Implementation of Performance Standards in an Organization Assignment Help
Imagine you are establishing performance standards to enhance organizational performance for a relatively new organization. Discuss the following: Create a rubric for two performance standards that will help enhance the organizational performance. Explain your rationale for creating these standards. Predict how these performance standards will help increase organizational performance. Justify your rationale with statistical data. Specify and explain the expected outcomes after implementing these performance.
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Performance standards are the basic sets of rules which are established by an organization or system in order to achieve the targeted goal and improve customer service. It is a form of written and measurable criteria against which the effort of an employee is evaluated for determining the level of functionality. According to the University of California, an organization is required to set performance standards for its employees and monitor their progress at regular intervals (Katzenbach, & Smith, 2015). This approach will help in improving the performance level of its employees which will eventually increase the productivity of that organization. In this consideration, the manager needs to design a set of standards for the employees that they have to abide with. In some cases, employees create their own personal standards which depicts their sense of responsibility for achieving personal and professional goals. For measuring employee performance, organizations use general measures such as quality, quantity, timelessness, and cost-effectiveness (Grant, & Shaw, 2019). While establishing a performance standard, the organization should consider it to be objective, realistic, measurable, and clearly stated. There are different types of performance standards like historical performance standards, competitor's performance standards, performance standards, and absolute performance standards (Katzenbach et al 2015). This paper will address two performance standards selected for a relatively new organization which are; absolute performance standards and competitor's performance standards. These performance standards are used in this contest because the organization is newly-established and it has no past performance record.
The absolute performance standards act as a benchmark for the organization in terms of quality control. It is an effective approach to measure the efficiency of the business and its employees. Using this approach, the business can identify how far it is falling from its prescribed benchmark. Regular monitoring of business performance will help in increment towards absolute performance standards. It is one of the most used methods by the organization to measure their progress and efficiency. The rubric for implementing absolute performance standard in the organization is described as follows (Amaral, & Cuthbertson, 2016):
- The workplace within the organization must support the management and employees to achieve their optimal results.
- All the older faulty instruments should be removed for avoiding poor performance.
- It should also consider to provide employees with appropriate training, to make them come close to the absolute performance standards.
In this context, a zero loss absolute standards will be implemented, as a measure to ensure quality control and performance are delivered without any flaws. The managers will encourage employees to finish the project in each quarter without any mistake and cash shortage (Katzenbach et al 2015). Moreover, to encourage employees the organization will also provide a pay-for-performance system for the merit workers (Taylor, Peoples, & Petersen, 2016).
A competitor performance standard is an approach where the performance of the company is compared against a number of competitors by using a set of metrics (Bennett, Bettis, Gopalan, & Milbourn, 2017). The benchmarking criteria are used to easily spot the advancing or struggling performance of the competitors. This will eventually help the company to design strategy according to the competitor's performance. When the competitor's position rises, it means either they are trying something new or something is wrong on the other end. One of the most effective ways of setting competitor's performance standards is through SEO metrics (Boateng, Akamavi, & Ndoro, 2016). In this regard, software named Moz can be used to measure website performance. The performance level on the website is public to all and thus, there will be no problem in assessing it. However, Moz software is a paid tool and will be slightly costly for the company. Moreover, a benchmarking survey will be conducted by asking questions and taking feedback from customers about their specific requirements. This approach will be conducted privately and it provides valuable insight into the company (Boateng, et al 2016).
The rationale for creating these standard
In this context, absolute performance standard has been selected because it helps in predictive the real outcome makes considering the specific environmental information. It is a theoretical quality control benchmark that assures zero error, defect, and losses in organizational performance (Dubey, R., Gunasekaran, Childe, Papadopoulos, Hazen, Giannakis, & Roubaud, 2017). It helps to identify the strengths, weaknesses, knowledge, behavioural traits, reliability, and team work of the organisational workforce. It is chosen by most of the company as it improves its business performance. It provides improved performance as it includes the expense of training and new resources (Bititci, Cocca, & Ates, 2016).
On the other hand, competitor's performance standard has been selected to set a benchmark for the newly-established organization. It is impossible for the new organization to reach to the top position immediately after its establishment. The method has been chosen as it helps to identify performance gaps, available opportunities, and relative competitor strategies for the newly developed company. Thus, analysing competitor's performance and accordingly planning the strategies will be an effective strategy (Twaissi, & Alhelalat, 2015).
Effect of performance standards on increasing organizational performance
The organizational performance can be examined by determining the reliability of service provided by the organization and understanding the satisfaction level of customers. According to Vroom's expectancy theory, there exists a positive relationship between the given effort and output performance (Hemmington, Kim, & Wang, 2018). The implementation of Absolute performance standards and pay-for-performance incentive programs will develop the performance level of the individual employee. Moreover, examining competitor's performance and their loopholes would help the company to plan accordingly (Bititci et al 2016). Hence, it can be expected that by using these performance standards the company will be able to gain competitive advantage within six months of its establishment (Hemmington et al 2018).
Outcome after implementation of performance standard
The average cost involved in providing training related to specific programs and applications to the employees will be approximately $12, 000. Additionally, buying new resources and instruments will cost the company around $25, 000. Similarly, the subscription cost for Moz software is $99 per month, which is $1188 annually. Finally, the cost of conducting a survey on customers will be approximately $2000. Considering these expenses in the initial stage, the profit in the first six months will be quite low (approximately $20, 000). However, the company need not invest again after on boarding and buying new resources, which in turn saves its extra expense (Amaral et al 2016). After 12 months of the company's establishment, the expected profit is approximately $60,000. Hence, it can be concluded that the outcome of 12 months will be more than the initial 6 months, due to additional experience, market knowledge, and minimal investment on training and procurement (Katzenbach et al 2015).
In brief, the report illustrates the concept of the performance standard and its importance on organizational performance. Here, absolute performance standard and competitor's performance standard has been selected for a newly established organization. It is learned that effective use of performance standards on the employees by the manager will help in improving the performance in terms of quality, quantity, time and cost. It has been inferred from the report that the inclusion of these performance standards will lead to an additional cost related to training for employees and the procurement of new resources. Moreover, there will be an additional expense towards purchasing software to analyse a competitor's performance and conducting a customer-based survey. Thus, the profit on the initial stage will be less as compared to the long run.
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