Factors Influencing Managing Organisational Performance

Factors Influencing Managing Organisational Performance Essay Sample

      Managing organisational performance is shaped by several factors that should be put into consideration. First, senior management should consider the effects of demographics and diversity in organisational labor force. In demographics, organisations have to ensure a good mix in age groups among labor force. This helps in assuring that organisational future is guaranteed through several generations of workers. The diversity (talent-wise, religion, ethnic among others) enables organisations to celebrate different cultures, which has positive effects on employee productivity. Second, skills and qualifications among the labor force should be put into consideration; it is the fist step in ensuring high quality employees. Management should do their best in ensuring that skills and qualification of employees coincide with requirements and activities performed regularly in the company. Otherwise aligning well qualified staff with the wrong job description would not lead to better productivity. Third, the management should consider effects of ready made and tailor made approaches to improving organisational performance.

The ready made approaches refer to systems that have been proven to work with competitors as well as other organisations. Tailor made approaches refer to management systems that are developed specifically for individual organisation. Both systems have been proven successful in increasing performance in organisations. However, most successful management systems are the ones that combine both approaches, especially when ready made methods are tweaked to befit organisational needs (Carter & Scarborough 2000). Fourth, impacts of employee turn over and retention should be considered. Turn over means the rate at which employees are coming and leaving the employing organisation, which could be caused by how they are treated or their own will. Turn-over arising entirely from employee will is preferred from that caused by poor treatment, except when redundancy is in play. With regard to retention, organisations are encouraged to develop incentive systems that would lead to the retention of high-performing employees, while doing away with poorly performing ones.

      PMS and organisational goals

      Performance management systems refer to systems that are used to help managers develop systems that are later forwarded to employees for implementation. Management have to be at the forefront of ensuring that the systems are well implemented and results are consistent or exceed expectations (Huselid 1995). PMS thus ensures that management and the labor force understand organisational long term goals and therefore collaborate in achieving them. Having employees understand the goals developed by the management makes it easy for them to set incremental short term goals that end up culminating to the long term ones. As employees embark on implementing strategies independently, management would afford time to focus on developing winning strategies for respective organisations. Frequent performance reviews done by the management helps employees to renew their understanding of organisational goals.

In these appraisal meetings, management should ensure on informing employees on their performance at current positions. These appraisal meetings are also used by employees to express their views on overall leadership management in managing labour as well as the entire organisation. With regard to linking with factors mentioned in ‘Section I’, PMS helps management to respective organisations’ ability to navigate through challenges. For instance, the performance reviews are used to distinguish between performing and non performing employees, the former are retained whereas the latter are helped to improve or relieved of respective duties. Trends in other factors such as demographics and diversity can easily be detected and necessary measures taken, failure of which expose organisations to long some long term operational inefficiencies.

      Merits and Demerits of PMS

      PMS is of great use in managing labor in respective organisation. However, lack or improper application of best practices could lead to regrettable consequences (Carter & Scarborough 2000). Below are some of the merits and demerits that could accrue from the system.


      Organisation using PMS tend to exemplify high performing labor force. Among the benefits include efficient policies, practices and processes that all in respective organisation know how to apply. This leads to self motivated employees that do not have to be followed by the management. Indeed, practicing organisations are able to develop work cultures that help in increasing productivity and performance. Organisations also benefit from development of organisational values that make employees feel completely as significant members of respective stakeholder group, which results to improvement performance (Schendel & Hofer 1998). In addition, members of the labor force and management end up understanding long term organisational goals that they end up achieving through best practices (Moingeon & Edmonson 1998).


Since PMS is completely developed and managed by organisational leadership, any failure of leadership to stick to the laid plan or lack of interest could lead to decreased organisational performance. Reason: members of the labor force would be left without an individual to provide guidelines. Secondly, PMS works wonders when management implements all processes in the right way. However, any failure to implement systems as it was planned could lead to poor results that consequently organisational performance. Thirdly, some PMS could lead to lack of balance between people and practices being put in place (Waterman & Peters 1982), which could lead to poor results.


Carter, C. & Scarborough, H 2000, The Report on Knowledge Management. CIPD, London.

Huselid, M 1995, Practices in Human Resource Management, Management Journal, vl. 38, pp 629-


Moingeon, B. & Edmonson A 1998, Learning Organization, Management Learning, vl 29, pp 4-21.

Schendel, D & Hofer, W 1998, Strategy Formulation and Implementation, West Publishing, St


Waterman, R. & Peters, T 1982, Searching for Excellence, Harper, New York.