Conceiving and Measuring Managers Performance

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Table of Contents

Introduction
Performance Management Indicators and Systems
Performance Management Process
Roles and Responsibilities of Managers
Contextual Performance and Organizational effectiveness
Operationalizing Managers’ Performance
Links between managers’ Contextual and Task Performance
Other tools that can be used to measure managers’ performance
Conclusion
References

Introduction

The success of every organization depends upon its management. The management incorporates the managing director who in most cases is referred to as the Chief Executive Officer (CEO) and the other middle level managers who are the heads of various organizational departments.

The CEO alone cannot adequately enhance the management of an organization and so the other management staff is equally important in critical decision-making. Successful implementation of company’s various strategies requires total commitment and cooperation on the part of the management of the organization.

Almost all organizations have stakeholders who have stakes either directly or indirectly in the organization (Goddard & Broad, 2010, p. 64). The manner in which an organization is run will attract varying attitudes from the stakeholders or any other external bodies that may be having direct link to the company.

These attitudes will be based on how the managers are running the organizations. It is important to assess managers’ performance t o ascertain how the set goals and objectives are being or likely to be achieved.

This will call for an appropriate action against those managers who are not performing accordingly and a different direction can be sought. The following report will try to analyze how the managers’ performance can be measured and the complications involved in the entire process.

Performance Management Indicators and Systems

There is no reason to retain a manager who cannot deliver. The managers’ goals should be in line with organizations’ functional goals and objectives. Managers must always be achievers and they should focus on getting the organization to the highest possible level. That is why poor performing managers are usually retrenched or have their contracts terminated because of non-performance.

The overall performance of an organization is the summation of all the individual sections’ performance in that organization. This calls for the people of high integrity, excellent credentials in their fields of management and well devoted to their work in order to achieve organizational goals. This calls for proper performance management in an organization.

Performance management is a tool for evaluating how the company has successfully achieved its goals and objectives and to what extend it has achieved them. This will direct the relevant authority to take the most appropriate corrective measures in time. Groove, Joby & Fisk (2006, p. 252) maintained that performance management can be applied based on performance management systems.

These systems can be used in line with specific consideration of behaviors (the manner in which work is completed) or results (the outcomes realized) or both aspects are used. Management by objectives is part of a performance management system based on measuring the outcomes.

Performance management systems can also be based on processes rather than results. These are competencies, intelligence, skills-based or professionalism (Goddard & Broad, 2010, p.67). Whichever the approach is adopted, it should give the best evaluation to determine the organization’s position and future potential prospects.

Performance management is a perpetual process of managing businesses. An appropriate assessment tool should be used to detect and assess how the managers are propelling the business. Proper monitoring of the performance of employees can yield substantial benefits to the organization. There are factors that can be used to tell whether an organization is under good management.

These include customer satisfaction, employee retention and profitability of the organization. A well-managed organization will satisfy the customers or clients through meeting their demand and offering high quality services.

Employees too are interested in remaining in an organization where their efforts are being appreciated and this can be achieved through ensuring proper communication channels are maintained, proper delegation of duties, specialization and division of labor and motivating them by showing appreciation to them for example promoting them when they deserve it.

A company or an organization that fulfils these factors gives a clear indication that the performance of managers is going well.

The relationship between the employees of an organization and the top management is another critical issue that should be given a priority in measuring the performance management. The managers ought to give feedback to the employees on a regular basis concerning the ongoing of the organization.

This is important information since it makes employees aware of how far the organization has gone in achieving the set goals and objectives and how development plans are faring. This information also identifies areas that need to be improved. The employees are able to adjust their efforts based on the feedback they get from their managers.

The management team of the organization determines this relationship in most cases. There are some managers who do not give their employees freedom to express themselves or do not involve them in any decision making process of the organization. Such managers are harsh and portray dictatorial style of leadership and they expect things to be done as they direct regardless of whether they are wrong or right.

The ultimate outcome in such organizations is poor relationship between the management and the sub-ordinate staff and the employees perform their duties not because of respect but because fear has been instilled in them. Such managers are poor performers and can drive the organization into a bankruptcy position especially if it is a financial entity.

Performance Management Process

Aguins (2009, p. 75) asserts that performance management is a continuous process that involves a number of stages. The stages take place in a cyclical manner. The first stage entails acquiring information on the company’s strategic goals and mission as well as knowing the work in question well.

Performance planning is the actual discussion between the management and the employees and ensuring you come into a consensus on what should be done and how is going to be done. In performance assessment, both employees and the managers are involved and it evaluates the extent to which the desired behaviors have been attended to and whether the anticipated outcomes have been achieved (Groove, Joby & Fisk 2006 p. 255).

This is a very important stage as it provides an avenue in which the employee receives feedback on hi/her performance. Re-contracting is the final stage and is very essential to the planning component. It uses the insights gained from all other stages.

The managers’ performance receives varying conceptions depending on the relationship between the organization and the parties with stakes in the company (Jean-François, 2004, p.93). A poorly performing company can be criticized from different perspectives or reasons as to why it is being viewed that way. The opinions will depend on the expectations of the interested parties.

Let us for example look at the shareholders of a profit making company. The shareholders commit their funds in a company with one main reason and that is to get revenues or profits in terms dividends. A company may decide not to pay dividends for a particular year(s) because of low returns.

Subsequently since the shareholders’ expectations have not been met, they raise a complaint and if you go asking their opinions the answers you will get is that the managers of the company are performing poorly and they need to be replaced.

On another perspective, we might have the suppliers of goods and other materials and other creditors including banks. Delaying their debts will create a problem, as they will perceive that a company that cannot honor dues in time shows declining performance and the blame is laid on the management team of the company (Aguins 2009, p. 75).

Finally, the most important person who can destroy the company’s image if his/her expectations are not met is the customer. In the event that customer demands are not met either qualitatively or quantitatively, he/she can be very disappointed and shift the consumption of the products to another potential supplier in a highly competitive market.

Moreover, if you want to know who has been blamed in this context ask the customers and all the answers will be same, that they have no confidence with the management of the company in question.

These indicators can be used to measure the managers’ performance and instances of different conceptions from different parties. In fact, both the CEO of the company and the other managers must ensure that all the above aspects are adequately addressed.

It is important that measures of managers’ performance reflect the total value of work done. The set of behaviors that are relevant to the organizational goals where that person works is referred to as performance domain (Morse & Wagner 1978, p. 23). Performance must be measurable in accordance with managers’ contribution towards organizational objectives.

This is because failure of the management to achieve certain goals may be caused by an individual manager in a management team. For instance, low profits of a company might have been caused by low sales, which was because of poor marketing strategies by the marketing manager.

The other departmental managers might have played their roles well but due to failure of one of their teams, the blame will befall on the entire management team and in particular the overall manager. Therefore, good parameters should be used to assess the individual’s contribution towards performance of the company.

Performance is not a consequence of action. It is the action itself. Performance is different from effectiveness, which is viewed as the total values of the organizational behaviors. Nevertheless, this does not mean effectiveness measures do not have the utility for assessing performance of managers.

Valid assessments need that only variation sources in performance and effectiveness controlled by managers’ need to be assessed. Therefore, assessment of managers’ performance should incorporate only those elements that are within their scope of control (Sevastos & Hosie 2009, p. 148).

Management takes place within the organizational context. Therefore, for the sake of effectiveness, there must be a fit between the performance of managers and goals of an organization. Managers’ performance can be defined as the total value of contribution towards the effectiveness and the goals of organization attained jointly by the managers and people as determined by factors controlled by managers’ in a given environment.

Roles and Responsibilities of Managers

It is the managers’ responsibility to maintain as well as improve the performance of the people under his control, which in this case may mean the employees. There is a relationship between managers’ performance and the level of achievement of organizational goals together with people (Aguinis, 2009, p.79). Managers should practice the principle of empowering by encouraging the employees.

Managers’ roles include policy formulation, strategy development, giving direction, facilitation and extensive monitoring of the performance of others. It is the role of managers to plan, organize, lead and control. T

hese roles have been linked to managerial behaviors, which are “direction setting, problem solving and decision making.” Managers’ behavior can easily be distinguished from that of non- managers: managers decide command and coordinate while performers implement, obey and undertake the specialized tasks delegated to them.

A manager should manifest his competencies and technical expertise through proper handling of things as well as coordinating them in the most appropriate manner possible (Grove, Joby & Fisk, 2006).

Minzberg (2004, p. 77) suggested that the managerial role ignores matters related to ownership and power and suggests that contingency factors yield variations in the managerial work characteristics.

These characters include environmental factors (physical location, climate and community characteristics), job matters (level of hierarchy, functions and level of supervision), individual variables (tastes, personality, preferences and style) and situational factors (technological advancement and time-related factors).

An organized set of behaviors form job role. Managers perform multiple roles to meet the increasing demands of performing their functions (Minzberg 2004 p. 80).

Contextual Performance and Organizational effectiveness

Many scholars from varying traditions agree that behavioral patterns that are outside formal job task requirements are significant for human performance, effectiveness, and profitability of organizations.

Contextual behaviors make a huge contribution in maintaining and enhancing social and psychological environment that facilitates technical production system (Lindberg, Bartholomew & Kaiser 2007, p.50). Actually, contextual performance leads to the improvement of effectiveness of departmental units and the entire organization.

There is a tentative link between effectiveness of an organization and Organizational Citizenship Behavior (OCB). Therefore, it is advisable to include managers’ contribution towards the effectiveness of an organization when measuring performance of managers. Contextual aspects of managers’ work are very critical and significant as far as the productivity of an organization is concerned.

Operationalizing Managers’ Performance

Past studies indicate that sometimes measuring managers’ performance is limited by lack of common metric for assessing the performance. Many different opinions have come up as to which measures are valid for measuring the performance of managers in an organizational context.

Measuring managers’ performance to come up with clear comparisons between managers from different domains and organizations is empirically difficult since managers’ work is faced with many complications.

Links between managers’ Contextual and Task Performance

According to Motowidlo, Borman and Schmits (1997, p. 72), the difference between task and contextual performance is shown by the figure below (Fig. 1.0)

Fig. 1.0 Theory of personal differences in contextual and task performance

Theory of contextual and task performance stemmed from the literature that was thought to be the best for developing a suitable measurement instrument. The theory dimensions make up the performance. Consistence maintenance of contextual behaviors across individuals may contribute to effectiveness in an organization. Contextual behaviors are directly linked to personality while task is linked to cognitive ability.

Contextual and task performance depend upon different predictors (Carmeli & Tishler, 2006, p. 25). Cognitive ability and personality are mediated by intelligence, skills and job habits. All classifications emphasize that behaviors that entails solidarity and assisting others contribute ultimately to the effectiveness in an organization.

The establishment of a good work environment for optimal performance can eradicate pressures on managers resulting from unrealistic performance demands (Lant & Shapira 2008, p. 79). This can be attained by reduction of the complexity of practices of organizational and accelerating job security.

Negative emotions have been identified as aspects of negative affectivity that lead to the managers’ perception that the environment is posing a threat to them. Too much pressurization in work that is too complex can result to negative or positive affectivity. Evaluations of affective well being and sufficient job satisfaction should be in line with working environment where the manager is operating.

Competence, devotion, commitment, and aspiration are some of the behavioral components of mental health associated with positive levels of affective well being and job satisfaction. High performing managers are in most cases exposed to challenging job assignments.

This gives them an opportunity to handle the most difficult and complex tasks and they can gain a valuable experience that can enable them work in varying job environments since there is proof they are achievers (Mintzberg, 2004).

Managers who spend substantial amounts of their time in jobs with less or no opportunities to gain skills and control mechanisms are likely to become incompetent. Highly motivated managers who like challenges may respond to risks in a manner that may raise their anxiety but without affecting their adverse well-being and sufficient job satisfaction (Micari 2007, p.460).

One way of enhancing affective well-being in managers is through allowing them a recreational leave after undertaking a highly complex and demanding work assignment.

Performance is defined more broadly than just considering whether the managers are completing their tasks and performing their duties accordingly. Additional factors like contextual performance need to be considered when forming an assessment of managers’ performance (Aguinis, 2009).

Other tools that can be used to measure managers’ performance

Sevastos & Hosie (2009, p. 140) pointed out there were other diagnostic tools used to measure managers’ performance. It should also be noted that these measurements must be quantitative, accurate, reliable and proactive to support the corporate culture. These tools are:

Foundation information: This refers to organization’s financial documents like profit and loss account, balance sheet and cash flows. Thorough inspection and auditing of these documents can indicate the financial position of an organization and tell how the managers have been performing.
Productivity information: This focuses on the productivity of key resources, labor in particular. The productivity will determine whether the there is Return on Investment on the part of the company. High productivity shows excellent managers’ performance.
Competence information: This is not an easy task. It tries to look at how many innovations a company has made. The more the innovations are, the better the management of the company.
Resource allocation information: This shows the manner in which resources are allocated in an organization. Optimal allocation of resources can give an indication of whether the company is under good management.

General Mental Ability (GMA) is a good predictor of work performance in general and managers’ performance in particular. From a theoretical perspective, the determining variables in job performance are GMA, work experience and individual trait of conscientiousness. Thus, there is need for incorporating a measure of conscientiousness in any consideration of the performance of the managers.

Conclusion

Measuring of managers’ performance is an elaborate exercise that goes beyond what managers are achieving within their organizations’ set goals and objectives. Organizational effectiveness alone is not a sufficient measure of the organizational or managers’ performance. The overall performance of a business entity or organization is the contribution of individual managers’ performance.

No performance of an organization can be attributed to individual managers’ contribution (Carmeli & Tishler, 2006, p. 20). Contextual behavior and organizational efficiency are equally important in assessing the managers’ performance and should be taken into consideration whenever any performance of the organization is to be carried out.

Many organizations ignore some critical factors that should not be left out while formulating a measurement criterion. It should be also noted that the measurement is a complex thing and as such, it calls for competence, experience and relevant skills to make it a success.

References

Aguinis, H. (2009) Performance management. 2 Ed. Upper Saddle River, NJ: Pearson Prentice Hall.

Carmeli, A. & Tishler, A. (2006) The relative importance of the top management teams, managerial skills International Journal of Manpower Vol: 27 Issue: 1 ISSN: 0143-7720 Date: 2006 Pages: 9 – 36

Goddard, A. & Broad, M. (2010) Internal performance management with UK higher education, Measuring Business Excellence, Vol. 14(1) pp. 60 –66

Grove, J., Joby, J. & Fisk, P. (2006) Improvisation in service performances: Lessons from jazz, Managing Service Quality, Vol. 16(3) pp. 247 – 268

Jean-François, H. (2004) Performance measurement and Organizational Effectiveness: bridging the gap, Managerial Finance, Vol. 30(6) pp. 93 – 123

Lant, T. & Shapira, Z. (2008) Managerial reasoning about aspirations and expectations, Journal of Economic Behavior & Organization, Vol. 66(1) pp. 60 – 73

Lindberg, T., Bartholomew, C., Kaiser, R. (2007) Assessing the Flexibility of Managers: A comparison of Methods International, Journal of Selection and Assessment, Vol. 15(1) pp. 40 – 55

Micari, M. (2007) Assessment Beyond Performance: Phenomenography in Education. Evaluation American, Journal of Evaluation, Vol. 28(4) pp. 458 – 476

Mintzberg, H. (2004) Managers not MBAs: A hard look at the soft practice of Managing and Management development. San Francisco, California: Berret-Koehler

Morse, J. & Wagner, F. (1978) Measuring the process of Managerial effectiveness, Academy of Management Journal, 21(1), pp. 24-35

Motowidlo, S., Borman C. & Schmit, J. (1997) A theory of individual difference in task & contextual performance, Human Performance, 10(2), pp. 71-83

Sevastos, P. & Hosie, J. (2009) Does the “happy productive worker” thesis apply to managers, International Journal of Workplace Health Management Vol. 2(2) pp. 131 – 160.

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