead to better quality public services?

According to Armstrong (2001) performance management can be defined as a strategic and integrated approach to delivering sustained success to businesses, in this instance public services, by improving the performance of the employees by developing the capabilities of team and individual contributors. A performance management system sets out to establish organisational goals and objectives to ensure that a business is successful and employees perform to the highest possible standard. The system also identifies any problems with a pubic service and monitors progression in the form of improved performance. It is important to establish whether performance management systems will improve public services because they affect every individual in the UK. A good example of where a performance management system is needed for better quality of safety, reliability, punctuality, and comfort is on UK railways and on the London Underground. This essay aims to establish whether the successful implementation and use of performance management systems will lead to a higher quality of education, health, police force and public transport system.

The Prime Minister’s Speech in 2001 stated that UK public services were still in need of modernisation and change in order to meet the changing needs of a 21st century public. He suggested that investment alone was not enough to increase the quality of public services and he believed that society was driving the focus away from the 1980s financial focused businesses to focus on successful public orientated businesses. Tony Blair also explained that teachers, doctors, nurses and police officers amongst other professional public servants were satisfied with their job which suggests that it is possible to introduce successful performance management systesms as public service employees strive for improved performances however, that could be the government’s view of public services in the future. The need for public service improvement comes from the increasing number of people living longer; more treatable diseases which results in a higher use of the NHS; more people are staying in education for longer and going onto university and higher numbers of the public are using public transport. Therefore, the Prime Minsiter believes that there is a need to better public services, one method being the adoption of performance management systems.

According to Armstrong (2001), performance management systems are integrated into a business at four levels, to attain the broader issues of a business whilst simultaneously achieving the same goals. The four levels of integration which performance management aims to gain are; vertical integration which link the business, team and individual objectives, functional integration which link the different parts of an organisation, HR integration which associates business development, HR development and reward in order to achieve a coherent approach to managing employees and finally the integration of individual needs with a business to establish the best performance. In essence, performance management systems aim to establish a shared understanding about what is to be achieved in the workplace.

The reasons for establishing a performance management system in public service organisations are to ensure that both the organisation and employees alike produce better results and a higher quality output. The Prime Minister’s speech (2001) suggests that in order to enhance public service performances front line staff need more power, their terms and conditions of employment should be geared to proper recognition for the work they do and they should be given real incentives to produce a better performance which in turn will create a higher employee morale and greater fulfilment. In order for performance management to be a success it is important that public services are adequaltely staffed, the governments plan in 2001 was to recruit an additional- 20,000 nurses, 10,000 doctors, 10,000 teachers and 6,000 police recruits. This should allow employees to work better and give the public service access to better educated employees who will perform to a higher standard and who will accept change and constant monitoring of their job.

Armstrong (2001) agrees that performance management is an ongoing and flexible process which requires employers, managers and employees to work as partners within a set framework to achieve the same results. One of the most important aspects of a successful business and performance management systems is to establish good lines of communication. If public services achieve this they will improve their performance towards customers and within the organisation because problems will be identified and resolved quickly and efficiently and employees will feel they can converse more easily with top management which will guarantee better understanding of their job and thus they will produce a better service. As abovementioned performance management systems will ensure the business can cope with performance problems, Armstrong (2001) suggests taking a number of basic steps to eradicate setbacks. Firstly a public service must identify a problem and agree a solution, secondly a performance management system can help a business establish an explanation for their shortfall, and in the case of the NHS it will identify the reasons for the long waiting lists for patients. Thirdly, public services can agree on action to be taken in regards to poor performance, for example in areas outside of London in somewhere like Farnham, Surrey, bus services are infrequent and poorly time managed. With a good system in place bus services will be able to establish from the public a better service which will also ensure the increased usage of public transport in the area. Lastly, it is important that public services encourage and monitor public and employee feedback to ensure problems do not reoccur. The aforementioned will guarantee that public services will benefit from performance management systems as they will be able to provide a better quality service to the public.

Bannock Consultancy (2003) suggests that performance management is simply an ongoing communication process between people who work together. In their opinion everyone wins if public service employees are directed and supported so that they can work as effectively and efficiently as possible in line with the needs of their customers - the general public. High quality public services will be offered if clear expectations and understanding about the results to be achieved are established. Performance Management is a system. That is, it has a number of parts, all of which need to be included if public services are to produce a good service to customers, bring value to the business and to the employees themselves. In essence, Bannock Consultancy (2003) confirms that performance management systems will lead to better quality public services if a variety of tools are used to control the process. These include, for example: public services strategically planning for the medium term. This will ensure closer control is maintained and any problems that arise are eradicated quickly and efficiently. Furthermore, to establish high quality public services it is essential that businesses adapt their performance management systems to coincide with the demands of the public. However, if the employees of businesses servicing the public are not content with their jobs, then regardless of business objectives, performance will suffer. Therefore, it is crucial that employees receive annual performance reviews, appraisals and personal development plans to encourage a better performance from every individual. Further, Bannock Consultancy (2003), believe that performance management systems can be linked in with performance related pay. For example, if bus drivers are rewarded for maintaining good time keeping on route, then they will provide customers with a good and reliable public service and more customers will use the service. As a direct result of pay it is possible to enhance the performance of public service employees which in turn will reflect a superior quality service to the general public. This highlights the importance of a good work balance which takes into consideration, employees, customers and the managers. If all work together with clear lines of communication it can only lead to better quality public services. In today’s workplace businesses are constantly striving to improve public service delivery therefore performance management initiatives are likely to become more popular in order to reach these higher standards.

Bannock Consultancy (2003) understands that performance management cannot immediately solve every problem for customers or for employees of public services. It does however, have the potential to address many common concerns. If performance management systems are introduced, executed well, with businesses investing the time into ensuring that the process is beneficial to the customer and organisation then performance management can; Reduce a managers’ need to be involved in every dispute or issue that arises, ensure employees feel they are given more responsibility which will make them feel more important and therefore put additional effort into their work. Further, performance management will allow managers to better manage the public services and plan ways to improve their business. For example, having worked at a job centre in London I am aware that if managers of job centres are free from dealing with day to day issues they can concentrate on improving the accuracy and speed of providing individuals with benefit applications as there is currently a huge backlog of claims which are being delayed due to a lack of employee competence which managers must assist with. A performance management system implemented into the job centres would also help employees to identify, understand and agree any gaps that may exist between desirable and actual standards of performance which would increase the time frame within which individuals would receive their claims. Moreover, performance management systems are likely to enhance employee knowledge of their job as they are provided with clear overall objectives. This in turn will help reduce the frequency of situations where employees do not have the information they need when they require it. Lastly, performance management may also help eradicate fears of organisational change or a change in business culture and provide a framework for improved business development. The aforementioned highlights the importance of top management for implementing a performance management system. If management set out clear objectives and tasks for each employee then public services are likely to improve.

According to Armstrong (2001), objectives refer to the results that public services need to attain, both on a business level and employee level. In order for performance management systems to be successful for public sector businesses it is important to integrate appropriate objectives to understand performance requirements. It is necessary for information to flow both, top down and bottom up, allowing individuals to put forward ideas with confidence. Public services can enhance performance introducing goals which cover the key area of a job. Armstrong (2001) suggests the SMART approach, which public service organisations could tailor to their exact service. This process recommends that businesses should specify objectives to ensure that employees can reach goals. Secondly, objectives should be measurable, for example the NHS needs to set lower targets for waiting times at hospitals. This will result in increased public support for the NHS as they will provide a more efficient service. Thirdly, the goals need to be achievable, for example the Child Support Agency has a huge backlog of claims from parents which need to be reduced. Management should set targets for completing claims quicker; however objectives must be realistic because if employees cannot meet set goals, then the performance of individuals is likely to suffer and public service quality will diminish. Fourthly, objectives must be relevant to the organisations goals. That is, bus drivers cannot be given targets for the number of people they carry per day, as it is unlikely that these targets would be met and timetables would not be adhered too and team work would disappear as employees try to take custom from others. Lastly, objectives must be given a time limit in which the goals need to be met. In this instance the public needs to see obvious changes in improvements of performance in order for the quality of public service performance to be recognised.

Performance management systems are essentially an investment to ensure managers can rely on employees to successfully fill their roles in the public service. Performance management will certainly guarantee better public services as employees better understand their roles and the expectations of the public. If performance management systems are introduced into a public service its effectiveness is unlikely to be immediate but, Bannock Consultancy (2003) states that eventually it can help management to delegate more and more responsibility, so that senior managers can spend more time discussing how they can manage the uncertainty of today’s rapidly changing operating environment. This will save time and money as for example the NHS has huge waiting lists, with the introduction of a performance management system, management can establish ways in which to shorten waiting times whilst employees of the NHS conduct their work on a more efficient scale. Modelling the behaviour necessary to do this is called leadership. It is the type of leadership that is now helping the UK government to develop their public services.

According to the Kings Fund (2004), getting value for taxpayers’ money and a high quality health care service is a difficult business. The NHS did have an alternative process set up to assist in improving performance; a competitive system (the internal market). However, the NHS has now introduced the new performance assessment proposal to enhance performance. Public services need incentives to enhance performance as pay and benefits are not always as rewarding as other business incentive schemes. In my opinion the transferred reliance on central control and the introduction of clear performance indicator targets will change the behaviour and performance of NHS employees and will generate a better public service with lower waiting times for treatments. The Prime Minister’s Speech (2001) highlights that increased performance management will lead to real progress on inpatient waiting times reducing them from an 18 month maximum down to a historic low of 6 months, with average waiting times down to 7 weeks. It is perhaps important for the NHS management to review the performance of private health care services to establish a better way of running their organisation and increase the performance of the NHS. It must be noted that performance will not improve if employees have not gained job satisfaction so it is essential that the NHS secure an adequate number of employees to guarantee higher levels of performance in the future. Appendix 1 illustrates the performance management cycle which should be adhered to in order for public services to improve their performance. The cycle illustrates the key requirements for a successful performance management system. If public services establish every step of the cycle they are likely to succeed in improving the quality of their service. Basically, performance management systems will enable public services to improve performance as long as every job is clearly defined, monitored and reviewed and changes are made to generate a better public service.

It seems that performance management systems can lead to higher quality public services however, according to Armstrong (2001), performance management must focus on employee development. If a public service has not established an effective system of continuous development then performance will likely fall and objectives will not be met as employees are not able to follow clear guidelines. One of the biggest issues relating to performance management is that of communication. Armstrong (2001) acknowledges that if businesses or employers do not allow a clear line of communication within the organisation then performance will be affected, goals will not be reached and customers will receive a reduced level of service as a result. Furthermore, the introduction of performance management systems forces managers and employers to assess their business and recognise any failures and or faults; therefore it is more than likely that public services will be improved if they adopt this process. Moreover, performance management systems involve organisational and structural changes within a business, individual employees may oppose changes and therefore this could result in lower performance output as staff are unhappy with a change in their business environment. It is important that if, for example British Railways introduce performance management systems they incorporate changes slowly into the business, informing employees at every stage. Otherwise train safety and time management will continue to be a problem.

According to The Chartered Institute of Personnel and Development (CIPD) 2004, performance management is difficult to implement. It is about ownership by everyone in the organisation, and especially line managers. Surveys suggest that individuals and managers in organisations with performance management systems quite like the changes the process brings to the business, and especially its emphasis on personal development, although performance-rating (often linked to performance related pay (PRP)) often provokes hostility, which could create the opposite affect of a performance management system and create more problems for public services. Furthermore, schemes can be over-detailed and require too much form-filling, and there can be a lack of definition in terms of what is meant by performance and how to achieve it. Furthermore, performance management schemes can be less successful than they might be because of a lack of training, especially at the implementation stage. Public services need to adapt and measure their performance against the customer reaction and perception on their business. At present the government is very aware of the low quality service that trains provide as stated in the Prime Minister’s Speech (2001) and they should therefore take steps to establish a performance management process to reform the public transport service. The measurement of performance must be ongoing and according to Armstrong (2001), be an integral part of the business to sustain any improvements, continually develop employee skills and ensure that public services repeatedly learn how to improve their performance.

In conclusion it appears that performance management systems that are adhered to and well established will lead to higher quality public services.

However, it is vital that public services have open lines of communication for employees to communicate with top management to ensure the workforce remains satisfied in their jobs and therefore maintain a high level of performance in order to achieve the organisational goals. It is also important to note that the UK government is aware of the need for an increased performance of public services and they believe that managing employee performance in the workplace is a sure way of generating better quality services.

In all, a healthy balance of employee contribution, clearly defined objectives and a good work environment will enable better quality public services. Managers must ensure that the process is constantly reassessed to reap the benefits of a well establish performance management system.


Bannock Consulting (2003). Human Resources Management and Development, Integrated Performance Management Systems, and Leadership in Public Services. (Internet), Available at http://www.bannock.co.uk/PracticeHumanResource.html, cited 07/05/05

Kings Fund. (2004). Performance Management. (Internet), Available at http://www.kingsfund.org/HealthSystems/performance_management.html, cited 07/05/05

Armstrong, M (2001) A Handbook of Human Resource Management Practice. 8th Edition, Kogan Page Limited

Prime Minister’s Speech. (2001) Reform of public services. (Internet), Available at http://www.number-10.gov.uk/output/page1594.asp, cited 10/05/05

CIPD (2004). Performance Management. (Internet), Available at http://www.cipd.co.uk/subjects/perfmangmt/general/perfman.htm, cited 10/05/05

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