Redefining Performance Management System at Aussie Healthy Foods

This report examines the strategic performance management system at Aussie Healthy Foods, focusing on the redesign of their performance management system and its impact on employee satisfaction. The report discusses the problems faced by the company, including employee dissatisfaction with frequent performance reviews. It explores relevant performance management theories such as goal setting theory, expectancy theory, and social cognitive theory, and how these theories can be applied to improve the system. The report also proposes two practical solutions: implementing the OKR (Objectives and Key Results) management methodology and utilizing 360-degree feedback. The analysis concludes with recommendations for creating a more effective and dynamic performance management system that aligns with the company's strategic objectives while addressing employee concerns. Desklib offers a wide range of similar solved assignments and past papers for students.

Running head: Managing strategic performance
Managing strategic performance
2018

Managing strategic performance
Table of Contents
Introduction.................................................................................................................................................3
Problems at Aussie healthy foods and relevant theories of managing strategic performance...................3
Two practical solutions to redefine performance management system........................................................5
Conclusion...................................................................................................................................................7
References...................................................................................................................................................7
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Managing strategic performance
Introduction
Performance management system is an effective and unique part of each and every company that
helps in analyzing and determining the performance and productivity of the employees. The
main motive of this task is to discuss about the performance management system of Aussie
healthy foods which is located in Melbourne, Australia. The company had decided to redesign
the performance management system in the competitive market. Although, this system will
provide ample of advantages to the company but it also dissatisfied the employees. The paper
discusses that how new performance management system will help in resolving and managing
the performance and outcomes of the workers. Some of the theories related to performance
management have been discussed in the task. At the end, two practical solutions for recreating
the performance management system also briefly have been elaborated in the task.
Problems at Aussie healthy foods and relevant theories of managing
strategic performance
Aussie healthy foods provides the latest in organic, health food and gluten free products to the
customers across the world. It offers prices at reasonable prices to the target audience in
Australia. In 2016, an effective and dynamic decision was taken to redesign the performance
management system of Aussie healthy foods. This is done to evaluate and analyze the
performance and productivity of the employees in a hassle free manner. In this new system,
performance review or feedback sessions were held in every month to gather insights from the
managers, employees and closest colleagues in all offices and plants across Australia. But most
of the employees were not satisfied with this new performance management system. It is noted
they felt under pressure and demotivate to frequently explain their performance and productivity
at the workplace. Thus, the employees said that they wanted to receive and give feedback and
opinions less frequently. Aussie health food created and implemented this new system to
evaluate and improve the performance and efficiency of the workers in the competitive market. It
will further help to maximize and boost profitability and returns of the firm internationally. No
company can survive and grow its business activities and operations without using performance
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Managing strategic performance
management system. The performance management may be defined as management’s systematic
application of process aimed at utilizing performance in an organization. There is close
relationship between performance management system and motivational theories. The
performance and effectiveness of the employees can be improved and enhanced by using
motivational theories (Agarwal 2011). The company uses ample of performance management
theories to detect and reduce ample of issues related to performance management. Some of the
performance management theories have been detailed below.
Goal setting theory: The goal setting theory refers to various goals being established for the
future time period for successive performance of the organization and individual as well. It is
noted that goal setting theory helps in improving and enhancing the performance and
productivity of the workers in the workplace. Goal setting would help in developing and
improving action plan designed to assist and guide the people and organizations as well. It
further helps in management literature and personal development. It is studied that there is a
favorable relationship between goal setting and organizational outcomes. This is just because
goal setting theory entails all attributes of developing organizations with effectiveness and
efficiency. This theory further helps in gaining competitive benefits in the international market
(Shaiza and Giri 2016). Thus, Aussie healthy food uses this theory to attain competitive benefits
over the competitors in the international market.
Expectancy theory: This is one of the significant and effective theories used by Aussie healthy
foods. This theory is propounded by Victor Vroom in 1964. Along with this, this theory is based
on the hypothesis that people adjust their actions and behavior in the company on the basis of
predicated satisfaction of valued and dynamic goals and objectives set by them. The people alter
their action and behavior in such a way which is mainly leads them to achieve these goals and
objectives. Expectancy theory explains the concept of performance management as it is believed
that performance of the workers is affected by the expectations and demands concerning future
events (Agarwal 2011). There are three variables of expectancy theory that includes valence,
instrumentality and expectancy. By using this theory, Aussie healthy foods can increase and
enhance rewards and incentives in the international market. By setting proper goals and
objectives, this theory may generate a motivational approach that improves and enhances
performance of the workers. Along with this, the company can attain desired goals and
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Managing strategic performance
objectives with the help of expectancy theory. It is significant and fundamental theory that helps
in motivating and promoting the workers towards the achievement of mission and vision in the
competitive market (Nuttin 2014).
Social cognitive theory: One of the significant theories that initiated by Aussie healthy food is
social cognitive theory. This theory is implemented in the organization to augment and enhance
the performance of the subordinates by motivating them effectively and efficiently. This theory
refers that learning occurs in a social context with an effective and dynamic interaction of the
behavior, person and environment. This theory empathizes that workers need to learn from the
social environment (Schunk and Usher 2012). The top management and managers need to set
long term objectives and goals and measure their goals and progress. In this way, Aussie healthy
foods are able to resolve and manage the issues related to change and performance. This
approach also helps in further satisfying the needs, desires and requirements of the employees
Apart from this, the employees who are not satisfied with new performance management system,
can easily adopt this theory to improve performance and stand out against the rivalries in the
international market (Schunk and Zimmerman 2012).
Two practical solutions to redefine performance management system
To check and analyze the employee performance, the typical practice is to hold a performance
review once a year. During these reviews, the workers measure and identify their own
performance and productivity (Ferreira and Otley 2009). They also get evaluations and
assessment in the form of numeric scores from their leaders and managers. A performance
review and evaluation is mainly a single yearly conversation. No wonder it is meaningless,
irrelevant and a waste of time. In today’s modern era, various performance management
solutions are designed for leaders and HR managers only (Albrech 2011). The two solutions for
Aussie healthy foods to provide support in redefining their performance management system are
discussed below.
OKR management methodology: Objectives and key results (OKR) is a management
methodology that was designed by John Doerr. The opinion of OKR is to interconnect the work
of workers to the company’s strategic objectives and goals. Objective is a significant and
ambitious goal that Aussie healthy foods want to achieve in the competitive market. Key results
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Managing strategic performance
refer to the computable tasks or milestones that explain how a given worker can help to achieve
the goals and objectives. It is essential to have a limited number of key results so workers do not
feel overload (Armstrong 2009). This approach helps in evaluating and identifying the
performance of the workers. Furthermore, it is also necessary to redefine the performance
management system in Aussie healthy foods for improving and enhancing the effectiveness and
efficiency of the workers (Hackernoon 2018).
360 degree feedback: It is one of the crucial ways to receive feedback and reviews from their
peers. Under this approach, the reviewers answer questions and can review historical opinion and
feedback about reviewees. The reviews can be collected in any form such as praises, check ins,
one on one conversation and other forms of feedback (Hackernoon 2018). In this way, Aussie
healthy foods can redefine the performance management system for improving and analyzing the
performance and efficiency. Such kind of approach is also used by Deloittee, Cargill and Google
company to boost and uplift the profitability and outcomes in the international market (Duggan
2015). Aside this, top management needs to explain the benefits and merits of new performance
management system to employees so that they can easily accept this system within the
organization (Thorpe and Holloway 2008).
Aussie healthy foods need to use unique and dynamic performance management system to make
happy the employees and to attain desired objectives. Effective and dynamic performance
management system would be helpful in measuring, identifying and developing the performance
of the workers and aligning effectiveness with the desired strategic objectives and goals of
Aussie healthy foods. The company needs to be considered five factors while designing the
effective and dynamic performance management system (Aguinis 2013). The five factors of
effective and unique performance management system have been discussed below.
 Establishing objectives
 Analyzing and identifying the performance
 Feedback and reviews of the performance results
 Reward system based on the unique performance results
 Amendments to activities, actions and objectives.
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Managing strategic performance
(Source: Agarwal 2011)
Conclusion
It concludes from the above mentioned discussion that Aussie healthy foods provides various
foods products such as breakfast, sandwich, meat and dairy products to the customers in
Australia. The above analysis shows that how the company redesigns performance management
system to compete with rivalries in the competitive market. However, this new system created
ample of losses like dissatisfaction and demotivation among the workers. They also felt under
pressure that may affect the progress and targets of the firm adversely. The above mentioned
analysis shows that how motivational theories help in detecting and eliminating various issues
related to performance management system. Two practical solutions for redesigning the
performance management system in Aussie healthy foods also have been explained in the task.
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Managing strategic performance
References
Agarwal.A.2011, Models and theories of performance management system [Online]. Available
from https://www.projectguru.in/publications/models-and-theories-of-performance-management-
system/ [Accessed as on 30th September 2018].
Aguinis, H., 2013, Performance management (Vol. 2). Boston, MA: Pearson.
Albrech, S.L., 2011, Handbook of employee engagement: Perspectives, issues, research and
practice. Human Resource Management International Digest, 19(7).
Armstrong, M., 2009, Armstrong's handbook of performance management: an evidence-based
guide to delivering high performance. Kogan Page Publishers.
Duggan.K.2015, Six companies that are redefining performance management [Online].
Available from https://www.fastcompany.com/3054547/six-companies-that-are-redefining-
performance-management [Accessed as on 30th September 2018].
Ferreira, A. and Otley, D., 2009, The design and use of performance management systems: An
extended framework for analysis. Management accounting research, 20(4), pp.263-282.
Hackernoon.2018, How can you build a performance management system for the new era of
employee engagement [Online]. Available from https://hackernoon.com/how-can-you-build-a-
performance-management-system-for-the-new-era-of-employee-engagement-d6a5bb070ad7
[Accessed as on 30th September 2018].
Nuttin, J., 2014, Future time perspective and motivation: Theory and research method.
Psychology Press.
Schunk, D.H. and Usher, E.L., 2012, Social cognitive theory. APA educational psychology
handbook, 1.
Schunk, D.H. and Zimmerman, B.J. eds., 2012, Motivation and self-regulated learning: Theory,
research, and applications. Routledge.
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Shaiza.P and Giri.I.2016, Goal setting theory of performance management system [Online].
Available from https://www.projectguru.in/publications/goal-setting-theory-performance-
management-system/ [Accessed as on 30th September 2018].
Thorpe, R. and Holloway, J. eds., 2008, Performance management: multidisciplinary
perspectives. Springer.
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