Work Management, Performance Management, Principles of Total quality management, Development Supervision

Work Management

Traditional performance management has weaknesses and is no longer suitable to be applied by business organizations in entering very tight competition in the global market. Traditional performance management must be abandoned and replaced by implementing new performance management. Performance management improvements are carried out on an ongoing basis to deliver the best performance of employees, teams and organizations. 

In order to achieve the effectiveness of performance management, business organizations need to develop supervision in making improvements to performance management. The performance management model which consists of four stages (planning, implementation, reflection, and compensation) can be used to improve performance management.

Traditional Performance Management To Update Performance Management

PRELIMINARY

Organizational expenditure on human resources is the most dominant compared to expenditure on other resources. In the increasingly fierce competition in today's global market, many business organizations are affected by the disaster of not competing, suffering losses, and even bankruptcy, due to the low productivity of human resources in these business organizations. The problems that afflict the business organization can be solved by finding the main causes that cause these problems. A common cause of this problem is that business organizations are still implementing traditional performance management.

In a global economic system which is a system without national borders which is gradually becoming a reality, the business environment is changing rapidly. Especially supported by the rapid development of information technology and transportation, globalization promises everyone everywhere the opportunity to access the best around the world. This article discusses how to make performance management improvements to deliver the best performance of employees, teams, and organizations.

The discussion of performance management will be focused, if we first understand what is meant by performance management. Performance management is a set of practices related to job appraisal, skill development, and rewarding in organizations. Performance management practices can be in the form of goal setting, employee selection and placement (employees and managers), performance appraisal, compensation, training and development, and career management.

The discussion of this article begins by identifying the characteristics of traditional management and new performance management. The identification is intended to find out the weaknesses of traditional performance management and find out the advantages of new performance management.

Managers and supervisors of an organization play an important role in helping the organization achieve its goals by increasing and maintaining high employee productivity. Effectiveness and efficiency in carrying out work will support organizational performance to produce products and services that are able to meet customer needs and expectations.

Managers and supervisors must be responsible for employee performance by ensuring that employees are fully aware of their responsibility for their work and motivated to improve the quality of their work. In order to achieve the effectiveness of performance management, the next discussion in this article is how to develop supervision in making improvements.

Improvements in performance management are carried out tirelessly and have no end. The final discussion in this article is how a performance management model consisting of four stages (planning, implementation, reflection, and compensation) can be used for continuous improvement of performance management.


PROBLEMS IN TRADITIONAL PERFORMANCE MANAGEMENT

Traditional performance management practices are not effective for use against business organizations entering increasingly fierce competition at the global level, because the characteristics of traditional performance management are as follows:

1. Traditional performance management focuses too much on static job descriptions. The static job description is used for employee performance appraisal standards. The job description is not adaptive to the rapid and rapid changes in the external and internal business environment.

2. Traditional performance management focuses on the individual. Focusing on individual performance causes work to be compartmentalized in a hierarchical system. Performance management focuses on individuals, tends to make individuals will only care about individual performance, which can sacrifice the performance of other employees, team performance, and organizational performance.

3. Traditional performance management expects performance to be stated in standardized targets or management by objectives. If the performance achieved by employees and the management team is not in accordance with what has been set or standardized, then the employee's performance is considered not good.

4. Traditional performance management is oriented towards work volume and cost savings. Employee performance is declared good if the employee works to produce a large volume of work and saves a lot of costs.

5. Performance management feedback from one source, namely from superiors. Feedback assessment only entrusted to the manager or supervisor, will create a "boss as a performance manager". To get good grades in doing work, employees will try "as long as the boss is happy".

6. Traditional performance management focuses too much on separate administrative practices. Compensation, performance appraisal, evaluation and job descriptions often bring different problems and do not have a clear relationship between one goal and another.

7. Traditional performance management is too focused on the past. Focusing on the past distracts managers from seeing current and future business performance. Employee participation becomes passive. The business environment is changing rapidly, making it difficult for business organizations to make adjustments to the management of human resources and to the determination of business goals and priorities. Market demand continues to experience continuous improvement to what has gone before. Therefore, focusing on the past makes the organization not adaptive to changes in market demand that occur.

8. Traditional performance management corrects something wrong. Traditionally oriented performance management does not prevent problems, but rather is oriented towards correcting something wrong.

NEW PERFORMANCE MANAGEMENT

Traditional performance management is no longer effective for use in current and future business conditions. Traditional performance management must be abandoned and replaced with new performance management.

New performance management can be explored using several approaches, for example: total quality management, reengineering, fast-response organization, and organizational development. In managing every process in today's business organizations, there is a tendency for organizations to implement total quality management, as a new paradigm of management. The exploration of new performance management in this paper is carried out by changing traditional performance management into performance management which is rooted in the principles of total quality management.

Principles of Total quality management

Total quality management is a management concept that focuses on the collective efforts of all managers and employees, to meet customer satisfaction with continuous improvement in various areas. Total quality management is a philosophy that can be used to create organizational strategies, to get superior organizational performance.

Total quality management is a means to manage change, which is a challenge that must be faced by every organization in a dynamic and global business environment. Total quality management introduces a strategic objective to quality that requires an integrated approach that helps organizations to generate and develop outputs, not only to meet the needs of internal customers. The essential Total quality management principles are: systematic improvement, customer focus, long term commitment, problem prevention, and quality as everyone's job.

1. Systematic improvement. Total quality management is a systematic approach to quality with step-by-step improvements. Many improvement programs focus on specific problems that are analyzed statistically, delegated to subordinates, or marked with slogans at certain times. More than that, Total quality management is used as an organizational improvement strategy which is essentially a commitment to change the way the organization thinks.

2. Focusing on the customer. Total quality management focuses on the customer, not on the volume of work or costs. Total quality management chose the definition of quality initially related to technical specifications of output, service requirements or productivity measurements. Currently, Total quality management as a more holistic approach, includes the implementation of fulfilling customer needs by trying to satisfy customer needs in all business processes.

3. Long term commitment. In Total quality management, the quality competition is conducted in a marathon, not just temporary, and short term. In most organizations, real quality will not occur without a fundamental change in organizational culture and the way business works. Total quality management pays attention to the results of lower-level employees, the company takes the best possible time to examine how to manage employees, and inspire employees to make the best output. Next, Total quality management introduces constant follow-up, reinforcing feedback, and updating of values ​​and processes that are also critical to the success of business organizations.

4. Trouble prevention. Total quality management is a strategy oriented to prevent, not defensive and not only pay attention to correcting damaged output. Total quality management includes identifying actual and potential problems to eliminate defective output. Total quality management also requires the assistance of human resources programs and policies to motivate employees to involve themselves in identifying problems and then giving the results to management.

5. Quality as everyone's work. In Total quality management, quality is everyone's job, not the property of expert staff. Everyone contributes to the quality and protection of customers from poor product/service quality. Total quality management covers the organization as a whole, from top management to lower-level employees. High commitment to the organization shown by top management, is fundamental to the success of Total quality management and must be supported by the participation of members of the organization at all levels. Teamwork is also important for strengthening mutual support and cooperation to provide high quality products/services for customers.

New Performance Management Characteristics

The new performance management based on Total quality management will lead to the best performance of employees, teams and organizations. The following are the characteristics of the new performance management (NPM) based on Total quality management:


based on customer needs and expectations. Performance management expectations are those that are related to the organization's business plan. The way employees work, which initially focused on static job descriptions, turned into dynamic job descriptions. A dynamic job description is focused on satisfying the needs and expectations of external and internal customers, which are constantly changing.

2. Focus on team and individual. In order for improvements to employee empowerment to be successful, NPM employs individuals not in a hierarchical compartmentalized system, but must work as team members, function members, and as part of a process that all leads to the organization's common goals. Management policies (including performance management) are aligned with employee education, training and development policies aimed at improvements that support teamwork.

3. Stated in the target of improvement. The performance expectations stated in the improvement targets are not stated as standard targets or targets in management by objective (management by objective). Improvement targets are communicated for the achievement of the following criteria: 

a) can be measured and observed, 

b) control and influence individuals and teams, and 

c) affect processes significantly enough to better meet customer expectations.

By using performance expectations, individuals and teams understand not to rely on something standard. They are encouraged to actively take part in more complex solving actions. If an individual or team has met customer needs in one area, more attention is directed to other areas of performance. Customer expectations are not static, but continue to change in line with environmental changes that will occur.

4. Oriented towards achieving quality performance and customer satisfaction. Performance expectations are oriented towards achieving quality performance and customer satisfaction. Everyone must contribute to quality and protect customers from poor product/service quality. Total quality culture requires individuals and teams to pay attention to how they make continuous improvements. Quality is a reflection of detailed attention or analytical thinking used to complete a task or carry out a procedure. Quality is a reflection of attention to detail or completing a task or carrying out a procedure. Total quality and superior customer service are ways to perform performance management.

5. Performance feedback comes from many sources. Performance feedback should be from customers served by employees or teams. Customers consist of external customers (customers, community and other external stakeholders) and internal customers (employees, leaders, and stockholders). Employees and supervisors play an important role in performance management, if they provide performance feedback to themselves and provide performance feedback to other people or teams.

6. Interdependent collective units. NPM focuses on multiple integrated systems, consisting of individuals, teams, processes, and business units. The elements in performance management are integrated, cannot be separated from one another. If performance appraisal is to be discussed, then the discussion of performance appraisal must relate to other elements in performance management. In addition, in MKB, organizations increase the role of individuals in the context of interdependent collective units consisting of teams, programs, or processes.

7. Oriented to the future. By being oriented to the future, MKB encourages employees to be active participants. Each employee or team with managers and supervisors identify and assess: customer expectations, continuous improvement targets and skills needed for continuous improvement.

8. Problem Prevention. MKB is prevention-oriented, not defensive and not only concerned with correcting faulty output. By being oriented towards preventing problems, MKB is able to minimize problems that will arise.

Taking into account its characteristics, the new performance management based on Total quality management is suitable for use in current and future global business conditions and will lead to the best performance of employees, teams and organizations. 

DEVELOPMENT SUPERVISION

Supervisors must be developed to play a role in implementing the new performance management. The successful implementation of Total quality management relies heavily on the effectiveness of supervisors in managing human resources. Supervisors play a role in the process of assessing, planning, and implementing Total quality management in the new performance management. The following are the main ways managers and supervisors play a role in improving performance management based on Total quality management.

1. Diagnose organizational readiness. Quality programs cannot be ordered with managerial authority. Supervisors must recognize that an organization is not just a line of authority but as a complex combination of structures, processes, resources and staff. Implementation of total quality management often requires a new structure and a new work environment. An analysis of the organization's readiness to implement total quality management must be made before the new performance management is launched (Bader and Bloom, 1992, p.62).

2. Conduct value chain analysis. All functions contribute to quality from the customer's point of view. Value chain analysis is very important to understand how each job works together to meet customer needs and expectations.

3. Doing long-term planning. Efforts to produce quality output in accordance with customer needs and expectations, it takes a fundamental change in organizational culture and the way business works. Change is not made only temporarily and in the short term, but requires long-term and sustainable planning. All employees' vision is responsibility for customer satisfaction that must be upheld by all employees.

4. Develop a new performance management communication and training program. Supervisors can assist top managers in communicating and training performance management to employees. The development of a customer-oriented culture must be communicated to all employees. It is very important to carry out continuous training, job rotation, and job enlargement programs.

5. Supervisors become mentors and advisors. Supervisors serve as mentors and advisors to help identify customer, departmental, and organizational expectations. The supervisor directs employees to improve their knowledge, skills and creativity so that they can become professional employees and are able to achieve the total quality vision of the organization.

6. All employees as internal customers. Supervisors should regard all employees as internal customers in the new performance management system. As an internal customer, the supervisor must involve employees in the design of the system. Moreover, feedback on work comes from many different sources, not only from supervisors, but also from internal and external customers. Customer satisfaction will be more fulfilled with job feedback from various sources.

7. Regular testing. Supervisors need to regularly test how far Total Quality Management is used as the basis for new performance management. The supervisor takes a sufficient sample of job performance to observe the behavior and performance of all employees.

8. Partnership Relationship. Managers and supervisors encourage a partnership relationship between superiors and subordinates. This partnership relationship requires mutual trust, respect for people, and encourages continuous improvement.

9. Supervisors actively provide information. Supervisors must actively provide information related to organizational performance to employees, as internal customers. Employees feel the need to obtain information about how their department is and information about how the organization works. Relevant and timely information can increase each individual's commitment to achieving organizational success. In addition, supervisors encourage all employees to be willing to provide management with any information related to performance management.

10. Supervisors act as leaders. The new performance management requires not only management, but also leadership. Besides being a manager or supervisor, the management team of an organization must act as a leader. There is a difference in understanding between a manager and a leader. Managers are people who do the things right, and leaders are people who do the right thing. The leader formulates the mission, vision and values, while the manager realizes or implements the mission, vision, and values ​​that have been formulated by the leader (Gutierrez, 1993, pp. 33-34)

Many models of leadership can be used to develop effective performance management supervision, for example: contingency theory, development of supervision, situational leadership, and seasonal supervision that support new performance management improvements. The general idea of ​​these approaches is as follows: 1) employees have different levels of knowledge, skills, and motivation, 2) there is no one best way to supervise employees, and 3) supervisors must adapt to using different styles. adapted to the conditions of employees.

In managing employees, the supervisor style must be adjusted, because the backgrounds of employees are different. Although different, employees can be grouped into four groups (groups) to make it easier for supervisors to determine the style used to supervise employees, which are as follows:

Group 1: Employees who are highly motivated and have the knowledge and skills necessary to carry out the work. In this group, the suitable supervisor style is the non direct style. Employees are actively involved in making improvement programs.

Group 2: Employees who are highly motivated but do not have the necessary knowledge and skills to carry out their duties. The collaboration style of the supervisor is suitable to give employees more responsibility for the development of their work.

Group 3: Employees who have the necessary knowledge and skills but the knowledge and skills necessary to carry out the task. The directive style of the supervisor is the best way for this group. Supervisors expend a lot of time, energy, and thought to guide, train, and develop this group's employees.

FOUR STAGES OF PERFORMANCE MANAGEMENT IMPROVEMENT

The Total quality management training program teaches Walter Shewart's four-stage model – plan, do, check, and act – for continuous quality improvement. This model provides a superior structure for redesigning performance management. In work management, the four stages are given a new name: planning, implementation, reflection, and compensation. The four stages of continuous improvement of performance management – ​​called the performance management model – are a relentless and endless cycle of continuous improvement. The performance management model can be depicted in a pie chart (see Figure 1). Performance management model can be used to perform cooperation, involvement, and empowerment of employees. In making this performance management model, leaders and employees together in a meeting are actively involved in improving performance management based on total quality management.

Planning

Performance planning in this context is the initial stage of the performance management model. In making plans, it is done through meetings or meetings. The important activities in this planning stage are:

1. Identifying external and internal customer needs. Every internal customer has performance requirements that are used to create effective performance management. The results of identifying customer needs are considered in the preparation of performance management plans.

2. Obtain and provide performance information that records deviations that occur. Organizational members need performance information about how the organization and work units carry out activities. Through meetings, managers can get a lot of performance information from employees. By extracting information from employees, employees feel cared for, which will create employee empowerment. All employees and the management team should be fully aware of the new performance management. Employees who have more information have the ability to contribute more to problem solving and continuous improvement. Moreover, analysis of variance in performance is important for establishing upper and lower limits of performance and developing performance standards.

3. Researching organizational skills and capabilities. Assessment of organizational skills and capabilities is an aspect of planning. The results of the assessment of organizational strengths and weaknesses are used to develop organizational performance plans. An assessment of the organization's work processes as a whole is used to develop a performance plan as well as a process improvement plan.

4. Deliver or align the mission, vision, and strategic plan. The mission, vision and strategic plan must be communicated to all employees and the management team. The vision is not sufficiently stated by top management. Empowerment of all individual employees can be started by helping individuals to get a touch of vision that is related to the vision of the organization. They take part in creating a vision that supports commitment and alignment in continuous improvement of performance management. The purpose of sharing or distributing vision is to provide guidance and control to individuals and teams in doing work, so that they are able to achieve high performance in accordance with customer expectations.

5. Identify organizational, team, and individual goals. The company creates planning teams in the form of across function teams consisting of representatives from all levels of management. These teams have access to cross-sectional information that will provide the basis for developing linkages between the objectives of the planning factors: mission, vision, organizational strategic plans, key result areas, organizational operational goals, work group goals, and individual goals.

6. Make a realistic budget. Creating a realistic budget is an important form of the planning process. All budgets require a variety of assumptions, and planners need to make those assumptions explicit. Realistic budgets related to performance management include cost plans for: work process improvements, continuous improvement projects, plans for awarding individuals and teams, training and development, and career management. Employee training and development is directed at adopting new technologies, working in efficient teams, and creating networks across functions.

Implementation

This implementation stage is the stage of implementing what has been planned in the first stage. This stage is immediately carried out through meetings or meetings. The important activities carried out in the discussion of the implementation phase are as follows:

1. Hold a discussion on job expectations. Together, they analyze the work of all employees in the work unit and the needs of internal customers. In this discussion they discuss: 1) what employees are currently doing at work, 2) how the work is carried out (process goals), 3) what assistance is needed (equipment, information), 4) what work outputs are expected, and 5) knowledge. , what skills, and abilities are needed to do the job. 2. Improve job descriptions. The results of the discussion of job expectations are used to improve job descriptions. The supervisor and all employees define process objectives and discuss work methods. Process objectives should be linked to performance output goals.

3. Develop performance contracts with each individual and team. Discussions at this stage form the basis for contracting performance expectations. All employees and work teams should establish performance expectations contracts with managers. The contract should include measurement of performance objectives and process improvement objectives. The contract should specify how achieving goals will affect pay.

4. Provide regular consultation to individuals and teams. In the implementation phase, managers provide regular consultations to individuals who encounter obstacles or problems that occur in carrying out their work. The supervisor together with each employee and each work team follows up on problems or obstacles that occur. Supervisors should be quick to respond to identify and note obstacles. More severe obstacles should be discussed with top management.

5. Provide continuous performance information. In this stage, individuals also need continuous performance feedback to increase or maintain high motivation and efficient performance. Feedback can be in the form of a visual graph of a performance. Feedback is used for measurement: quality, timeliness, and productivity which is then compared with the set goals. Several charts can be used by employees to: monitor and find ways to improve their performance. On a regular basis, performance information should be provided to employees where the information is available, on a daily, weekly, monthly basis.

REFLECTION

Reflection is the same as the “check” stage in the “plan-do-check-act” model. The reflection stage is the stage of comparing the results of implementation with what has been previously planned and following up if there are deviations between implementation and planning. In this stage, the manager/supervisor meets with all employees to discuss work reflection. Together, they assess employee behavior and performance and discuss using and developing skills. Important activities in the discussion of the reflection stage are as follows:

1. Collect assessment feedback. To prepare for a job reflection discussion, supervisors need to gather feedback from a variety of sources. Feedback from multiple sources is better than feedback from a single source, which is the case in traditional performance management. Feedback from multiple sources avoids potential judgmental deviations as occurs in feedback from a single source – the supervisor. Individuals feel more judged objectively with assessment feedback from various sources. They can learn more about how work behavior affects other people and customers.

Reflection discussion provides an opportunity to discuss some of the problems that occur in employee members. Supervisors can assist all employees in self-development, work process improvement, and understanding of their contribution to greater work process improvement.

2. Testing the use and improvement of skills. During reflection discussions, supervisors take on the role of equipping employees to test the use and improvement of skills, and to identify areas that need improvement. In some cases, debriefing is necessary to help the individual to accept unwanted negative feedback.

3. Give feedback. The discussion at this stage provides feedback to the work team on strengths/advantages and areas that need improvement. The appraisal of all employees from the supervisor (upward appraisal) is a key component in the performance management process. When an upward appraisal is used, each supervisor collects feedback from staff employees, then together with the manager assesses (tests) the information in a meeting. Together, they assessed the feedback assessment and identified the strengths and weaknesses of supervisory and leadership behaviors. The final discussion is to determine improvement goals and action plans, through trainings to improve weaknesses.

Compensation

In this stage, the meeting discusses the compensation system used to reward or assess performance. Performance appraisal with compensation should be established and involve individuals and teams. The important activities discussed in the compensation stage are as follows:

1. Linking performance with wages. This discussion is used to discuss the relationship between performance and wages. An effective compensation system should aim to motivate individuals to optimally use their abilities, skills, knowledge, and to create and maintain high individual and team performance. A good compensation system believes that a partnership between managers and employees in a performance contract is developed through a mutually beneficial relationship, by understanding the relationship between wages and performance. Each employee should be assessed according to the criteria set out in the job expectation contract. In addition, in a true partnership, each employee has the opportunity to self-assess before receiving an appraisal from the manager.

2. Determine compensation for individual contributions at three levels: individual, team, and organizational. Some companies get three levels of effective compensation systems, namely: 1) based on individual performance, 2) work team performance, and 3) organizational performance. At the individual performance level, organizations can use merit-based pay to reward employees, which is in accordance with performance contracts. In addition, organizations can add skill-based pay to reward upgrading and use of expertise. On team performance, the gainsharing plan can be used to improve work processes that can produce higher quality or lower costs. In the new performance management, the type of compensation gainsharing plan becomes very important to reward individual performance in a team and organization.

3. Using a combination of total compensation system. The combined use of total compensation will result in better compensation objectives than using only a portion of the total compensation system. Compensation is divided into two major groups: extrinsic rewards and intrinsic rewards. There are two kinds of extrinsic (monetary) rewards: direct compensation and indirect compensation. Direct compensation consists of basic wages and salaries, and performance-based pay. Performance-based pay and two parts: traditional (merit pay plan) and variable-pay plan (skill-based pay, gainsharing, and profit sharing). Providing total compensation to all employees and the management team provides a strong link between compensation and performance.

CONCLUSION

Today's business organizations need a performance management system that aligns people management with managing the business. Taking into account its characteristics, traditional performance management is no longer effective for use in business organizations entering the global competitive market. Therefore, traditional performance management is abandoned and replaced with new performance management. Taking into account its characteristics, the new performance management based on Total quality management is effective for business organizations that are entering an increasingly fierce competition in the global market. However, the implementation of the new performance management in an organization can be successful, if it is supported by the full and comprehensive implementation of Total quality management in every organizational process.

To anticipate changes in the organizational environment that are fast and dynamic, new performance management practices are adjusted through continuous improvement that is tireless and has no end. Performance management model consisting of four stages (planning, implementation, reflection and compensation) can be used for continuous improvement. Managers and supervisors along with all employees will use performance management practices as a tool to contribute to the determination of the new, dynamic organizational form and goals.

Rapid and dynamic changes in the business environment create challenges for business organizations, for example in the form of: 1) promoting new performance management to be fully implemented, 2) requiring managers and supervisors to ensure that individual and team contributions to organizational performance are: being rewarded, 3) convincing managers that improving the performance of employees and effective teams are able to direct the organization's performance to the best, and 4) making the management team and employees aware of learning to learn in order to improve performance management.


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