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1 Managing Change Through Performance Management EMBA 642 Management of Change Thornhill et al Chapter 5 - Robin Snell

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Managing Change Through

Performance Management

EMBA 642

Management of ChangeThornhill et al

Chapter 5 - Robin Snell

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To Cover Today: Managing Change ThroughPerformance Management (Chapt 5 +)

A. The case of Siemens Standard DrivesB. The performance management cycleC. How performance management

contributes to organisational change² [Including the role of line managers in

implementing performance management]

D. (Extra material- not in Thornhill et altextbook) Managing ¶resistance to change·by helping employees rebuild self-esteem(actually derived from Colin Carnall)

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A1. Case: Siemens Standard

Drives (1) Employs 430 people in the ElectronicControl equipment business (design &manufacturing)

Its change programme involved process re-engineering over a 9 month period.

The new management team and HR manager

restructured the organisation Operations are now based on 9 production

teams of 20 people each

Each of the 9 teams is accountable for its

output and operation

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A2. Case: Siemens StandardDrives (2)

If a team member is under-performing, theteam leader is empowered to remedy thesituation (counselling«dismissal).

10% of employees left voluntarily The team leader·s role is vital. They are incharge of:² team building

² running quality meetings and morning briefingmeetings

² selection, training & appraisal of team members

Teamworking values: openness, honesty, trust,

respect.

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A3. Case: Siemens StandardDrives (3)

The team leader ¶s job involves performancemanagement² setting individual performance objectives for team

members

² two way dialogue² explains to each member how they can make progress

through the performance-related pay structure

Employees who do not ¶add value· are held

accountable:² disciplinary procedures (including dismissals) are seen tooperate

Efficiency & customer responsiveness have

improved.

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B1. Performance Management

PM is an integrated set of techniquesdesigned to improve employees·performance through:

1. Setting clear objectives for individualemployees that link to strategic goals

2. Formal monitoring and review of progresstoward these objectives

3. (a) Reinforcing desired behaviourthrough rewards

(b) Identifying training & development

needs

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B2. The Performance ManagementCycle

Stage 1. Set objectives

Stage 2. Measure performance

Stage3. Feed back results

Stage 4. Process outputs(e.g. training & development,

rewards)

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B3. Potential Advantages of

Performance Management Improved individual effectiveness and

organisational competitiveness

empowerment of line managers andsupervisors

linking of rewards to individual and/orgroup performance

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C. How Performance Management mayContribute to Organisational Change

Performance management can do this by: communicating the organisation·s mission linking employees· performance objectives to

company objectives

involving employees in decision making helping restructuring by devolving decision making making managers manage linking rewards to performance

reducing resistance to change linking individual development to organisational

goals Helping with change adjustment in a work situation

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C1. Communicating theorganisation·s mission

IF there really is open dialogue, and genuine agreement (sign

up), with the line manager about performance

goals linked to the company mission, and alsoregular reinforcement through reviews

THEN

greater commitment to the mission better performance

(REMEMBER THESE ARE ASSUMPTIONS!)

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C2a. Linking employees· performanceobjectives to company objectives -1

Good performance management systemsapply goal-setting theory, e.g.² ¶SMART· goals (already explained in the

Managing Behaviour at work course and inthe Robbins textbook!)

² Not imposed goals - performance

management can make managersaccountable to employees

² Feedback regular, accurate and up-to-date

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C2b. Linking employees· performanceobjectives to company objectives - 2

This requires a changed role of linemanagement² from command and control to coaching,

facilitating, team building² dialogue between line managers and their

staff to ensure that the staff have the

necessary resource to meet theirperformance goals.

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C3. Involving employees in decisionmaking

Some suggested good practices:² Employees should, at the outset, be involved in

designing the performance management system

² The system should emphasise self-appraisal(usually more critical than appraisal by others),and involvement in identifying one·s owndevelopment needs.

² Include 360 degree feedback (upward feedbackon how one is being managed)

This is more likely to lead to more enriched jobs through better job design, and ore

satisfaction

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C4. Helping restructuring by

devolving decision making Performance management, IF DONE WELL,

allows the wider organisation to better identify

and understand what the business unitcontributes to overall organisational performance² Individuals and teams may accept greater

responsibility for their work if they can see exactly

what they must achieve² Resource allocation becomes more clearly linked tobusiness needs, and to customer demands. Thisfocuses everyone's mind on how best to use limitedresources to meet customer needs

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C5. Making managers manage Line managers play a vital role

² they need interpersonal skills

² transformational leadership

² facilitation approach, not autocracy

Line managers become accountable fortheir actions² They must sometimes take tough decisions

about assessments

² They must be able to justify and defend thesedecisions to the employees who are affected

² They can no longer ¶hide· by finding excuses fornot providing necessary support or resources.

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C6. Linking rewards toperformance

Performance related pay communicates themessage: ¶the organisation is getting TOUGHER·

It is a symbol, a visible artefact, designed tochange deeper basic assumptions, e.g.² more achievement oriented, goal directed

² more self reliant

² more cost aware

But performance related pay must² be seen as equitable, i.e. people see that

input/outcome ratios are fair

² reward not punish INNOVATION

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C7. Linking individual development

to organisational goals Good PM systems pay attention to

TRAINING and DEVELOPMENT, not

 just focusing on compensation &benefits

Good performance management

systems help the employee and his/herline manager to identify and meettraining needs, and identify careerdevelopment potential.

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C8. Help with Change Adjustmentin a Work Situation

Performance Management can ensure1. That people can grasp the new systems that

they are working within, and their key resultareas.

2 That people know the performance standardsand reporting lines

3. Time to informally play with new systems as a

way of learning to familiarise and adjust4. Someone to talk to if staff need help or haveproblems

5. Help for staff to regain and rebuild self esteem

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C9. Reducing resistance to

change Actually, the introduction of a

performance management system mayinitially give rise to resistance to change

The following slides present a model ofresistance to change, (from Colin Carnall,

not in the Thornhill et al textbook) andexplain the need for careful performancemanagement to help people to adapt to

change.

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D1. Coping With Change

Change inevitably gives rise toanxiety, uncertainty & stress On top of this, the ¶role strain· of

not being involved in decisions, and

of having inadequate managerialsupport, may add to the stress ofhaving to cope with technologicaland other changes.

If the stress is too high, peopleget ¶swamped· and theirperformance and self-esteem

collapses.

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D2. Self esteem,

performance, stress andchange

Amount of Stress

Amount of Change

Level of

Self-esteem

Level of

Performance Threshol

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D3. Change and Self Esteem Significant organisational changes

create a decline in self esteem for

many of those who are directlyaffected

Rebuilding the self esteem of

employees may be a key factor inhelping them to recover theirperformance

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Internalising

Discarding

Defence

Denial

Adapting

D4. The CopingCycle

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D4a. The Coping Cycle

- Stage 1 - Denial People tend to prefer the present

circumstances to any proposed changes,even if they had previously complainedabout them!

Sudden changes can result in mentalparalysis

There is a feeling of being under threat People will look for excuses why change is

not necessary and may pretend that thechange won·t really happen

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D4b. The Coping Cycle -

Stage 2 - Defence When people are faced with the

realities of new circumstancesthey may become depressed andfrustrated, not knowing how todeal with the changes

They may try to defend their job territory

They may try to reject newpractices and approaches

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D4c. The Coping Cycle -Stage 3 - Discarding the Past People eventually let go of (discard)

the past

They may need support and the

opportunity to get used to the newsystems

They come to see the changes asinevitable and/or necessary

They are ready and brave enough totry to make the new systems work

They need time to ¶grow· into the newsituation and recover a sense of self

esteem.

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D4d. The Coping Cycle -

Stage 4 - Adaptation People learn to adapt to the new

situation and try out newbehaviours

Technical and operationalproblems are identified and

modifications made to deal withthem

People continue to try to makethings work and need the time

and space to be able to do this

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D4e. The Coping Cycle -

Stage 5 - Internalisation

By this stage, people willhave created a new system,process and organisation

The new situation has

become ¶normality· They have finally come to

terms with the change

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Covered Today: Managing Change ThroughPerformance Management (Thornhill Chapt 5 +)

The case of Siemens Standard Drives The performance management cycle The role of line managers in

implementing performance management How performance management

contributes to organisational change

Managing Resistance to change byhelping employees rebuild self-esteem(from a book by Colin Carnall ¶Managing

Change in Organisations·)