Development and improved
performance
In an effective organisation, there should be an alignment of goals and objectives. Everyone's effort should be aligned so that every part of the organisation is working together and pulling in the same direction.
As a manager you are at the hub of your organisation - with a close understanding of the needs of your team, together with a strategic understanding of the needs of your business. This gives you a central role as a developer in the organisation. This theme asks you to consider the development process and use the development cycle to help you frame development activities for your team.
In this theme you will:
Examine the links between employee development and the organisation's goals
Identify your role as a manager in developing individuals
Explore the steps involved in the individual, team and organisational development process.
Linking development and
organisational performance
A key feature of the role of managers is to safeguard and develop the resources that they have been given. They are often supported in this role by the training and development (T&D) department or the human resources (HR) department. Such departments have a responsibility to help standardise and align training and development practices across the whole organisation.
In a business climate where new products and services, increased customer expectations and competition are the norm, organisations are increasingly dependent on having competent staff. The key resource in organisations is now knowledge and what has become known as intellectual capital. Skill and expertise in applying that knowledge is still the key differentiator between competing organisations. Investment in staff development must therefore be linked clearly to the overall aims, strategies and business plans of the organisation.
People – a key resource
Measuring the contribution of people to the performance of an organisation is not easy; but evidence of the link between organisational performance and people management is mounting. The nice words about people being the organisation's greatest asset may well be true, even if organisations don't always realise it in practice. Here are details of one study that supports the idea that people are very important to organisational performance.
Not everything that can be counted counts, and not everything that counts can be counted.
Aibert Einstein
(1879-1955)
A study by Linda Bilmes, Peter Strueven and Konrad Wetzker, of the Boston Consulting Group, sought to measure how well companies manage employees. They developed a ‘people scorecard’ – a set of criteria that can be tracked and quantified. The scorecard looked at HR functions such as recruiting, training and performance assessment and also what they call ‘intrapreneurship’ – creating an active entrepreneurial culture in the company. The study analysed more than two hundred companies in the US and Germany. Each company was rated and compared with industry peers.
The researchers found a relationship between successful companies and those companies that had effective HR and intrapreneurial activities. Companies that scored highest had a higher total shareholder return than lower-scoring companies. In the US, top companies had an average annual return of 27 per cent over the period 1989–1998, whereas the bottom ones earned 8 per cent. Companies with middle scores had an average return of 21 per cent, which is close to the 19.2 per cent average annual growth in Standard & Poor's 500 index.
In Germany, companies with the highest score had a shareholder return nearly three times higher than companies with the lowest score and 35 per cent above the median.
Bilmes suggests that companies can begin to create an emphasis on people by following eight basic steps:
Top-level commitment
Workforce development planning – regular assessment of business needs coupled with an assessment of how the workforce must change
Develop versatility – use development to meet business needs, but also to build the flexibility of the workforce
Training – linked to the personal and career development of the individual
Retain good workers – linking compensation to performance can influence employees’ loyalty
Structure work to foster intrapreneurship and decentralised decision making
Reward success – linking performance to compensation and reward attributes such as creativity, teamwork and skills development
Communicate the people factor.
Source: Bilmes (2001)
This study suggests that organisations that invest in their people perform better. A key aspect of this investment is to provide for development that is aligned to the organisation's needs.
Alignment of effort
Organisations recognise the need to create close alignment between goals that are set at a corporate level and those set at a local level. The idea here is that goals are cascaded down through organisational levels. This is not an easy task and at each level ambiguity will exist and a degree of mismatch has to be accepted. However, the intention is clear in that organisational goals should be used to focus efforts throughout the organisation. It is also obvious that this process of cascading can be used to identify and initiate development and training at each level. In this way the performance that is required to meet these objectives can be achieved.
Figure 1.1 illustrates this principle of cascading and linking in an organisation by showing how the goals at each level can be used to trigger a development activity. Change becomes a regular feature of organisational life as both goals and individual competencies are never static. It is the drive for alignment that creates the excitement that surrounds the issue of staff development – the more successful organisations being those that have mastered this process.
Figure 1.1 Alignment of effort
Development means different things to different people. We are defining it as an event or process which helps people to learn, however the event occurs. However, in a business context, development is any event which enables an individual or team to perform better. This becomes more obvious when we look at development in the following three broad categories:
Technical/functional development
This is job-specific and is normally associated with the specialist skills or knowledge required for the performance of the role. Examples are jobs in engineering, building, computing, accounting, medicine, selling, customer service, marketing, production and manufacturing. Therefore, an individual will expect to be kept up to date and developed across a range of technical topics and skills necessary for effective execution of their job. Continual professional development is often incorporated into this area.
Personal development
This builds the underpinning skills and knowledge that each individual should possess to enable them to perform any role well. Examples are skills in communications, presentation, assertiveness, influencing and teamworking. These are often referred to as ‘soft’ skills and they are particular to the individual rather than to the job.
Management development
This relates to the need to manage people effectively so that the team or department meets its performance targets. The components of management development vary between organisations, but may typically include team building, performance management, objective setting and agreement, developing staff, appraisals, motivating staff, leadership, managing information, health and safety, quality, budgets, decision making, problem solving, managing risks and managing change.
Linking development to work
Organisations that deliberately create opportunities for people to learn and acquire new skills want a return on their investment. They need people to apply their newly acquired learning and skills for organisational benefit. If this does not occur, then the organisation is wasting both resources and time. Organisations invest in developing people for the following reasons:
to help people perform better in their job
to help prepare people for other employment within the organisation
to retain key people within the organisation
to build up a capability that is needed for planned changes in organisational direction.
Striking the balance between creating the type of organisation immortalised in the Charlie Chaplin film, Modern Times, in which people were expected to behave like machines, and one where the workplace is seen as an opportunity for total self-indulgence is the task faced by the chief executive. Managers are also charged with helping to maintain that balance once it has been struck. Look at the following case study:
The ABC organisation is heavily committed to staff development. Each year the training and development department issues its training catalogue of courses which all staff members can attend. These courses cover a wide variety of personal, technical and management development. The costs of all courses are borne by the training and development department central budget. Provided individuals have the agreement of their manager or team leader, they can attend courses. Nominations are taken in the order in which they are received. As the department normally uses its budget by the end of Quarter three, people tend to book and attend early to ensure they get onto the courses.
Symptoms in the ABC organisation which indicate that the balance has not been struck correctly are that:
there are no direct links between the training and development activities, the organisational strategy, business plans, team objectives and individual needs
there are no performance management and development planning processes within the organisation
development activities and provision are not tailored to the individual businesses
individuals see development as primarily for their personal benefit, rather than organisational needs
departments are reluctant to give staff time for development
the training department is driving development rather than working in conjunction with the business heads and line managers to ensure that their needs are being met.
Performance management and development
Performance management is about managing employee performance to achieve organisational objectives. A key aspect of this is probably the performance review or appraisal, but in many organisations with performance management systems, performance and development are inextricably linked. Figure 1.2 shows the four stages of a typical performance management system.
Figure 1.2 Stages in a typical performance management system
Source: Torrington and Hall (1998)
The typical process in Figure 1.2 shows that objective setting is cascaded from strategy formulation, down through the business to the individual level. These objectives support the identification of gaps in knowledge and skills and a development plan is agreed to enable individuals to meet these needs. There is ongoing assessment of progress, but this culminates in an annual performance appraisal or review. Note that in this model the appraisal is linked to pay assessment. However, this is not always the case as it can undermine some of the core benefits of the appraisal process. The most crucial aspect of this model is its close association with the development process.
Communication channels
Open and frequently used channels of communication are essential if organisations are going to succeed in aligning their performance management activities with business goals. Information must flow up, down and across the organisation so that the organisation's strategies are in tune with the organisation's on-the-ground activities. For example, information about business goals and priorities must cascade down throughout the organisation so that they can be accurately translated and converted to appropriate objectives and targets at every part and level of the business. Information about resource requirements, development needs, targets, customer requirements and employee attitudes must flow up so that senior management can keep in touch with business operations. Formal communication channels may be designed to give and collect information, and include team briefings, procedures and policy documents, newsletters, employee attitude surveys and regular reporting procedures.
Regular communication in the performance management system may include the following:
Senior management communicates overall changes in organisational performance and changes in strategies and goals
Agreement between managers and senior management on goals and targets at different parts and levels of the business and then on resource requirements
Managers agree goals and targets with teams and individuals
Managers and individual members of staff agree individual development – recorded on individual development plans
Managers consolidate individual development plans into team/department or unit development plans and senior managers evaluate the organisation's consolidated development plan to agree priority areas which will best support organisational strategies
Managers and individuals review individual progress and performance in annual appraisals which are consolidated and communicated to human resources and senior management
Managers report to staff, human resources and senior management on changes in behaviour and skills resulting from development and the impact this has on performance
Senior management reviews and communicates changes in organisational performance – some of which may be attributed to development events – and establishes new goals.
How do you contribute to
organisational strategy?
Objective
In an effective organisation, there should be an alignment of goals and objectives. This activity will help to show how your efforts contribute to the overall organisational strategy.
Figure 1.3 Alignment ofeffort
Task
1 Think about your goals and how they relate to what higher and lower levels in your organisation are seeking to achieve. Summarise your goals in the relevant row in the chart and then write in the goals for teams and units above and below you, including the organisation's strategic goals.
You may need to do some research to fill in any gaps in your knowledge and to make sure you really know what is going on around you.
Organisational level |
Summary of goals |
Strategic |
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Business unit |
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Individual/team leader |
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Team |
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Individual/team member |
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2 Now identify specific objectives for yourself, your manager and your team. Are there clear links in the objectives at each level? Are your objectives aligned and contributing to the same ends?
My objectives are: |
My manager's objectives are: |
My team's objectives are: |
Feedback
The alignment of goals and objectives ensures that everyone is pulling in the same direction to achieve the company strategy, and that the efforts of the organisation and its people are not wasted.
If you have difficulties seeing how goals and objectives at different levels of the organisation are aligned, you could discuss this with your manager, or compare your findings with your colleagues.
If people can see a clear connection between what they are doing in their work and what their organisation is seeking to achieve, they can see how their contribution helps the organisation and appreciate its importance. This can help in developing commitment. Do the members of your team know how their objectives link to both your objectives and those of your manager? How can you explain how they contribute to the organisation?
The development process
Here we explore the development process and your role as a manager within this process.
The development cycle
Theorists have described development as being part of a continuous cycle rather than a series of discrete events or activities – see Figure 1.4. In this cycle there are close links between the individual and organisational development processes. Here we assume that as the organisation changes and grows then individual capabilities must also grow. For both the individual and the organisation, the stages of needs identification, planning to satisfy the need, taking action and finally evaluating the need are followed.
Figure 1.4 The development cycle
Identify
The process of identifying development needs is usually a combination of bottom-up and top-down processes. Managers at all levels must first clearly understand the organisational context for development before any other steps are taken. This means that you need to answer the following questions:
What are the organisation's strategies for the future and what are they expected to achieve within the next one to three years? It is important, especially at middle and senior manager levels, that a longer-term view is taken.
What are the goals that have to be achieved?
How are they to be achieved? Are there any special factors that need to be taken into consideration?
Are the goals new or challenging?
Having identified and understood the context for development, you need to discuss this with members of your team. Some organisations adopt a two-stage approach to these discussions:
Stage 1: Individuals undertake their own gap analysis – to identify where they need to develop skills in order to meet their goals – and suggest development remedies, before passing the draft plan to their manager
Stage 2: The manager reviews each plan with individuals, confirming or discussing the gap analysis, priority areas for development, options for undertaking the development, together with the timescales involved.
It is acceptable for these discussions to take place within performance reviews.
Plan
Having agreed individual needs, these are consolidated into the team, department, business and organisational development plans. This process should establish the links between individual and organisational development plans.
Planning determines how it is all going to happen. Managers have to ensure that work is being done and performance targets are being met, while enabling individuals to undertake development. Common planning areas at all levels of an organisation may include:
the development that is going to happen, and clear links to business needs
the priority
who will receive development in specific areas
when it is going to happen
how it will happen
booking people onto courses and programmes, job swaps, secondments, etc.
booking venues, trainers and facilitators
ensuring the budgets are in place
ongoing measurement and evaluation of effectiveness of development.
Types of development activity
These can be divided into off-job and on-job activities.
Examples of off-job development activities – these take learners away from their work:
training courses/programmes
off-site residential programmes and day programmes
computer-based training at a learning suite
networking/formal learning groups
reading a book.
Examples of on-job development activities – these are integrated into learners’ work:
job swap
secondments
projects
job shadowing
coaching
delegation
on-job mentoring.
Implement
Implementation is the plan in action and involves managers, training and development staff and those who are undergoing development.
It is good practice to agree the planned activities and outcomes with staff involved in any development activity. This means covering aspects such as:
the business reason why the organisation is investing in the development activity
what the individual is expected to contribute to the activity
the outputs that are expected and how they will be evaluated
how the development will be applied to work.
Review
Reviewing or evaluating the effectiveness of learning and development can be done at an individual level, as well as at the organisational level.
Many large organisations typically spend about one per cent of turnover on development activities. This investment has to be justified. Organisations are increasingly concerned about measuring the value derived from staff development. This may involve identifying all areas of development expenditure, including lost opportunity costs of people being away from the workplace, and measuring these costs against the benefits that accrue to the organisation when people apply their new learning or skills on return to work.
Reviewing the outcomes of development activities thus becomes an essential activity in the challenge of developing people for high performance.
The manager's role in development
As long ago as 1974, Peter Drucker identified the five basic operations of the manager:
setting objectives
organising
motivating and encouraging
measuring
developing people, including oneself.
Source: Drucker (1974)
Developing people is a key role for managers. Development takes place in an organisational context and involves learning. As a developer, the first question to resolve is how does individual development and learning relate to the needs of the organisation itself? We can see that individuals are able to learn but the idea that organisations can also learn may require a leap of the imagination, but there are similarities. The question we ask of individuals is what they have to learn to do well. The same question can also apply to an organisation. The organisation needs to be able to:
interface with the outside world in such a way that the stakeholders and customers achieve satisfaction
be efficient and effective in conducting its internal affairs, in particuIar by having a structure that supports the key processes and delivers outputs to meet performance requirements
create an environment in which people can be effective in pursuing the purpose of the enterprise.
It is not unreasonable to assume that managers at all levels are concerned with helping the enterprise learn how to achieve these three capabilities. The next level of learning is that pursued within the enterprise and involves team learning. The question here is: ‘What does the group need to learn to do well?’ There are four key requirements:
to manage the interface with other internal groups
to satisfy customers and stakeholders
to turn hidden and personal knowledge into knowledge that can be shared
to work together effectively as a team.
The final level of learning is the individual level. There are three basic areas of individual learning:
mastering the local environment
contributing to the team
pursuing personal development and growth.
The drivers for learning at these three levels – organisational, team and individual – stem from the requirements and demands of the enterprise. They will include directives from corporate staff, from senior management and from individuals’ perceptions of what is required of them. The largest tangible drivers of learning will, of course, stem from the work itself.
As a manager you are at the hub of your organisation – with a close understanding of the needs of your staff together with a strategic understanding of the needs of your business. This gives you a central role as a developer in your organisation. Figure 1.5 shows the manager operating at the hub of a network of opportunities.
Figure 1.5 The manager at the hub of a development network
It is vital that you take advantage of all of the opportunities to engage in a dialogue with these parties to ensure your own and your staff's development needs are aligned with organisational strategy and business plans. This will enable you to determine business, team and individual needs and their priorities. It is especially important that you talk regularly with your suppliers and customers, internal and external (if appropriate), to continue to determine what development is required to meet their needs.
The manager as a developer
So, as a manager or team leader, you have a key role in the development process. You also have a key role in developing your people and facilitating their ability to perform to standard.
The role of developer is highlighted in the following research studies:
Xerox undertook a major study in the mid 1980s to determine the effectiveness of development and found that 87% of whatever had been learned on training courses was lost within three months of the event.
Bruce Joyce's research in Columbia University suggested that in most training programmes only 13% of learning is transferred to the workplace.
Gers and Seward's longitudinal study found a sustained 92.5% to 97% transfer of learning from courses could be achieved by establishing clear objectives, introducing on-job coaching and by planning how to transfer learning to the workplace.
Source: Lambert (1996)
How often do people in your organisation go away on a training course, return enthused, but soon find that it's back to the same job? There is often no effort to bring the learning from training courses back to the workplace. The manager clearly has an important role here. In other words, structured, planned workplace coaching ensures effective development and the manager/team leader is at the heart of this – not the training department.
There are four key ways in which you can play an active role in developing staff:
by enabling people to attain high performance
by coaching
by mentoring
by delegating tasks and responsibility.
These roles can take place within your role as leader.
Examples of the developer role in action:
Aligning individuals’ development needs with those of the team or unit
Ensuring that organisational policies towards health and safety, quality, product and service development, introduction of information technology systems, and so on, are incorporated into the development plan of your unit
Discussing individual development needs
Coaching and mentoring staff to help them improve their performance
Supporting and facilitating the application of learning from off-job development activities to the workplace
Delegating tasks to staff
Reviewing the outcomes of a task
Evaluating and measuring performance of staff
Discussing the performance of the unit with internal and external customers
Discussing your own development needs with your manager.
The activities that follow help you to examine your reasons for investing in development and a framework for supporting your organisational approach to development.
Why invest in development?
Objectives
Use this activity to:
clarify why your organisation is investing in development
consider whether development is linked to the organisation's needs.
Task
1 List the main reasons why your organisation is investing in people development, for example because of new technology/products, etc.
Organisation's reasons for investing in development: |
2 Now consider why you undertake development. List reasons that are personal to you – whether they are concerned with work or other areas of your life.
Own reasons for developing yourself: |
Feedback
Organisations invest in development in order to improve business performance. Changes, like those in technologies, customer requirements and competitor activities, mean that organisations need to develop their people so that they have the knowledge, skills and understanding needed to meet future requirements.
Personal reasons for investing in your own development may include some of the following:
A personal desire to know more about a work-related topic, borne out of a real interest. For example, you may enjoy working on a computer, and might want to know more about how an application works.
Own interest – nothing to do with work – perhaps a hobby or sport.
A wish to become better at what you do, for example to become more useful to your team members.
A desire for greater reward, promotion or other form of advancement in your job.
A desire to keep up to date in your profession.
The more you invest in your own development, the greater the sense of personal satisfaction and the potential for reward. These rewards may come in many different forms.
Development in your organisation
Objective
Use this activity to identify your organisation's approach to development. By this we mean how far development is valued, whether it is seen as an investment or cost, and whether all development is linked to immediate or long-term business needs.
Task
1 Use the questions in the following chart to investigate how development is currently viewed in your organisation. You may need to talk to members of your training and development department if there is one, or with other managers to find the answers.
Approaches to development |
Notes |
Who has strategic responsibility for development in your organisation? |
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How is this responsibility delegated? (You may wish to draw an organisation chart to show this.) |
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Are there clear indications that development is linked to business needs at all levels of the organisation? |
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How does the development process for an individual work in practice? (Describe a typical arrangement from an individual's viewpoint.) |
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Is development competency-linked? |
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How is the development budget allocated? For example, is there a central budget (all costs held within the HR department budget), or a divisional or departmental budget? Or is there a mixture, with costs for core programmes held centrally, and costs for technical development held by divisions or departments? |
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What proportion of turnover is spent on development? |
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Is this investment communicated to managers and staff? |
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What are the most common (not necessarily popular) forms of development undertaken within your: |
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What are the most productive forms of development undertaken by your team members? |
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How is the effectiveness of development evaluated? |
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2 Your responses to the above questions will give you a clear picture of how your organisation approaches development. What is your assessment of the approach taken? Can you identify where changes or improvements can be made?
Assessment of your organisation's approach to development: |
Possible areas for improvement: |
Feedback
You may want to discuss your findings with colleagues. You could also discuss key issues with your training and development manager, who should have a strategic overview of development and be able to respond to your findings.
Think about the key areas in which you want to make improvement that will impact on your area. Refer back to the examples of the developer role in action. Could any of these strategies and tactics be used to help develop your staff?
Recap
This themes links the development process to organisational objectives.
Examine the links between employee development and the organisation's goals
Organisations need to recognise the need to create close alignment between the goals that are set at corporate level and those that are set at local level. These local goals should be the focus for effort.
Employee development means investing in the technical/functional skills, personal/knowledge skills and managerial skills required to meet the organisational objectives.
Identify your role as a manager in developing individuals
The development cycle is a useful framework to identify, plan, implement and evaluate development.
The manager's role is to contribute to the learning and development of the organisation, the team and the individual.
Explore the steps involved in the individual, team and organisational development process
It is vital that the manager takes advantage of all opportunities to engage in a dialogue with organisational stakeholders. This will ensure that individual, team and organisational development is aligned with organisational strategy and needs. Stakeholders include managers, customers, suppliers and other departments.
The key ways you can participate in developing staff are:
– by enabling people to attain high performance
– by coaching
– by mentoring
– by delegating tasks and responsibilities.
More @
Drucker, P. (1974) Management: Tasks, Responsibilities, Practices, Elsevier Butterworth-Heinemann
In this classic text, Peter Drucker studies how modern-day managers, whether in business or public service, can perform effectively. The essence of management is performance. It is the management and managers of our institutions – business and government, educational and multinational – that will determine our future.
Stredwick, J. (2000) An Introduction to Human Resource Management, Elsevier Butterworth-Heinemann
A comprehensive and wide-ranging text that examines all the major aspects of human resource management in a down-to-earth and practical way. Chapter 8 focuses on performance management and performance agreements.
Torrington, D. and Hall, L. (1998) 4th edition, Human Resource Management, Prentice Hall Europe
The book is written from a practical management perspective. It includes full coverage of operational issues and introduces the major academic debates of relevance to the field.
Tyson, S. and York, A. (2000) 4th edition, Essentials of HRM, Elsevier Butterworth-Heinemann
Essentials of HRM combines an overview of organisational behaviour with a detailed explanation of human resources management policies and techniques. It also acts as an introduction to the study of industrial relations. Part 3 examines job analysis, defining effective performance including competencies and Part 4 looks at assessing performance and managing careers.
Full references are provided at the end of the book.