To build a staff motivation system and to improve management, it is necessary to understand how efficiently employees and managers work. This makes the concept of efficiency extremely relevant in management. Therefore, you need to know what performance is, what its criteria and assessment methods are.
Performance concept
The essence of this concept is the degree to which the goals are achieved. There are several basic approaches to answering the question of what is performance. In the first case, this concept refers precisely to the degree of achievement of the goals facing the organization. This approach is effective when goals can be measured in some specific indicators. In the second case, effectiveness is understood as the ability of an organization to extract from the external environment the necessary, often unique resources necessary for the functioning of the organization. In the third approach, the concepts of efficiency and effectiveness are almost equalized. In this case, they mean the ability to achieve good results in the activities of the enterprise at minimal cost and relying mainly on internal resources. In general, there is a tradition to breed these two concepts. Well-known management theorist Peter Drucker associates efficiency with the organization of the management process, and effectiveness with the satisfaction of the needs of consumers and customers. Both of these phenomena are important and require attention from the leader.
Management Efficiency
In managing an organization, the most important parameter for evaluating is precisely the achievement of goals. Therefore, management effectiveness is the main characteristic of success. Answering the question of what is productivity in personnel and organization management, it is worth noting that these concepts in management theory are very close, and sometimes synonymous. Researchers establish a direct link between efficiency, success and effectiveness. These are all links in a single chain. Effectiveness in management is the ability of the entire management system to achieve the desired results, in accordance with the strategic and tactical goals. These goals can be associated with the release of products to meet the needs of customers, with the quality of services provided, as well as with the processes of organizing production, with all stages of personnel management and meeting the needs of employees.
Criteria for the effectiveness of managerial work
Any work requires evaluation so that it can be paid fairly, but it is not always possible to establish clear indicators for evaluation. To determine what performance is, it is necessary to formulate indicators by which it can be evaluated. First of all, this is a set of criteria related to the level of achievement of the company's goals. The second group of indicators is associated with the completeness and quality of meeting the needs of customers and customers, as well as employees of the company and its partners. Also, performance can be evaluated in terms of search and finding opportunities for business expansion, for its growth. In addition, performance criteria for various functional areas of the company’s activity can serve as criteria for overall effectiveness. Assessing the effectiveness of managers, it is necessary to correlate their achievements and successes with the company's strategy, as well as to identify their personal contribution to the development of the enterprise.
Staff performance indicators
In order to determine the personal effectiveness of employees of different functionalities, the concept of "key performance indicators", or KPI, is used. This is an individual assessment system for each employee, which is developed by the enterprise, taking into account its own priorities and business direction. The assessment usually uses quantitative and qualitative indicators, so KPI systems cannot be used for absolutely all types of activities. There are several approaches for evaluating performance:
- the ratio of the results obtained with the costs incurred;
- assessment of compliance of tasks with established norms and standards;
- assessment of employee productivity.
The difficulty in applying common valuation standards is that many operations are difficult to imagine in the form of quantitative estimates. However, the costs of developing such a system are largely justified, since such an assessment significantly increases the motivation of staff to increase labor productivity, improves the control system for the implementation of production tasks, and also increases the involvement of staff in solving the general strategic tasks of the company.
Performance Management Evaluation
Most often, the KPI system is not applicable to evaluate the work of managers. Since the manager has to solve many problems that cannot be unambiguously translated into quantitative or qualitative units. Therefore, to evaluate the work of the leader, special performance criteria are used. These include the quality of fulfilling managerial tasks, including the fulfillment by the entrusted unit of indicators for the production of products, compliance with the deadlines for solving tasks, and for saving and attracting resources. The criteria for evaluating the effectiveness of a manager are usually:
- costs of managerial work and their correlation with the goals achieved;
- global results, i.e. the impact of the manager’s work on the overall development strategy of the company;
- efficiency, how timely the manager solves problems;
- streamlining and streamlined production process.
Significance of performance assessment in management
One of the most important functions of management is to monitor the implementation of tasks and goals. Therefore, performance evaluation is a necessary part of the manager's work. The manager needs to develop a staff motivation system, and for this a quality system for evaluating their work is needed. When employees understand why they are rewarded and rewarded, they usually start to work better. Therefore, any manager should devote enough time and effort to develop a system for assessing employee performance.