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Managing Change Through Performance Management


Managing Change Through Performance Management EMBA 642 Management of Change Thornhill et al Chapter 5 - Robin Snell To Cover Today: Managing Change Through ... – PowerPoint PPT presentation

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Title: Managing Change Through Performance Management

Managing Change ThroughPerformance Management
  • EMBA 642
  • Management of Change Thornhill et al
  • Chapter 5 - Robin Snell

To Cover Today Managing Change Through
Performance Management (Chapt 5 )
  • A. The case of Siemens Standard Drives
  • B. The performance management cycle
  • C. How performance management contributes to
    organisational change
  • Including the role of line managers in
    implementing performance management
  • D. (Extra material- not in Thornhill et al
    textbook) Managing resistance to change by
    helping employees rebuild self-esteem (actually
    derived from Colin Carnall)

A1. Case Siemens Standard Drives (1)
  • Employs 430 people in the Electronic Control
    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

A2. Case Siemens Standard Drives (2)
  • If a team member is under-performing, the team
    leader is empowered to remedy the situation
  • 10 of employees left voluntarily
  • The team leaders role is vital. They are in
    charge of
  • team building
  • running quality meetings and morning briefing
  • selection, training appraisal of team members
  • Teamworking values openness, honesty, trust,

A3. Case Siemens Standard Drives (3)
  • The team leader s job involves performance
  • setting individual performance objectives for
    team members
  • two way dialogue
  • explains to each member how they can make
    progress through the performance-related pay
  • Employees who do not add value are held
  • disciplinary procedures (including dismissals)
    are seen to operate
  • Efficiency customer responsiveness have

B1. Performance Management
  • PM is an integrated set of techniques designed to
    improve employees performance through
  • 1. Setting clear objectives for individual
    employees that link to strategic goals
  • 2. Formal monitoring and review of progress
    toward these objectives
  • 3. (a) Reinforcing desired behaviour through
  • (b) Identifying training development needs

B2. The Performance Management Cycle
Stage 1. Set objectives
Stage 2. Measure performance
Stage3. Feed back results
Stage 4. Process outputs (e.g. training
development, rewards)
B3. Potential Advantages of Performance Management
  • Improved individual effectiveness and
    organisational competitiveness
  • empowerment of line managers and supervisors
  • linking of rewards to individual and/or group

C. How Performance Management may Contribute to
Organisational Change
  • Performance management can do this by
  • communicating the organisations mission
  • linking employees performance objectives to
    company objectives
  • involving employees in decision making
  • helping restructuring by devolving decision
  • making managers manage
  • linking rewards to performance
  • reducing resistance to change
  • linking individual development to organisational
  • Helping with change adjustment in a work situation

C1. Communicating the organisations 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 also regular
    reinforcement through reviews
  • THEN
  • greater commitment to the mission
  • better performance

C2a. Linking employees performance objectives to
company objectives -1
  • Good performance management systems apply
    goal-setting theory, e.g.
  • SMART goals (already explained in the Managing
    Behaviour at work course and in the Robbins
  • Not imposed goals - performance management can
    make managers accountable to employees
  • Feedback regular, accurate and up-to-date

C2b. Linking employees performance objectives to
company objectives - 2
  • This requires a changed role of line management
  • from command and control to coaching,
    facilitating, team building
  • dialogue between line managers and their staff to
    ensure that the staff have the necessary resource
    to meet their performance goals.

C3. Involving employees in decision making
  • Some suggested good practices
  • Employees should, at the outset, be involved in
    designing the performance management system
  • The system should emphasise self-appraisal
    (usually more critical than appraisal by others),
    and involvement in identifying ones own
    development needs.
  • Include 360 degree feedback (upward feedback on
    how one is being managed)
  • This is more likely to lead to more enriched jobs
    through better job design, and ore satisfaction

C4. Helping restructuring by devolving decision
  • Performance management, IF DONE WELL, allows the
    wider organisation to better identify and
    understand what the business unit contributes to
    overall organisational performance
  • Individuals and teams may accept greater
    responsibility for their work if they can see
    exactly what they must achieve
  • Resource allocation becomes more clearly linked
    to business needs, and to customer demands. This
    focuses everyone's mind on how best to use
    limited resources to meet customer needs

C5. Making managers manage
  • Line managers play a vital role
  • they need interpersonal skills
  • transformational leadership
  • facilitation approach, not autocracy
  • Line managers become accountable for their
  • They must sometimes take tough decisions about
  • They must be able to justify and defend these
    decisions to the employees who are affected
  • They can no longer hide by finding excuses for
    not providing necessary support or resources.

C6. Linking rewards to performance
  • Performance related pay communicates the message
    the organisation is getting TOUGHER
  • It is a symbol, a visible artefact, designed to
    change deeper basic assumptions, e.g.
  • more achievement oriented, goal directed
  • more self reliant
  • more cost aware
  • But performance related pay must
  • be seen as equitable, i.e. people see that
    input/outcome ratios are fair
  • reward not punish INNOVATION

C7. Linking individual development to
organisational goals
  • Good PM systems pay attention to TRAINING and
    DEVELOPMENT, not just focusing on compensation
  • Good performance management systems help the
    employee and his/her line manager to identify and
    meet training needs, and identify career
    development potential.

C8. Help with Change Adjustment in a Work
  • Performance Management can ensure
  • 1. That people can grasp the new systems that
    they are working within, and their key result
  • 2 That people know the performance standards and
    reporting lines
  • 3. Time to informally play with new systems as a
    way of learning to familiarise and adjust
  • 4. Someone to talk to if staff need help or have
  • 5. Help for staff to regain and rebuild self

C9. Reducing resistance to change
  • Actually, the introduction of a performance
    management system may initially give rise to
    resistance to change
  • The following slides present a model of
    resistance to change, (from Colin Carnall, not in
    the Thornhill et al textbook) and explain the
    need for careful performance management to help
    people to adapt to change.

D1. Coping With Change
  • Change inevitably gives rise to anxiety,
    uncertainty stress
  • On top of this, the role strain of not being
    involved in decisions, and of having inadequate
    managerial support, may add to the stress of
    having to cope with technological and other
  • If the stress is too high, people get swamped
    and their performance and self-esteem collapses.

D2. Self esteem, performance, stress and change
Level of Self-esteem
Level of Performance
Amount of Stress
Amount of Change
D3. Change and Self Esteem
  • Significant organisational changes create a
    decline in self esteem for many of those who are
    directly affected
  • Rebuilding the self esteem of employees may be a
    key factor in helping them to recover their

D4. The Coping Cycle
D4a. The Coping Cycle - Stage 1 - Denial
  • People tend to prefer the present circumstances
    to any proposed changes, even if they had
    previously complained about them!
  • Sudden changes can result in mental paralysis
  • There is a feeling of being under threat
  • People will look for excuses why change is not
    necessary and may pretend that the change wont
    really happen

D4b. The Coping Cycle -Stage 2 - Defence
  • When people are faced with the realities of new
    circumstances they may become depressed and
    frustrated, not knowing how to deal with the
  • They may try to defend their job territory
  • They may try to reject new practices and

D4c. The Coping Cycle - Stage 3 - Discarding the
  • People eventually let go of (discard) the past
  • They may need support and the opportunity to get
    used to the new systems
  • They come to see the changes as inevitable and/or
  • They are ready and brave enough to try to make
    the new systems work
  • They need time to grow into the new situation
    and recover a sense of self esteem.

D4d. The Coping Cycle - Stage 4 - Adaptation
  • People learn to adapt to the new situation and
    try out new behaviours
  • Technical and operational problems are
    identified and modifications made to deal with
  • People continue to try to make things work and
    need the time and space to be able to do this

D4e. The Coping Cycle - Stage 5 - Internalisation
  • By this stage, people will have created a new
    system, process and organisation
  • The new situation has become normality
  • They have finally come to terms with the change

Covered Today Managing Change Through
Performance 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 by helping
    employees rebuild self-esteem (from a book by
    Colin Carnall Managing Change in Organisations)