Employee and Company Performance

Critical Analysis of Different Kinds of Performance Management Models and their Impact on Company Policies and Objectives

The idea of a management model in a company is closely related to not just the performance of the employees, but also to the overall performance of the company. Hook et al (2019), elucidate that the ideal of performance management is useful in the process of operations of a particular company and needs to be understood by all the employees and managers of a company. He elucidates that there are six main tools in performance management, namely performance appraisal, 360 degrees feedback, learning and talent development, objectives and performance standards, measurement , business dissertation help, and pay.

The purpose of this report is to categorically look at the different kinds of performance management models which are followed by business organisations and their effectiveness. In addition to that, this report will also examine the role that line managers have in undertaking and operationalising performance management from the perspective of these different performance management models. Lastly, this report will take the case of one business organisation in order to see how they are currently operationalising their functions, in light of the pandemic when most employees have been working from home, and comparatively asses it with the theories that have been discussed so far.

2. Performance Management Tools: Usage and Analysis

This section will elucidate on the tools which has been elucidated by Hook et al (2019) as being the tools that performance management uses in order to successfully manage and organisation.

2.1 Performance Appraisal

The need of an appraisal is to control the behaviour of the employees and maintaining a competitive edge over other players in the market (Chen and Elridge, 2012). A significant usage of performance appraisal is to work as a motivational tool for employees, whereby studies have shown that regular appraisals can motivate employees to perform better and beyond their traditional roles (Applebaum et al, 2011). This motivation arises from the system of rewarding employees, either through intangible means like recognition and respect, or through tangible means like increment in salary and perks (Basset-Jones and Lloyd, 2005).

2,2 360 Degrees Feedback

The idea of a 360 degree feedback came from the need to embrace a richer form of performance appraisal, where the worker can be judged by their superiors and peers and in turn also provide feedback for their peers and superiors themselves (Fleenor et al, 2020). However, some issues with this approach has been raised, namely that employees cannot be a judge and be judged themselves. When people judge or appraise their co-workers, they do so from the same place in the hierarchy. Hence, their opinion is likely to be biased (Peiperl, 2001).

2.3 Learning and Talent Development

Learning and Talent development is concerned with creating mechanisms for internal knowledge increase for an external competitive advantage (Garavan et al, 2012). It is a log term strategy which is used by organisations to keep their employee bases healthy (Prius, 2011). However, the business can suffer from some disadvantages because of this as well. This is because workers may choose to gain the knowledge they get from internal training and depart to their competing organisations, resulting in the loss of the company (Rigg and Stewart, 2011).

2.4 Objectives and Performance Standards

Performance standards and objectives measure two criteria against each other; the first being the objectives of the organisation or the function and second the performance, in order to check if it is working out in accordance with the performance objectives (trainingzone.co.uk). The method of measuring performance depends on various functions like measuring responsiveness, efficiency, inclusiveness etc. These are correlated with the quantifiable statements that make up the goal of the company. Standards form the adjustable goals which can be realigned with time in the company (pctpa.net).

2.5 Measurement

An important part of managing the employee’s performance in an organisation is by measuring their performance. This aspect of measurement is different from appraisal as it specifically refers to the practice of measurement of the performance of the employees. A pertinent way in which managers can do that is by introducing productivity tests. Another way in which they can do that is by employing the 360 degree method. However, it is important for a company to possess tangible sets of measurement in employee efficiency and skill, in order to maintain uniformity organisation-wide (smallbusiness,chron.com).

2.6 Pay

The too of payment and compensation is not a new concept in the world of management tools. Reward measures are thoroughly effective when they clearly link the measures that the employee has taken to the compensation that they have received. Reinforcement of the ideals and the spurring of action within the particular employee and other employees need to be encouraged by immediate compensation, which will allow the employee to associate profit with good work (Buyniski, 1995).

Performance Management Models: A Discussion of Aspects and Definitions

Performance management models are new concepts which are emerging in mostly the private sectors, as performance and operations are getting more data-driven increasingly (Daniels, 1989). Slater et al (1998) describes performance management models as value adding in nature. The objective of performance management is to promote the ideals and values of the company and to achieve the strategic goals that the company endeavours towards (Edis, 1995).

The link between Human Resource Management and performance management is an intimate link and there is generally, these two areas are working in tandem with each other. However, one significant problem that exists within the practice of understanding performance management from the perspective of Human Resource Management is that HRM makes the understanding of performance management narrow. Research has concentrated on the perspectives of Human Resources in collection of data, which is why the ideal of performance management suffers from the gap of being narrow in nature and only understanding performance from the perspective of the human resources and/or the manager (Guest, 2001; Paauwe et al, 2004). The following sections will discuss some major management models which are of contemporary importance.

1.1 Performance Management Model Using Employee Engagement

The idea of performance management depends heavily on employee engagement and the organisation which is implementing the strategy needs to make the employee feel like they are a part of the team and are contributing equally to the company operations (Hook et al, 2019). Of late, the ideal of employee engagement has emerged as a pertinent point of performance management as it involves continuous review and feedback processes by the employer to the employees. Employee engagement has become an important part in encouraging positive attitudes in employee attitude and also helps in employee retention over the years (Bates, 2004; Baumruk 2004; Harter et al, 2002; Richman, 2006). Macey et al (2011) discover in a research which was done on 65 firms that the top 25% of employees who score highest in engagement index reported greater levels of return on assets.

Employee engagement is an important model which is especially relevant in the present time, as employees are increasingly feeling disengaged from their professional experience when they are having to work from home. Support becomes an important part of the employee’s professional experience, as measures professional timings have become blurred due to the perpetuity of virtual connect between individuals in the professional space (Beheshti, 2020). This is an pertinent issue in developed nations like the UK, where industrial and professional spaces are large and stress is prevalent (Allam, 2017). More on the issue of employee engagement in the context of the pandemic and working from home will be discussed in the second section.

Purcell et al (2003) elicited the concept of people and performance for the first time, which consisted of HR policies working in tandem with employees in order to create a professional culture and environment where there is flexibility in meeting challenges. There needs to be an environment of understanding and patience, whereby the end goal is to persuade the employees to do the best that they can. They draw from the work of Applebaum et al (2008) who postulate that there is a need for performance management models which encourage employees to do more than their strict professional roles dictate. This happens when the employees accept the core values that are integral to the aims and objectives of the organisation. Similarly, Shapiro et al (2004) links this people centred performance model to the employee satisfaction ideal which each employee feels or doesn’t feel in their respective roles.

Purcell et al (2008) furthermore give emphasis to HR practices as well, elucidating that the identification of best practices if the first and foremost thing that an organization needs to do. He identifies seven practices, namely, security of employment, selective hiring, letting teams manage themselves, high compensational contingency on organisation-centred performance, excellent training, reduction of status identities between employees and managers and sharing information on all levels. The idea behind the success of the company was based on the perspective that everyone in the company must share on a common ‘Big Idea’. They find that the most smooth and organised organisations all had one thing in common, which was that they were all seamlessly working with each other under a common thread of culture. This is what was referred by Purcell and his colleagues as the ‘Big Idea’ (Purcell, 2003).

The performance of the individual is intricately linked to the performance of the company, the individual needs to be ready to undertake educational programmes and also commit to the ideals of the organization in order to exceed the expectations of the consumer as well as the superiors (Beck and Wilson, 2000; Murphy and Zandavakili, 2000).

1.3 Rationality Based Models of Performance

The ideal of a rational based model of performance has been a part of a new emergence in the academic understanding of performance management. Hasselbladh and Kallinikos (2009) understood the rational model as a model which is thoroughly motivated by performance indicators, ideals like instrumental rationality, legal and theoretical rationality and so on. But perhaps the most famous example of rational based model has been put forward by Oatley and Ferreira (2005, 2009) who elucidate that an organisational structure is already built into the structure of a society. They encourage the usage of questions in the idea of performance management and these questions can be classified as follows; what are the channels of feedbacks that the organisation has designed for itself? What does the organisation do when it gets feedbacks? How has the performance management system in the the larger environment and in the professional environment changed over the years and how has the internal professional environment of the company changed. By usage of these questions, they want to develop a universal, rational model of performance management, which takes into account the micro and the macro environment of the country or social setting in which the organisation is operating.

3. Performance Management During Remote Work: The Case of HSBC

In the light of the recent pandemic, remote work is become the norm. Statista reports that in 2020, 9% of the total budgets that companies had were spent on virtualisation of their technologies. Another survey revealed that in most of these remote working situations, the age group between 18-34 were the ones who were using remote work the most (merchantsavvy.com).

Performance management has been severely disrupted because of the COVID crisis and several strategies which have been put in place in order to begin about smooth performance management operations have been rendered irrelevant. One significant problem that is arising in the light of all theses the disconnect of the mechanism of payment as a measurement of performance in the workplace (Mercer, 2019). Because of financial cuts which had to be undertaken by companies in order to cut down on costs and stay profitable, in a recent survey it was discovered that among all the firms surveyed, 17% had cut or reduced salaries (worldatwork.com). Hence, it has created a significant problem for performance management because a significant parameter of understanding and measuring employee performance is not usable anymore. furthermore, communication has largely shifted to virtual arenas, which makes it difficult for the employees to feel connected to the company they are working for.

Aguinis and Burgi-Tian (2021) provide strategies for the operationalising new varieties of performance management which could be used in the contemporary times. They elucidate that the strategies of business organisations are witnessing sea changes as priorities change during times of economic turmoil. Practically speaking, in companies projects and endeavours are getting delayed, which may result in changes in employee expectations. Hence, the methods of evaluating the standards of an employee’s work is also changing and each company needs to be updated with those changes.

Secondly, the most valuable resource in present day professional environment has become time, Because of the non-availability of several different kinds of services, employees are now having to wear different hats at the same time and take on responsibilities which are not strictly theirs. In the light of this, it is important to consider that time becomes of one the most important resources that any employer could have. Any performance review or any review needs to be mindful about the compromise of time.

Thirdly, the importance of having a standard which the employee could adhere to in order to get a positive performance review have been rendered irrelevant now, as these parameters cannot be measured anymore. Job unctions and the process by which an employ fulfils his/her job role are out of the purview of the employer and hence the employer cannot measure if the employee is fulfilling all the necessary criterion to warrant a good or bad performance review.

In light of this, companies need to develop methods of measuring performance review so that employees do not feel disconnected from the company and additionally maintain a review system. One way of doing that is by using the Net Promoter Score (NPS) which allows the customer to have a stake in the performance review by the usage of direct question asking like if they liked the goods and/or services which was provided to them and if they are likely to recommend those goods and/or services to other people (Hyken, 2016; Aguinis and Burgi-Tian, 2021).

3.1 HSBC Management Model

The current management model that HSBC believes in the overarching objective of providing the best care possible to its customers through customer service. Contemporarily the business model of the company is focused on providing capital to the small businesses (Price, 2020). Additionally, an issue with the company in terms of the management of the company, one can argue that there is a lack of proper organisational methods through which the company can operate and is, instead, relying on immediate solutions to immediate concerns (Ibid).

3.2 Remote Work and HSBC

Innovative solutions are the methods through which performance management can be successfully achieved in this particular scenario. Taking the example of one of the biggest businesses in the UK, HSBC, one can examine the measures that they have taken in order to promote performance management measures even in the midst of remote working systems. In an interview, the head of HSBC HR proposed the model of hybrid, which is currently being used by the employees of HSBC. The hybrid model means that the individuals are working from home for a specific amount of time, but they are coming to their professional space if their presence is required. The speciality of this particular model of working from hime is that workers get to choose which days they would like to come to the office and on which days they would like to stay at home and work. She adds that this is a win-win situation for both the employer and the employees, as giving the workers the opportunity to work from home by themselves and save on office resources while it promotes a healthy and transparent relationship with the seniors of the worker and promote a better work-life balance (peoplematters.in). A similar statement was given to Finacial News, by the chief financial officer Ewan Stevenson who declared that the model of hybrid working in HSBC is here to stay. He also elucidated this was a part of the bank’s strategy to implement cost-cutting in light of the revet economic downturns that the economy of the UK has suffered. The hybrid model is now being considered as a permanent model, as the bank has had to implement several cost cutting measures and had to rely on increasing productivity by its existing workers.

The HSBC website elucidates that even though they are working remotely, they are maintaining close contact with their clients and their stakeholders. They are able to do that by constant updating their communications channels and remote access methods and capabilities which they rely on with the help of their digital team (hsbc.com). Already, the company has started operationalising its hybrid model of the mixture of working from home and office in Hong Kong, where it has asked workers to spend up to four days a week working from home. However, these measures are raising some concerns in the minds of the workers who are availing them, as it is imminent that there could be job cuts as well. Workers are also wary of the fact that they would have to pay a price for the privilege of working at home, as Deutsche Bank introduced a hybrid model for its workers as well, but it also declared that it is docking 5% of the worker’s pay for providing them with the comfort of working from home (trak.in).

References

Foot, M. and Hook, C., 2019. Introducing human resource management. Pearson Education.

Bates, S. (2004, February). Getting engaged. HR Magazine, 49(2), 44−51

Baumruk, R., 2004. The missing link: the role of employee engagement in business success.

Harter, J.K., Schmidt, F.L. and Hayes, T.L., 2002. Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis. Journal of applied psychology, 87(2), p.268.

Richman, A., 2006. Everyone wants an engaged workforce how can you create it. Workspan, 49(1), pp.36-39.

Macey, W.H., Schneider, B., Barbera, K.M. and Young, S.A., 2011. Employee engagement: Tools for analysis, practice, and competitive advantage (Vol. 31). John Wiley & Sons.

Beheshti, N., 2021. Is Remote Work Good Or Bad For Employee Engagement? Your Leadership Holds The Answer. [online] Forbes. Available at: [Accessed 18 March 2021].

Allam, Z., 2017. Employee disengagement: A fatal consequence to organization and its ameliorative measures. International Review of Management and Marketing, 7(2), pp.49-52.

Purcell, J., 2003. Understanding the people and performance link: Unlocking the black box. CIPD Publishing.

DeNisi, A. and Smith, C.E., 2014. Performance appraisal, performance management, and firm-level performance: A review, a proposed model, and new directions for future research. Academy of Management Annals, 8(1), pp.127-179.

De Treville, S., Shapiro, R.D. and Hameri, A.P., 2004. From supply chain to demand chain: the role of lead time reduction in improving demand chain performance. Journal of operations management, 21(6), pp.613-627.

Beck, K. and Wilson, C., 2000. Development of affective organizational commitment: A cross-sequential examination of change with tenure. Journal of vocational behavior, 56(1), pp.114-136.

Murphy, T.E. and Zandvakili, S., 2000. Data‐and metrics‐driven approach to human resource practices: Using customers, employees, and financial metrics. Human Resource Management: Published in Cooperation with the School of Business Administration, The University of Michigan and in alliance with the Society of Human Resources Management, 39(1), pp.93-105.

Hasselbladh, H. and Kallinikos, J., 2000. The project of rationalization: a critique and reappraisal of neo-institutionalism in organization studies. Organization studies, 21(4), pp.697-720.

Otley, D. and Ferreira, A., 2005. The Design and use of management control systems: An extended framework for analysis. Social Science Research Network Working Paper, 682984.

Statista. 2021. Topic: Work from home & remote work. [online] Available at: [Accessed 18 March 2021].

Aguinis, H. and Burgi-Tian, J., 2021. Measuring performance during crises and beyond: The Performance Promoter Score. Business Horizons, 64(1), pp.149-160.

Business.hsbc.co.in. 2021. Novel coronavirus: Customer support and our action plan | HSBC India. [online] Available at: [Accessed 18 March 2021].

This 155 Yr Old Bank Allows 100% Work From Home With 4-Day Week & Rs 24, 0., 2021. This 155 Yr Old Bank Allows 100% Work From Home With 4-Day Week. [online] Trak.in - Indian Business of Tech, Mobile & Startups. Available at: [Accessed 18 March 2021].

Worldatwork.org. 2021. [online] Available at: [Accessed 30 March 2021].

Peoplematters.in. 2021. People Matters - Interstitial Site — People Matters. [online] Available at: [Accessed 30 March 2021].

Fleenor, J.W., Taylor, S. and Chappelow, C., 2020. Leveraging the impact of 360-degree feedback. Berrett-Koehler Publishers, Incorporated.

Appelbaum, S.H., Roy, M. and Gilliland, T., 2011. Globalization of performance appraisals: theory and applications. Management Decision.

Chen, J. and Eldridge, D., 2010. Are “standardized performance appraisal practices” really preferred? A case study in China. Chinese Management Studies.

Bassett‐Jones, N. and Lloyd, G.C., 2005. Does Herzberg's motivation theory have staying power?. Journal of management development.

Harvard Business Review. 2021. Getting 360-Degree Feedback Right. [online] Available at: [Accessed 30 March 2021].

Stewart, J. and Rigg, C., 2011. Learning and talent development. Kogan Page Publishers.

Garavan, T.N., Carbery, R. and Rock, A., 2012. Mapping talent development: definition, scope and architecture. European journal of training and development.

Pruis, E., 2011. The five key principles for talent development. Industrial and commercial training.

TrainingZone. 2021. measuring 'performance standards' vs 'objectives'. [online] Available at: [Accessed 30 March 2021].

Pctpa.net. 2021. [online] Available at: [Accessed 30 March 2021].

Small Business - Chron.com. 2021. Problems When Managers Complete Performance Reviews. [online] Available at: [Accessed 30 March 2021].

Buyniski, T.R., 1995. " Feedback Pay" Using Conipensation as a Business Management Tool. Compensation & Benefits Review, 27(3), pp.62-70.

PRICE, G.Y., A MANAGEMENT REPORT ON HSBC.

Take a deeper dive into Electric Vehicles Taxi Company Business Plan with our additional resources.