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8/2/2019 EMBA Thornhill 5
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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·)