Performance Management System

There is an old management adage 'You can't manage what you don't measure' , which very simply puts into perspective the purpose, usefulness and importance of measuring performance in any organization.

The origins of strategic performance management can be traced to the concept of management by objectives (MBO).

Performance Management System (PMS) is a technique to establish individual performance objectives which are tangible, measurable and verifiable. It must be noted that Performance Management is more than a process involving objectives and reviews and appraisals and other mechanistic tools.

The increasingly competitive and constantly changing economic environment firms find themselves tapping into this critical asset which is a key to achieving sustainable competitive advantage.

Performance measurement is a key function of the human resource (HR) function. With the HR function gaining strategic importance, the importance of establishing effective performance management systems has gained considerable importance.

The following paper will analyse and critically evaluate the performance measurement systems at Royal Mail. It will also provide recommendations of how the performance measurement systems can be improved at Royal Mail.

The PMS focuses on the contribution which each individual makes to the work of the organisation/department and the emphasis is on management rather than appraisal - managing development and careers so as to improve the chances of achieving success.

It is based on clearly identifying roles and the range of competencies. The system is designed to give each person: clarity in terms of role, objectives and career expectations control in terms of participation, development and results, and contribution in terms of the business plan and the part they play individually and as a member of a team.

According to Bevan and Thompson (1992) the features that distinguish PMS from any other system is the fact that the organisation's visions and objectives are conveyed to all employees, not only departmental targets but individual targets are set as well, formal reviews of progress are conducted to achieve these targets, following the review training and development needs are identified and employees are encouraged to develop the needed skills and finally evaluation is carried out in terms of improving organisational effectiveness and supporting the use and value of human capabilities.

It would be important to highlight that the key elements and their respective purpose of performance management system is to have a have a process that establishes objectives that determine performance targets and goals.

Secondly, it also requires organisations to se accurate measures of performance for achievement.

Thirdly, a clear system of feedback must be established between the employers and employees so that individuals are aware of their strengths and weaknesses, and when required a channel exists to provide encouragement.

Finally, Organisations need good information on both performance and development in order to learn and direct resources effectively.

It is imperative for organisations not only to be able to have policies and procedures in place to set the standards of performance, it is equally essential to be able to measure them. ROYAL MAIL For decades Britain enjoyed a first class postal service that was the envy of the world. The industry was efficient and highly profitable, contributing millions to the Treasury's coffers. It offered value for money (with some of the lowest postal prices anywhere in Europe) and a high quality public service. Commercial freedom was meant to give Royal Mail more financial room for manoeuvre in an increasingly liberalised postal market. But, in reality, it has led to a short-term focus on cutting costs and restoring profitability which has seriously undermined quality and service standards and done nothing to address the years of chronic underinvestment. Hence, in an attempt to improve its service, Royal Mai set for itself a total of 15 measurable performance targets. The key idea behind this concept was not only to improve the services provided to the customers but also to improve the internal processes in the organisation. Thus in this respect, Royal Mail incorporated PMS and devised to meet the following aims, namely, " To deliver "world class" service at the defined market price. " To deliver a savings profile that reflects in excess of 10% savings over the life of the contract. " To deliver a national help desk handling in excess of 200,000 calls per year for PPM and reactive planning and tasking using hand held and related technology. Royal Mail Quality of Service targets Product Full Year targets % Results % First class stamped and metered 92.5 88.3 Second class stamped and metered 98.5 98 First class PPI 90.6 81.9 Second class PPI 97.4 94.3 First Class response services 90.3 73.8 Second class response services 97.5 93.9 Mailsort 1 91 86.4 Mailsort 2 97.5 95.8 Mailsort 3 97.5 97.1 Presstream 1 90.5 85.5 Presstream 2 97.5 96.3 Special delivery 99 97.7 Standard retail parcels 90 87.7 All postcode areas (except Lerwick, Hebrides, Kirkwall) to achieve 91% next day delivery of first class mail posted in that area to any other UK postcode 118 postcodes to achieve this 17 achieved this All postcode areas to achieve 92.5% next day delivery of first class mail posted in that postcode area 121 postcodes to achieve this 83 achieved this Source: Royal Mail* " To enable the organisational culture a chance to deliver a more customer focused, responsive service where excellence was the rule not the exception

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