Brief Report on Organizational Culture and Performance Management

8/2/2019 Brief Report on Organizational Culture and Performance Management

1/7

A Study of Organizational Culture and Performance Management Page 1

BRIEF REPORT ON ORGANIZATIONAL CULTURE AND

PERFORMANCE MANAGEMENT

PREPARED BY:

TARANDEEP SINGH


2/7


ABSTRACT:

Organizational Culture is the essence of any organization in working and the performance of the

employees at work defines the culture of the organization. So organizational culture and performance are

the two interlinked aspects of any good and sound working environment. With the importance of

performance comes the need to evaluate the performance and hence performance management plays a

crucial role into any organizations need to match with the high standards of organizational culture. Also is

the need to understand the requirements of having a good culture and effective appraisal mechanism in

place which is undertaken in this report. This report in brief deals with the organizational system, rites,

culture, management and also performance management and its importance to any organization. There is

account of strengths and weaknesses of having a defined organizational culture in place.

ORGANIZATIONAL CULTURE:

Organizational Cultureis defined as A pattern of shared basic assumptions invented, discovered, or

developed by a given group as it learns to cope with its problems of external adaptation and internal

integration" that have worked well enough to be considered valid and therefore, to be taught to new

members as the correct way to perceive, think and feel in relation to those problemsEdgar Schein.1

Views on Organizational Culture: Culture as Root Metaphor takes the perspective that culture is

something the organization is. Culture is basic, but with personal experiences people can view it a littledifferently. This view of an organization is created through communication and symbols. There can be

competing metaphors.

The organizational communication perspective on culture views culture in three different ways:

Traditionalism: Views culture through objective things such as stories, rituals, and symbols Interpretivism: Views culture through a network of shared meanings (organization members

sharing subjective meanings)

Critical-Interpretivism : Views culture through a network of shared meanings as well as thepower struggles created by a similar network of competing meanings.2

1Shein, Edgar (1992). Organizational Culture and Leadership: A Dynamic View. San Francisco, CA

2Modaff, D.P., DeWine, S., & Butler, J. (2011). Organizational communication: Foundations, challenges, and

misunderstandings (3rd ed.). Boston


3/7


Indicators of Organizational Culture: There are many indicators to describe organizational culture given

by some of the professional people in the business such as:

1. Hofstede Views2. OReilly, Chatman and Chadwells Views3. Deal and Kennedys Views4. Edgar Scheins Views

Of all, the most important views came from Gerry Johnson describing a cultural web indentifying a

number of elements to describe Organizational Culture as: 3

The Paradigm: What the organization is about; what it does; its mission; its values. Control Systems: The processes in place to monitor what is going on. Role cultures would have

vast rulebooks. There would be more reliance on individualism in a power culture.

Organizational Structures: Reporting lines, hierarchies, and the way that work flows throughthe business.

Power Structures: Who makes the decisions, how widely spread is power, and on what is powerbased?

Symbols: These include organizational logos and designs, but also extend to symbols of powersuch as parking spaces and executive washrooms.

Rituals and Routines: Management meetings, board reports and so on may become morehabitual than necessary.

Stories and Myths: build up about people and events, and convey a message about what isvalued within the organization.

Strong and Weak Cultures: Strong culture is said to exist where staff respond to stimulus because of

their alignment to organizational values. In such environments, strong cultures help firms operate like

well-oiled machines, cruising along with outstanding execution and perhaps minor tweaking of existing

procedures here and there.

Conversely, there is Weak culture where there is little alignment with organizational values and control

must be exercised through extensive procedures and bureaucracy.

Research shows that organizations that foster strong cultures have clear values that give employees a

reason to embrace the culture. A "strong" culture may be especially beneficial to firms operating in theservice sector since members of these organizations are responsible for delivering the service and for

evaluations important constituents make about firms. Research indicates that organizations may derive the

following benefits from developing strong and productive cultures:

Better aligning the company towards achieving its vision, mission, and goals.

3Johnson, Gerry (1988) "Rethinking Incrementalism", Strategic Management JournalVol 9


4/7


High employee motivation and loyalty. Increased team cohesiveness among the company' various departments and divisions. Promoting consistency and encouraging coordination and control within the company. Shaping employee behavior at work, enabling the organization to be more efficient.

Charles Hardy (in 1972) defined four types of Organizational Cultures as: 4

A Power Culture which concentrates power among a few. Control radiates from the center like aweb. Power and influence spread out from a central figure or group. Power desires from the top

person and personal relationships with that individual matters more than any formal title of

position. Power Cultures have few rules and little bureaucracy; swift decisions can ensue.

In a Role Culture, people have clearly delegated authorities within a highly defined structure.Typically, these organizations form hierarchical bureaucracies. Power derives from a person's

position and little scope exists for expert power. Controlled by procedures, roles descriptions andauthority definitions. Predictable and consistent systems and procedures are highly valued.

By contrast, in a Task Culture, teams are formed to solve particular problems. Power derivesfrom expertise as long as a team requires expertise. These cultures often feature the multiple

reporting lines of a matrix structure. It is all a small team approach, who are highly skilled and

specialist in their own markets of experience.

A Person Culture exists where all individuals believe themselves superior to the organization.Survival can become difficult for such organizations, since the concept of an organization

suggests that a group of like-minded individuals pursue the organizational goals. Some

professional partnerships can operate as person cultures, because each partner brings a particular

expertise and clientele to the firm.

Organizational Culture Impacts: numerous outcomes have been associated either directly or indirectly

with organizational culture. A healthy and robust organizational culture may provide various benefits,

including the following:

Competitive edge derived from innovation and customer service Consistent, efficient employee performance Team cohesiveness High employee morale Strong company alignment towards goal achievement

4Handy, C.B. (1990) Understanding Organizations, 3rd Edn, Harmondsworth, Penguin Books
http://en.wikipedia.org/wiki/Power_(sociology)http://en.wikipedia.org/wiki/Bureaucracyhttp://en.wikipedia.org/wiki/Matrix_managementhttp://en.wikipedia.org/wiki/Matrix_managementhttp://en.wikipedia.org/wiki/Bureaucracyhttp://en.wikipedia.org/wiki/Power_(sociology)


5/7


PERFORMANCE MANAGEMENT

Performance management (PM) includes activities that ensure that goals are consistently being met in

an effective and efficient manner. Performance management can focus on the performance of an

organization, a department, employee, or even the processes to build a product or service, as well as manyother areas.

This is used most often in the workplace, can apply wherever people interact schools, churches,

community meetings, sports teams, health setting, governmental agencies, and even political settings -

anywhere in the world people interact with their environments to produce desired effects.

Benefits of Performance Management: Managing employee or system performance facilitates the

effective delivery of strategic and operational goals. There is a clear and immediate correlation between

using performance management programs or software and improved business and organizational results.

For employee performance management, using integrated software, rather than a spreadsheet basedrecording system, may deliver a significant return on investment through a range of direct and indirect

sales benefits, operational efficiency benefits and by unlocking the latent potential in every employees

work day (i.e. the time they spend not actually doing their job). Benefits may include:

Direct financial gain

Grow sales Reduce costs in the organization Stop project overruns Aligns the organization directly behind the CEO's goals Decreases the time it takes to create strategic or operational changes by communicating the

changes through a new set of goals

Motivated workforce

Optimizes incentive plans to specific goals for over achievement, not just business as usual

Improves employee engagement because everyone understands how they are directly contributingto the organizations high level goals

Create transparency in achievement of goals High confidence in bonus payment process Professional development programs are better aligned directly to achieving business level goals


6/7


Improved management control

Flexible, responsive to management needs Displays data relationships Helps audit / comply with legislative requirement Simplifies communication of strategic goals scenario planning Provides well documented and communicated process documentation

Performance Measurement: Performance Measurement is an important aspect of Performance

Management. Without measuring techniques and mechanism in place, a good and healthy performance

cannot be evaluated and that could directly hamper the progress of any organization.

Principles of Performance Measurement:

All significant work activity must be measured.

Work that is not measured or assessed cannot be managed because there is no objectiveinformation to determine its value. Therefore it is assumed that this work is inherently valuable

regardless of its outcomes. The best that can be accomplished with this type of activity is to

supervise a level of effort.

Unmeasured work should be minimized or eliminated. Desired performance outcomes must be established for all measured work. Outcomes provide the basis for establishing accountability for results rather than just requiring a

level of effort.

Desired outcomes are necessary for work evaluation and meaningful performance appraisal. Defining performance in terms of desired results is how managers and supervisors make their

work assignments operational.

Performance reporting and variance analyses must be accomplished frequently. Frequent reporting enables timely corrective action. Timely corrective action is needed for effective management control.

Good performance is the criterion whereby an organization determines its capability to prevail.

Performance measurement estimates the parameters under which programs, investments, and acquisitions

are reaching the targeted results. However, a model for performance set faulty may depict a

disadvantageous situation which does not support the organization nor the thriving to the set aims.

All process ofmeasuring performance requires the use ofstatistical modeling to determine results. A full

scope copy of the performance of an organization can never be obtained, as generally some of the
http://en.wikipedia.org/wiki/Legislationhttp://en.wikipedia.org/wiki/Scenario_planninghttp://en.wikipedia.org/wiki/Documentationhttp://en.wikipedia.org/wiki/Measurementhttp://en.wikipedia.org/wiki/Statisticalhttp://en.wikipedia.org/wiki/Statisticalhttp://en.wikipedia.org/wiki/Measurementhttp://en.wikipedia.org/wiki/Documentationhttp://en.wikipedia.org/wiki/Scenario_planninghttp://en.wikipedia.org/wiki/Legislation


7/7


parameters cannot be measured directly but must be estimated via indirect observation and as a complete

set of records never delivers an assessment without compression to key figures.

Diagrammatic Explanation to Performance Reference Model5

for Performance Measurement as:

CONCLUDING REMARKS

Organizational Culture is the total sum of the values, customs, traditions, and meanings that make a

company unique. Corporate culture is often called "the character of an organization", since it embodies

the vision of the company's founders. The values of a organizational culture influence the ethical

standards within a corporation, as well as managerial behavior.

Also, Performance Management coupled with Performance Appraisal and Measurement Techniques

provide a great deal of help and defining tasks ahead for any organization.

5Office of the Chief Information Officer (OCIO) Enterprise Architecture Program (2007). U.S. Department of the

Treasury. May 2007

Documents

Brief Report on Organizational Culture and Performance Management