Competency Based Performance Management System: An Initiative Towards A High Performing Ofganization.

represented in the sample in order to increase the efficiency (that is to decrease the error in the estimation). In stratified sampling the population of $N$ units is first divided into disjoint groups of N1, N2,...,Nh,..NL, units, respectively. These subgroups, called strata, together they compromise the whole population, so that N1+N2+...NL=N. From each stratum a sample, of pre-specified size, is drawn independently in different strata. Then the collection of these samples constitutes a stratified sample. If a simple random sample selection scheme is used in each stratum, then the corresponding sample is called a stratified random sample. Determination of sample size is an important element of an empirical research and the objective is to make inferences about a population from a selected sample. The statistical power of a study is defined by the number of samples for the conduction. The formula taken (Charan and Biswas, 2013), for calculation of necessary sample size is: N = (Z-score)2 * Std. Dev.*(1-Std.Dev.) / (margin of error)2 In this study, 95 percent confidence level is taken for which the Z value is 1.96 according to the standard normal distribution table. We have assumed the standard deviation to be .5, and the margin of error of +/- 5%. Therefore, to calculate N, we have assumed (Z-score = 1.96, StdDev = .5 and the margin of error = +/- .5. N = {(1.96)² x .5(.5)} / (.05)² = (3.8416 x .25) / .0025 = .9604 / .0025 = 384.16. Therefore, a minimum sample size of 385 would enable the estimation of the influence of executive competencies on performance on a 5 point scale, with 95 percent confidence level, and error level maintained within +/- 0.5 of the actual value. However, increasing the sample size could reduce the sampling error. 1.5.1.4 Data Sources To ensure adequate representation of data in this thesis, both primary and secondary sources were taken into consideration. The primary data are the first hand information that is collected directly from the research unit. In order to collect primary data from the selected research units, a structured questionnaire has been distributed among the respondents. The secondary data are the second hand information which is gathered from the existing records and published data sources. Secondary data from the selected research units was collected through the methods of case studies, annual reports, performance appraisals, periodicals, journals, yearbooks and other departmental 29

documents from which the prevailing trends and practices on ‘performance management system’ has been visualized. 1.5.1.5 Questionnaire Design The aim of conducting opinion surveys through a structured questionnaire is to examine the hypothesized model developed in this work. A systematic effort is made to catch the essential parts of ‘competency based performance management system’ and its significant impact on organizational performance. The questionnaire was systematically prepared based on the extensive literature reviews and personal interviews with the respondents of this study. The questionnaire consists of 71 items and five point Likert scale (1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree) was used to rate the responses of the participants. In order to test the reliability and validity of the questionnaire, a pilot study was conducted initially. According to Baker (1994), the purpose of the pilot study is to test the questionnaire and to ensure that the data collected are coherent and comprehensible which can be carried out subsequently. The pre-testing was very useful, as it focused on the difficulties faced by the respondents during the period of the survey. The difficulty that the respondents faced during the pre-testing was rectified accordingly. The feedbacks during the pre- testing process were also taken into consideration at the time of the actual data collection process. The questionnaire which was administered among the respondents has four sections. The first section will reflect the demographic profile of the respondent’s identification particulars which would include age, sex, marital status, experience, grade and level of education. The second section indicates about the “factors influencing performance management system” (workplace environment, employee competency, performance standards and expectations, performance appraisal, employee training and post appraisal measures). The third section reflects on “facilitators of performance management system” (mission-vision-goal-objectives, organizational culture, organizational development and recognition & rewards). The last section has questions relating to the “impact of performance management system on organizational performance” (profit margin, customer satisfaction, low wastage). 30

1.5.2 Data Analysis Tools To validate and quantify the data collected, some multivariate techniques have been taken into consideration. The statistical package SPSS Version 20 was used to analyze the hypothesized issues with the help of descriptive statistics, reliability, multiple regressions. The following is a brief discussion with respect to those tools and techniques utilized for this purpose and is subdivided into three sub- sections. 1.5.2.1 Descriptive statistics Descriptive statistics are used simply to describe the basic features of the data that one is concerned with. It is beneficial for describing data, summarizing data and for data cleaning. According to Dodge (2003), “descriptive statistics aims to summarize a data set quantitatively without employing a probabilistic formulation, rather than taking inferences regarding the population as a whole”. It is essential to monitor the ‘N’ (number of valid cases) for each variable as variations in ‘N’ is considered a problem, that may arise when the variables are examined together during data analysis. In descriptive statistics three major characteristics of a single variable are examined such as: the distribution, the central tendency, and the dispersion. The distribution refers to the summary of frequency of individual values or ranges of values for a variable. The frequency distribution is basically used to describe a single variable in a study. All the data values for a particular variable are grouped together to form categories so as to identify the frequencies of the data appropriately. The central tendency of a distribution is an estimate of the “center” of a distribution of data’s collected. The central tendency of a distribution consists of three major estimates such as; mean median and mode. The mean or average of the distribution is one of the common methods used in central tendency. The values collected are added up and divide by the number of values to commute the mean of the central tendency. The median of the central tendency is the score that is found in the exact middle of the set of values collected. To compute the median of the central tendency, all the values are listed in a numerical order and then the value in the center of the sample is located and is taken as the median value. The mode of the central tendency is the most frequently occurring value in the set of samples listed. These measures of central tendency help in simplifying the values collected from the samples. The dispersion refers to the spread of the values around the central tendency. There are two common measures of dispersion used for 31

analysis that is the range and the standard deviation. The range is simply the highest value minus the lowest value. The most accurate and detailed form of dispersion is the standard deviation, as it shows the relation that the set of values have with that of the mean of the sample. To compute the standard deviation, we first find the distance between each value and the mean. The “squares of the value” are taken and are summed up to get the sum of squares (SS) value. Next, we divide this sum by the number of scores minus 1, which is known as the variance. To commute the standard deviation, we take the square root of the variance. In this study the descriptive statistics are used to summarize and simplify the data collected through the questionnaire survey. 1.5.2.2 Analysis of Variance Analysis of variance (ANOVA) is a collection of statistical models used to analyze the differences between group means and their variations among and between groups which was developed by R. A. Fisher in early 1920’s. In its simplest form, ANOVA is equivalent to the t-test in which only two variables are involved, whereas in ANOVA more than two exploratory variables are involved. The exploratory variables in ANOVA are categorical in nature; hence they are referred to as factors (Hinkelmann and Kempthorne, 2008). The fundamental technique of ANOVA is to partition the total sum of squares (SS) into components related to the effects involved in the model. There are various methods of applying ANOVA but is typically dependent on the number of factors and the number of dependent variables involved. The one-way ANOVA is the simplest form of application, as only one single factor is involved. It is commonly used to test the differences between independent variables and its effects that can be estimated for the population as a whole. Primarily, one-way ANOVA is used to test the differences among at least three groups of observations, as two groups of observation can be easily tested through a t - test or F-test (as F = t2). When there is a case of two or more factors, then two-way ANOVA and three-way ANOVA is a significant method of measurement. ANOVA is a useful procedure to test for significant differences between means. However, three assumptions have to be achieved to conduct this test. First is the assumption of independence, which states that observations are random and independent samples from the population. Second is the assumption of normality, which states that distributions of the population from which the samples are selected are normal. Third is the assumption of homogeneity of variance, which states that, the variances of the distribution in a population are equal. 32

1.5.2.3 Multiple Regression Analysis Regression analysis is a statistical procedure for estimating the relationships among predictor and predicted variables. The primary purpose of this technique is focused on the relationship between a dependent variable and one or more independent variables. It is a way of predicting an outcome variable from one independent variable or several independent variables (Field, 2009). When one independent variable is involved, it is known as simple regression, whereas in the case of more than one independent variable it is known as multiple regressions. Multiple regressions are a statistical technique used to analyze the relationship between a single dependent variable and several independent variables, wherein each independent variable is weighted by the regression analysis procedure to ensure maximal prediction from the set of independent variable (Hair et al., 2009). According to Hair et al., (2009), multiple regressions fulfil two objectives of the research. Firstly, to maximize the overall predictive power of the independent variables as represented in the variate and secondly, to compare two or more sets of independent variables to ascertain the predictive power of each variate. The size of the sample has a direct impact on the appropriateness and the statistical power of the multiple regression analysis, therefore the researcher must ensure that the criterion of practical significance is met along with statistical significance. This chapter outlines the various research methods that have been implemented for the purpose of the research work carried out in a more systematic and meaningful way. Both primary and secondary data had been collected from the selected manufacturing unit. The selection of samples for this study was based on stratified random sampling method and an attempt was made for reciprocal representation of respondents from employees, of the selected steel manufacturing unit. The succeeding chapters would examine the research methodologies and the rationale for selection of research techniques in detail for data analysis. 33

1.6 Structure of the Thesis The thesis is organized into seven chapters. The detailed plan and contents of the proposed study will deal with the following chapters such as: Chapter 1: Introduction Chapter 2: This chapter is an introductory one which concentrates on research Chapter 3: background, significance, objectives, scope, methodology and limitations of the study. Chapter 4: Literature Review and Hypotheses Chapter 5: This chapter also illustrates the hypotheses formulated based on the Chapter 6: existing literature and a hypothesized model derived based on research Chapter 7: setting. Organizational Profile This chapter gives a brief description on Rourkela Steel Plant, a Unit of Steel Authority of India Limited in terms of manpower, human resource policies, financial aspects, quality policy, expansion plans, awards and recognitions. This organization has been taken as a case for the purpose of this empirical study. Performance Management System in Global and National Sphere This chapter highlights on employee performance in Global as well as Indian perspective and other theoretical aspects. Performance Management System of Rourkela Steel Plant This chapter deals with the performance management system of Rourkela Steel Plant. Data Analysis and Findings This chapter has given a clear picture on performance management measures of RSP and the findings of the study based on analysis of primary data. Conclusion This chapter concludes by reflecting summary, suggestions and conclusions relating to the research work. 34

1.7 Limitations of the Study There is any study in the world is without its limitations. Hence, certain limitations for the researcher to complete this study were:  As a case study approach in the public sector, the generalizability of the results may not be applicable in private sector organizations.  The size of the sample was also a limiting factor.  It was very difficult to cover all the departments of RSP.  Scarcity of time before the researcher was a major limitation of this study.  Difficulties were faced by the researcher to meet the respondents due to their busy schedule.  As some of the respondents faced difficulties in understanding the questionnaire (due to their low educational background), more time was spent on clarification of the questions for their understanding.  Some of the respondents (executives and non-executives) shown their unwillingness to spend their time in filling the questionnaire.  Collection of data from the respondents could not always be feasible during the working hours; hence, they have consulted at their residential quarters, which was another difficult situation faced by the researcher. In spite of these limitations, the study was undertaken with too much care and due effort was given for completion of this study. 35

CHAPTER - II LITERATURE REVIEW AND HYPOTHESES

CHAPTER - II LITERATURE REVIEW AND HYPOTHESES 2.1 Introduction 2.1.1 Competency based Performance Management System A competency-based performance management system is a formalized way of establishing the skills and behaviours that employees need to be successful in their present roles and for future growth in their organizations. It provides the framework for aligning employees’ job performance with the organization’s goals. Essentially, goals – both for individual employees and the organization – become the key to individual and organizational success. Competency management system allows employers to evaluate employees' performance. Use of this system allows managers and supervisors to identify gaps, deploy remedial training, recruit staff and compensate current employees appropriately. Developing competency-based performance management systems typically involve creating comprehensive competency models for all jobs and assessing employees against those models during annual performance reviews. Employers may use this system for all staff or restrict its use for only salaried employees. By identifying core competencies that align with the company’s mission, vision and goals, management can consistently and fairly rate employees who contribute to the bottom line. Successful organizations also encourage employees to establish personalized objectives that allow them to develop their abilities while supporting company goals. Lekshmi and Radhika (2016) revealed in their study on “Competency Management as a strategy for performance appraisal” that competency is widely used in organizations nowadays to improve performance excellence. Competency management is giving better result in performance evaluation of employees as well as effective and efficient organizational performances. It has become an inevitable process in the organization in the present business environment. The importance of competency based performance is very much critical in the organization in many scenarios. 36

Kalyani (2016) has mentioned in his Research Paper on “Competency Mapping Process in Current Scenario: A Need for Sustainable Growth” that competency management is a comprehensive performance management strategy, which identifies and builds the most relevant competencies to facilitate employee and organizational performance. Competencies focus on the characteristics of people who are successful or unsuccessful performing the work. Competencies are part of people, not the work they do. Moreover, Competencies do better in pinpointing the unique characteristics of people that lead to success. Szabó (2016) emphasized that human resource management (HRM) has most important roles in Public Service Organizations and its purposeful and conscious management is an important factor for organizational success. One of the most important roles of organizational functioning in strategic based integrated HRM is to provide professional and high quality human resource. Nowadays, the slogan “right person in the right place” is being appreciated and gets extra content, since the term of “managing” is being replaced with “caring” in human resource management. Berwick-Upon-tweed Town Council, United Kingdom (2016) has established a culture of performance management via competency based performance development appraisal reviews, training and development processes, regular one-to-one supervision and effective team meetings. This helps employees to review their performance and focus their development in order to achieve high levels of organizational performance. Kumar and Mishra (2016) highlighted on high performing people are critical for organizations to provide world class customers’ service and meet tough challenges due to rapid technological changes and intense competition. Mufti et al. (2016) advocated as the organizations around the globe heavily depend on the knowledge, skills, abilities and other characteristics (KSAOs) of their employees for achieving their objectives. Competency is defined as a unique personal capability, which creates high value in organization. In recent years, different organizaions have attempted to develop their managers effectively by designing competency pattern. Accordingly, various environmental and intra-organizational patterns are considered to identify right competencies and to take right decision in HR Management, based on such competencies (Ghasemi, 2016). The study aims at indicating that growth in competencies is necessary 37

to befome an efficient manager and managers need plans and training on learning methods. In fact, a guideline is provided to create and execute competency mode from the beginning to end. Performance management is a goal-oriented system, which ensures that organizational processes exist to maximize the productivity of employees, teams and, ultimately, the organization. In competitive markets like the pharmaceutical industry, a high performance sales force is a strategic weapon. The successful execution of strategies for growth, new product launches, new areas/markets and collaboration depends on attracting and retaining the right sales force talent, and then rapidly developing the skills and knowledge needed to operate in this highly competitive world (Pujar and Patil, 2015). The very success of an organization depends not only on how the organization makes the most of human competences, but also it stimulates commitment to an organization. Competency framework is used by the organizations today in different HR practices like recruitment and selection, training and development, performance management, career development, compensation and pay, etc. to improve the performance of the organization as well as of employees (Tripathi and Agrawal, 2014). The importance of competency based performance is very much critical in the organization in many scenarios.  Competency based performance management helps in developing reward system that is performance centered.  It will help to build on career plans and succession plans. The potential appraisal can be done on the basis of competencies exhibited by employees in their present job.  It creates a climate in the organization which may adapt its employees to a visible management system.  Competency management assesses the knowledge, skill and attitude which are to be possessed by a leader. Competency based performance assist the organizations to achieve their vision, mission, objectives and goals. It also paves the career path of the employees. It creates a system which may focus on developing human capital of the organization. Competency based performance management system has following advantages: 38

 It will help the organization to identify the organizational objectives and communicate that to the employees to channelize their effort to achieve these.  It helps in identifying and assessing the human capital in the organization along with the planning and development of professional growth of the employees.  It will help the organization to assess the managerial objectivity and its accuracy in attaining the objectives.  It will provide a consistency and it creates a continuation and completeness in the process.  It helps in increasing the productivity by increasing the efficiency reducing the mistakes since right person is in right job.  It will identify the required knowledge, skill and attitude set in the employees may create a strategic edge for the organization.  It will help the organization to adapt to any change because of its resourceful human capital. The employees in the organization with their talent will be able to adapt to the changing micro and macro situation.  It will develop a strong base in the organization for effective human resource management in the organization.  It will provide a good growth and learning opportunity for its employees as there will be a right blend of competencies in the employees which can be easily channelized for achieving the best result. Defining the skills and behavior required to complete a task successfully requires time, effort and coordination between multiple sources. Getting agreement on the relevancy of a particular competency, such as business acumen, communication or team management may require numerous meetings and discussions to get consensus among multiple company executives. Formally linking employee development to performance management system ensures that knowledge transfer, succession planning and employee training needs get met as part of daily operations rather than remedial actions taken only when problems occur. Implementing a competency-based performance management system typically begins by analyzing the business environment and listing the job roles needed to achieve 39

strategic goals. By identifying the skills and behavior required to perform these jobs, effective HR professionals develop competency models. Competency models help to identify the factors of interpersonal skills required by employees to build effective teams. A competency is an integration of knowledge, skills, abilities, behaviors, attitudes, and personal characteristics that allow an individual to perform successfully on the job. Similarly, a competency has some components which are visible like knowledge and skills but other behavioural components like attitude, traits, thinking styles, self-image, organizational fit etc. are hidden or beneath the surface. A continuum of proficiency (mastery) exists for every competency. Figure 2.1: Job Competency Modeling MISSION & JOB SELECTION VISION DESCRIPTION TOOLS GOAL SETTING RECRUITMENT ORGANIZTION COMPETENCY ORIENTATION CULTURE TRAINING EMPLOYEE PROFESSIONAL PROMOTION DEVELOPMENT SUCCESSION CAREER PERFORMANCE PLANNING PLANNING EVALUATION Source: Understanding Job Competency Modeling [Personnel Commission, Bassett Unified School District, CA)] Link : http://www.bassettpc.com/employee -resources/job -competencies In order to determine the required level of competency, proficiency required for any given job and for successful job performance competencies required.  Classification: This model comprises of Mission, Vision and Job Description. Job descriptions are a basic tool in communicating to organizational members the specific duties, responsibilities, and competencies that are required for successful performance on the job both at job-entry and at full-performance level.  Recruitment: This model contains Selection Tools & Recruitment. Using competencies in recruitment can be as simple as including a list and a brief description of the required competencies in the job posting, providing important information to the candidates both in terms of what the 40

organization expects of its employees and for candidates to self-select for jobs that match their set of competencies based on self-assessment.  Selection & Testing: This Model covers Orientation Training. It is important to ensure that those selected for a job meet not just the minimum technical requirements, but also have the essential \"soft skills\" (e.g. relationship building, teamwork, communication, etc...) that are vital to sustain successful performance on the job overtime. Creating a competency-based interview question bank and developing competency-based validated selection measures will enable an organization to better predict the success of job candidates on the job.  Training & Development: This model includes Professional Development and Performance Evaluation. A conceptualization of a competency is that it is observable, measurable, and can be learned to achieve desired performance levels. Hence, an assessment and evaluation of competency proficiency levels either during a selection interview or as part of performance management process can be used to identify appropriate developmental training opportunities necessary to achieve desired competency proficiency levels.  Career & Workforce Planning: This model comprises of Career Planning, Succession Planning, Employee Promotion, Organization Culture and Goal Setting. Job Competency Profiles are also critical in the workforce planning initiatives for those organizations that anticipate future vacancies and can subsequently strategically identify and train individuals that can successfully fill the vacancies without a noticeable disturbance in the organization's functioning. Also, on the individual level, such profiles can be used to develop career paths by making known the competency requirements and expectations for different positions in the organizational hierarchy. 2.2 Performance Management System (PMS) An integrated PMS sounds like a natural thing for any organization interested in ensuring success and growth. However, as many HR professionals know, the path from realization of the need to actual implementation is often rocky and can result in ‘pain’ if not developed and launched appropriately. This is particularly true when there are already existing performance management tools that are not linked. A competency based 41

performance management system ensures that the right behaviors have been identified that will drive the best performance, and that those behaviors can be measured effectively followed by the right compensation/reward methods. The success of any performance management system depends upon the stability of its foundation. The most successful systems are built on the belief that there are specific competencies (behaviors that drive success in a given organization, help employees to understand what is expected of them, and provide employees with a road map for success) that represent the observable behaviors necessary to be a successful leader in a particular organization. Performance management (PM) is one of the key human resource interventions which contribute to the effective management of individuals and teams in order to achieve high levels of organizational performance. In other words, performance management should be: strategic - it is about broader issues and longer-term goals; integrated - it should link various aspects of the business, people management, and individuals and teams. Once the foundation is secure, through the development of a customized competency model, all of the HR and performance management tools/processes can be aligned. This step includes ensuring that processes such as hiring, assessment, goal setting, 360 degree feedback, development, appraisal, and compensation plans are in support of driving the development of employee competencies. Brahe (2016) revealed in his research on “Performance Management - Deliver results and build a stronger company” that performance management transcends the organizational hierarchy and has the ability to create the organizational \"buzz\" that keeps everyone focused on the things that matter the most. It has also been revealed in his studies that successful performance management can only start from the top of the organization. Top-level leadership must make the choice to make performance management a priority in everyday leadership throughout the organization. They must define the scope of Performance Management and the relative importance of ‘the what’ and ‘the how’. Lelissa and Lelissa (2016) explored the current performance management system of banks in Ethiopia using a modified conceptual framework that links phases of performance management system with employee effectiveness. The research finds that banks in Ethiopia have in-placed a performance management system targeted to evaluate performance against desired objectives. However, it has a gap with regards to involving 42

employees in planning and objective setting, in using performance management system as a motivation tool and in coaching them towards better performance result in the future. Kalashe (2016) revealed in his study on “Employee Perception on The Implementation of The Performance Management System in The Amatola Water Board – Eastern Cape”, that in order to deal with the challenge of Quality Service Delivery by the Public Sector, Government of South Africa has introduced a legal framework to guide the implementation of an individual and organizational Performance Management System. Amatola Water, a government water entity operating in the water sector under the Department of water Affairs; has been considered as selection for the research studies. The implementation of the PMS framework by Amatola Water was considered a need to build upon existing leadership and management capacity in the entity and to optimize its ability to deliver existing services, including present and future programmes. The study focuses on the implementation of the performance management system legal framework at Amatola Water to maintain world-class performance management Practices effectively. McGuire and Gerrish (2016) stated that performance-based management is pervasive in public organizations and countless governments have implemented PMS with the hope that they will improve organizational effectiveness. It has also been revealed that this article conducts a meta-analysis on the impact of performance management on performance in Public Organizations. It contributes to the current literature in three ways. First, it examines the effect of the “average” performance management system, second, it examines the influence of management: whether beneficial performance management practices moderate the average effect, and third, it examines the effect of “time” on performance management. Employees are responsible and needed for the growth of any industry. They are the asset to the industry and act as pillar for the sustainable business and its productivity. PMS consists of performance appraisal and employee development. Performance management basically refers to the process of measuring, managing and developing the performance of the employees. It is the ongoing process of communication between the supervisors and its subordinates to make decisions and strategically achieving the objectives. It allows the organizations to align the resources and system in a strategic way (Rani and Srivastava, 2016). Evaluating the performance of the employees helps in 43

finding the areas in which there is need to give training to the employees, which will help the employees to increase their skills and develop themselves. Pujar and Patil (2015) defined performance management is a goal-oriented system, which ensures that organizational processes exist to maximize the productivity of employees, teams and, ultimately, the organization. The study has focused on the PMS of top pharmaceutical companies for the medical representatives of general medicine category. In competitive markets like the pharmaceutical industry, a high performance sales force is a strategic weapon. The successful execution of strategies for growth, new product launches, new areas/markets and collaboration depends on attracting and retaining the right sales force talent, and then rapidly developing the skills and knowledge needed to operate in this new world. Jurnali and Siti-Nabiha (2015) focused in their study on “Performance Management System for Local Government: The Indonesian Experience”, that good governance and accountability issues have become a serious concern in Indonesia. Consequently, the Indonesian Government has increasingly given attention to the application of performance measurement for the governmental agencies, including local authorities. The PMS regulation is quite comprehensive, except it lacks a punishment and reward system. In order to improve the quality of PMS implementation, the Central Government should regulate the coordination between ministries, provide the monitoring and supervisory system, and improve the local staffs. However, local governments should strive to implement the PMS because it can help them develop a continuous system of improvement. Buckingham and Goodall (2015) realized that the system for evaluating the work of employees and then training them, promoting them, and paying them accordingly. It searched for something nimbler, real-time, and more individualized, something squarely focused on fueling performance in the future rather than assessing it in the past. The new system will have no cascading objectives, no once-a-year reviews, and no 360-degree- feedback tools. Its hallmarks are speed, agility, one-size-fits-one, and constant learning; all underpinned by a new way of collecting reliable performance data. 44

Performance management from the employers prospective, it is vital to understand how your employees contribute to the objectives of the organization. A good performance management system enables the organization to understand how its employees are currently performing. It allows organizations to undertake a thorough assessment of the training needs of its employees, set development plans and gives them the option of using the result of the performance management process to influence an individual remuneration. From the employees prospective, the performance management process provides transparency over performance at workplace and can be used to assess future career development requirements. The major objectives of PMS System are as follows:  It enables the employees towards achievement of superior standards of work performance.  It helps the employees in identifying the knowledge and skills required for performing the job efficiently, as this would drive their focus towards performing the right task in the right way.  It helps in boosting the performance of the employees by encouraging employee empowerment, motivation and implementation of an effective reward mechanism.  It promotes a two-way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicates the functional and organizational goals as well as provides a regular and a transparent feedback for improving employee performance and continuous coaching.  It identifies the barriers to effective performance and resolving those barriers through constant monitoring, coaching and development interventions.  It creates a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment.  It promotes personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills. Any effective performance management system includes the following components:  Performance Planning: This is the first crucial component of any performance management process which forms the basis of performance 45

appraisals. It jointly done by the appraisee and also the reviewee in the beginning of a performance session.  Performance Appraisal and Reviewing: The appraisals are normally performed twice in a year in an organization in the form of mid reviews and annual reviews which is held in the end of the financial year. In this process, the appraisee first offers the self-filled up ratings in the self-appraisal form and also describes his/her achievements over a period of time in quantifiable terms. After the self-appraisal, the final ratings are provided by the appraiser for the quantifiable and measurable achievements of the employee being appraised. The entire process of review seeks an active participation of both the employee and the appraiser for analyzing the causes of loopholes in the performance and how it can be overcome.  Performance Feedback: This is the stage in which the employee acquires awareness from the appraiser about the areas of improvements and also information on whether the employee is contributing the expected levels of performance or not. The employee receives an open and a very transparent feedback and along with this the training and development needs of the employee is also identified. The appraiser adopts all the possible steps to ensure that the employee meets the expected outcomes for an organization through effective personal counseling and guidance, mentoring and representing the employee in training programmes which develop the competencies and improve the overall productivity.  Performance Based Reward: During this stage, an employee is publicly recognized for good performance and is rewarded. This stage is very sensitive for an employee as this may have a direct influence on the self- esteem and achievement orientation.  Performance Improvement Plans: In this stage, fresh set of goals are established for an employee and new deadline is provided for accomplishing those objectives. The employee is clearly communicated about the areas in which the employee is expected to improve and a stipulated deadline is also assigned within which the employee must show this improvement. This plan is jointly developed by the appraisee and the appraiser and is mutually approved. 46

 Potential Appraisal: Potential appraisal forms a basis for both lateral and vertical movement of employees. By implementing competency mapping and various assessment techniques, potential appraisal is performed. Potential appraisal provides crucial inputs for succession planning and job rotation. Figure 2.2: Performance Management System LEARNING & PERFORMANCE PERFORMANCE DEVELOPMENT MANAGEMENT POLICIES OBJECTIVES & STANDARDS ACTIVITIES PERFORMANCE MANAGEMENT SYSTEM PERFORMANCE REWARD & APPRAISAL REMUNERATION MANAGING PROCESS UNDER-PERFORMANCE & STRATEGY DISCIPLINE Source: Performance Management System [AHRI, Australian HR Institute, Victoria] Link : https://www.ahri.com.au/assist/performance-management Performance management practices can have a positive influence on the job satisfaction and employee loyalty by:  Regularly providing open and transparent job feedbacks to the employees.  Establishing a clear linkage between performance and compensation  Providing ample learning and development opportunities by representing the employees in leadership development programmes, etc.  Evaluating performance and distributing incentives and rewards on a fair and equated basis.  Establishing clear performance objectives by facilitating an open communication and a joint dialogue.  Recognizing and rewarding good performance in an organization.  Providing maximum opportunities for career growth. 47

2.3 Factors Influencing Performance Management System The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process. Today, all the major activities of HR are driven towards development of high performance leaders and fostering employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a facilitator and an enabler. Performance management gained its popularity in early 1980’s when total quality management programs received utmost importance for achievement of superior standards and quality performance. Tools such as job design, leadership development, training and reward system received an equal impetus along with the traditional performance appraisal process in the new comprehensive and a much wider framework. Performance management is an ongoing communication process which is carried between the supervisors and the employees throughout the year. The process is very much cyclical and continuous in nature. The following factors are influencing the performance management system of any organization: 2.3.1 Workplace Environment The workplace environment impacts employee morale, productivity and engagement - both positively and negatively. The work place environment in a majority of industry is unsafe and unhealthy. People working in such environment are prone to occupational disease and it impacts on employee’s performance. Thus productivity is decreased due to the workplace environment. It is the quality of the employee’s workplace environment that most impacts on their level of motivation and subsequent performance. Creating a work environment in which employees are productive is essential to increased profits for your organization, corporation or small business. Rismawati (2016) in her study reflected the effect of the work environment, compensation and employee performance against working ethos in Makassar Mariso District Office. The independent variables (work environment, compensation and working ethos) jointly have the positive and significant effect on the dependent variable 48

(employee performance). Through testing the correlation coefficient (R) was obtained that the degree of correlation or relationship between work environment, working ethos against compensation and employee performance is a high correlation and work ethic is the most dominant factor affecting employee performance in Makassar Mariso District Office. Sharma (2016) has given emphasis on the dimensions of workplace environment in terms of physical as well as behavioral components. It has also been revealed in his studies that the workplace environment impacts employee morale, productivity and engagement – both positively and negatively. The work place environment in a majority of industry is unsafe and unhealthy. These includes poorly designed workstations, unsuitable furniture, lack of ventilation, inappropriate lighting, excessive noise, insufficient safety measures in fire emergencies and lack of personal protective equipment. People working in such environment are prone to occupational disease and it impacts on employee’s performance. The relationship between work, the workplace and the tools of work, workplace becomes an integral part of work itself. The rise in these arrangements has led to an increased body of literature seeking to understand how working in these environments impacts workers, whether in terms of employment satisfaction or job motivation (Joseph, 2016). In addition to these benefits, a growing body of research suggests that there are a number of negative consequences for employees stemming from open work environments. These include issues related to privacy and distractions in the workplace. There are many factors which affects the performance of employees working in banking sector. The factors which have direct impact on the performance of employees are stress, training, motivation, leadership, emotional intelligence and working environment. Employees working in banks face huge amount of stress specifically in private banks due to late working hours, superior –subordinate relationship, manager’s attitude and financial rewards. The study is also an attempt to determine the strategies adopted by different banks to improve the performance level of employees (Madan and Bajwa, 2016a) Human resource management as the word itself describes is the management or handling of human resources in the organization which involves the personal satisfaction 49

and goal achievement. HRM practices include compensation, performance appraisal, training and development and career management plays vital role in development, motivation, retention of employees in the organization. The main aim of the study is to know the impact of HRM practices on job performance/working environment of employees (Madan and Bajwa, 2016b). It has also been revealed that ‘stress’ is not an extraordinary thing in a workplace. Work Environment is more and more complex and dynamics. Employees feel high level of stress when they are given targets and deadlines, specially sawing machine operators who responsible for production facing high level of stress regarding assignment of high volume of targets with less time allocation (Sridarran, 2016). Employees working in the BPO industry experience role ambiguity and role conflict whenever they have spontaneous demands from work especially when they have the responsibility of finishing a certain task or product from the beginning until the end. As long as an employee is satisfied with his workplace, he/she will not experience role ambiguity (Castro et al., 2016). The organizational, personal, and interpersonal factors that affect the model revealed the relationship of task demands to role ambiguity and role conflict; work environment to role ambiguity; and interpersonal problems to role conflict. Chandra and Priyono (2016) stated that many factors affect the performance of employees in a work such as working environment. To implement the job effectively and efficiently, the existence of a working environment is required, which is capable of supporting implementation work properly. The emergence of a reaction in the form of attitude, intensive turnover, organizational commitment and job satisfaction are decreased over the existence of the perception of job insecurity, which is correlated negatively with th e performance and positive with the absences. Raziq and Maulabakhsh (2015) revealed that in the modern era, organizations are facing several challenges due to the dynamic nature of the environment. One of the main challenges for a business is to satisfy its employees in order to cope up with the ever changing and evolving environment and to achieve success and remain in competition. Working environment has a positive impact on the job satisfaction of employees. Bad working conditions restrict employees to portray their capabilities and attain full 50

potential, so it is imperative that the businesses realize the importance of good working environment. Oludeyi (2015) mentioned that African Education System is not without impediments to its lofty goals of training and supplying highly skilled manpower, which are capable of helping the mission for growth and development. Effort has been taken to review current literature related to the concept of workplace environment and job commitment with a view to identify areas where further research may be necessary, especially in the Citadels of Learning. The essence is to expand our knowledge framework about workplace environmental factors and job commitments especially among staff in the ivory towers. Jain and Kaur (2014) discovered that work environment can implicate the social relation at workplace and also maintain the relationship between colleague, supervisor and the organization. It describes the neighboring circumstances in which employees are working together. A satisfied, happy and hardworking employee is biggest asset of any organization. Efficient HRM and good work environment or culture affects not only the performance of employee and organization but also affects the growth and development of entire economy. This study indicates that workload, stress, overtime, fatigue, boredom are some factors to increase job dissatisfaction. On the other hand, good working condition, refreshment & recreation facility, health & safety facility, fun at workplace increase the degree of job satisfaction. On the basis of the above discussion, it can be proposed as: H1: Emphasis on workplace environment will enhance the performance level of the employees. 2.3.2 Employee Competency One of the significant benefits that an organization will reap by means of employee competencies is the attainment of the total organizational development which is not possible unless the employees are competent. Further, bridging of competencies of employees by training and motivational measures lead to organizational success, organizational effectiveness and efficiency. Employee competencies are those traits, skills or attributes that employees need to perform their jobs most effectively. Clearly, 51

these competencies will vary by job and position, but there are some commonalities that apply to just about any job in just about any organization. Some of the key employee competencies are as follows:  Intellectual: Intellectual competencies can be defined as what the employee needs to know to perform the functions of the job. This can include industry knowledge, background and expertise.  Interpersonal: Interpersonal competencies are skills required to get along effectively with others. These others may be internal (fellow employees) or external (customers) to an organization. Interpersonal competencies may include such things as the ability to listen non-defensively, and teamwork and customer service skills.  Leadership: Leadership competencies are skills required to lead others. While managers and supervisors obviously need these skills, even employees who are not directly responsible for others may need strong leadership competencies to influence their coworkers or to work effectively as part of a team. Leadership competencies may include the ability to provide effective feedback, give clear direction or evaluate the performance of others.  Organizational: Organizational competencies relate to the ability to effectively organize and manage work and work-related activities. Employees with strong organizational competencies are efficient and effective in the work that they do.  Self-Management: Employees must also be competent in self-management and able to direct themselves toward the accomplishment of goals and specific work assignments. Self-management competencies include the making of effective judgments, the ability to adapt and be flexible as new requirements emerge, and the ability to effectively plan and organize their work to achieve required results. Prasad et al. (2016) described that performance appraisal is a formal system of review and evaluation of individual or team task performance, and in general, peers review an individual’s performance on a continuing yearly basis. The performance appraisal system (PAS) is a development tool used to measure the actual performance in an organization, aligning the strategic goals with that of individual performance. Using PAS an employee’s performance is measured against core competencies such as job knowledge, skill level, job execution, initiative, client orientation, team work, quality and quantity of output, leadership qualities, and compliance to policies and practices 52

including safety and environment, efficient handling of available resources, intuitiveness to take new assignments. However, the core competencies will vary from organization to organization depending on its objectives, business strategies, and mission. Singh and Malhotra (2016) revealed that the organizational success earlier depends on physical & financial asset and today the success is dependent on the intangible ability & capability that lies in the capital and manifest in the form of Competency. The buzzword in the Indian IT industry circle is competency of employee, which acts as catalyst to be competitive and attain sustainable competitive advantage of the firm. Maran et al. (2016) discovered that total productive maintenance (TPM) has been widely renowned as a strategic weapon for improving manufacturing performance to world class level. This has been successfully implemented in many organizations across worldwide. This study integrates TPM implementation with employee training, empowerment, teamwork, compensation and management leadership in a theoretical model for studying employee competency within the framework of management system. The results of this study shows the significant employees competency enhancement during the TPM implementation. Also motivate the companies to adopt for the new improvement projects. From the study it’s clear that the TPM implementations improve the plant performance and productivity to world class level and also make the employee’s fit and potentially competent for their work and future challenges. Potnuru and Sahoo (2016) revealed that the impact of human resource development (HRD) interventions on organizational effectiveness by means of employee competencies, are built by some of the selected HRD Interventions. The findings of the study have potential to help decision makers of manufacturing companies to develop strategies which will enable them to improve employee competency, to formulate effective HRD interventions and to enhance the capability of the employees to achieve desired goals and objectives of the organization. Employee competencies are those characteristics or traits that are acquired by employees, such as knowledge, skills, ability and personality that differentiate them from average performers. 53

Kalyani (2016) stated that competencies are more enduring than job tasks. Competencies focus on the characteristics of people who are successful or unsuccessful in performing the work and these are part of people, not the work they do. The goal is to address this competency mapping, so that managers can put this powerful, productivity- enhancing tool to work in organizations for the purpose of sustainable growth while obtaining competitive edge continuously. Competency mapping is a process and a system for identifying key competencies for a particular position and then using it for sustainable growth. Murgianto et al. (2016) discovered that before reform, performance of employees in License Services Agency/Office in Indonesia is still felt sluggish, convoluted and there is no certainty of cost and how long service duration can be completed. The purpose of this study is to examine the effects of commitment, competence, motivation and work satisfaction on employee performance. The results showed that after implementation of one door integrated services, employee performance had been increased due to by work motivation partially mediate the effect of work satisfaction on employee performance. Siahaan et al. (2016) stated that human resource management policies can improve performance by improving the competence of banking employees and the placement of employees in the right place as well as through the career development of employees as an intervening variable. The study concluded that the employee’s performance can be improved significantly, if the company is able to find employees who have sufficient competency and strive always to improve the competence, put employees in the right place, pay attention and provide career development opportunities. Placement of the right employees is a dominant factor in improving employee performance and career development as an intervening variable has a weak influence than direct effect, in improving the employee performance. Potnuru and Sahoo (2015) focused that, today the functioning of business organizations are changing due to globalization, competitive business environment, information technology revolution, economical changes and development of knowledge sharing and transfer. Employee competency constitutes one of the key sources of competitive advantage for an organization. The employee competency can be referred to as a collection of attitude, skills, and knowledge required to perform a task to a minimum 54

standard. Employee competency at work place is generally reflected in several dimensions such as attitude, rational strategies, mechanical skills, judgmental skills, and knowledge. Chandekar and Khatod (2015) discovered that, in this world of cut throat competition, companies and multinationals are putting tremendous effort to hire competent employees and to develop relevant competencies in their existing employees. These are one of the few ways in which companies can gain competitive edge over each other. In this slowing economy where so many companies are fighting for limited resources and talent and optimum utilization of the same, it is very important for organizations to incessantly reassess their competencies, update it and have the courage to make the necessary changes time to time. It is equally imperative for a firm to define a set of core competencies which corresponds with its key market differentiators, while conducting recruitment and selection process, where competency mapping plays a key role. On the basis of the above discussion, this study proposes the hypothesis as: H2: Emphasis on continuous development of employee competencies will enhance level of performance of the individuals. 2.3.3 Performance Standards and Expectations A performance standard is a management-approved expression of the performance threshold(s), requirement(s), or expectation(s) that must be met to be appraised at a particular level of performance. A fully successful (or equivalent) standard must be established for each critical element and included in the employee performance plan. Performance standards should be objective, measurable, realistic, and stated clearly in writing (or otherwise recorded). The standards should be written in terms of specific measures that will be used to appraise performance. In order to develop specific measurers, emphasis was given to determine the general measure(s) that are important for each element. General measurers used to measure employee performance include the following:  Quality Measure : This addresses how well the work is performed and/or how accurate or how effective the final product is. Quality refers to accuracy, appearance, usefulness, or effectiveness. A quantity measure can be 55

expressed as an error rate, such as number or percentage of errors allowable per unit of work, or as a general result to be achieved. When a quality or quantity standard is set, the fully successful standard should be high enough to be challenging but not so high that it is not really achievable.  Timeliness Measure : This addresses how quickly, when or by what date the work is produced. The most common error made in setting timeliness standards is to allow no margin for error. As with other standards, timeliness standards should be set realistically in view of other performance requirements and needs of the organization.  Cost-effectiveness Measure : Standards that address cost-effectiveness should be based on specific resource levels (money, personnel, or time) that generally can be documented and measured in agencies annual fiscal year budgets. Cost-effectiveness standards may include such aspects of performance as maintaining or reducing unit costs, reducing the time it takes to produce a product or service, or reducing waste. Altrichter and Gamsjäger (2017) emphasized on communication of competence- based output standards, the provision of support material (e.g. competence-based assignments, diagnostic tests) and in-service training opportunities, nationwide comparative competence tests (at the end of the primary and lower secondary cycle of schooling), and data feedback of assessments results to students, teachers, schools, and administrative authorities. It has been mentioned in “A Handbook for Measuring Employee Performance” published by United States, Office of Personnel Management (2017) that employees must know what they need to do to perform their jobs successfully. Expectations for employee performance are established in employee performance plans. Employee performance plans are all of the written, or otherwise recorded performance elements, that set forth expected performance. A plan must include all critical and non-critical elements and their performance standards. Performance elements tell employees what they have to do and standards tell them how well they have to do it. However, to help employees and work units understand the expectations for performance on these elements, we recommend that they have a clear idea of what is considered fully successful performance. 56

It has been published in the journal - ‘Employee Relation/Performance Management Revolution’ of University of South Florida, Division of Human Resources (2016), regarding ‘Staff Performance Management Procedure’ that performance standards and expectations, based on an up-to-date position description, should be clearly communicated to employees at the time of appointment to their position and as they change thereafter. Expectations are the competencies and attributes the employee is expected to demonstrate. Employees should also receive adequate training necessary to effectively perform the duties and responsibilities of their position. It is an expectation that employee goals will align with the organization’s strategic plan, vision, mission, values, and goals. Goals are typically established annually at the beginning of the annual evaluation cycle and should be monitored periodically during the cycle to discuss the employee’s progress and whether any of the goals need to be modified. Kenny et al. (2016) discovered that their research has presented some conflicting views on the consequences of aging in the workforce, as physically demanding occupations can be associated with improved or maintained physical function. Nevertheless, industry often lacks the appropriate information and/or tools to accommodate the aging workforce, particularly in the context of physical employment standards. Ultimately, if appropriate workplace strategies and work performance standards are adopted to optimize the strengths and protect against the vulnerability of the aging workers, they can perform as effectively as their younger counterparts. Zumbo (2016) stated that performance standards usually contain performance level, labels such as “pass” or “fail” for two categories, or “beginning”, “intermediate”, and “advanced” if there are more than two categories. To be useful and effective in the standard-setting process, performance standards must include more than just performance labels; instead standards need to include longer elaborations that are intended to more fully describe what the label (e.g., pass) indicates about what a test-taker can do. This elaborated process is widely referred to as “standard-setting”. With the description of the conceptual version of the desired levels of competence, i.e., the performance standard, at hand the next step is to translate these descriptions to the operational version of the desired level of competence by setting the cut-score on the test. The study has given an overview of standard-setting methodology and to describe the essential features, key definitions and concepts, and various novel methods of informing standard-setting. 57

The foregoing terms are combined with performance management-related search terms, and the five exact phrases are used such as: “performance system,” “performance management,” “performance measurement,” “performance standard,” and “performance information.” This article conducts a meta-analysis on the impact of performance management on performance in public organizations. It contributes to the current literature in three ways. First, it examines the effect of the “average” performance management system. Second, it examines the “influence” of management: whether beneficial performance management practices moderate the average effect. Third, it examines the effect of “time” on performance management (McGuire and Gerrish, 2016). However, the effect is substantially larger when indicators of best practices in high- quality studies are included, indicating that management practices have an important impact on the effectiveness of performance management systems. Thus, it can be hypothesized as: H3: Clearly defined performance standards and expectations for the employees will have a positive impact on individual performance. 2.3.4 Performance Appraisal Performance Appraisal is the assessment of individual’s performance in a systematic way. It is a developmental tool used for all round development of the employee and the organization. The performance is measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility and health. Assessment should be confined to past as well as potential performance also. It is said that performance appraisal is an investment for the company which can be justified by following advantages: 1. Promotion: Performance appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case. 2. Compensation: Performance appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance appraisal tries to give worth to a performance. Compensation packages which 58

includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. 3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyze strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes. 4. Selection Validation: Performance appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard. 5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, effective communication can be sought for in the following ways: a. Through performance appraisal, the employers can understand and accept skills of subordinates. b. The subordinates can also understand and create a trust and confidence in superiors. c. It also helps in maintaining cordial and congenial labour management relationship. d. It develops the spirit of work and boosts the morale of employees. 6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future. RUSU et al. (2016) stated that employee performance appraisal in the modern business environment has become a part of the performance management process. Recent studies highlight the importance of employee performance appraisal in the context of strategic human resources management, outlining the role of organizational context. Accordingly, the paper presents an employee performance appraisal conceptual framework including the role of contextual factors, where strategic human resources management plays a key role. 59

Agyare et al. (2016) explored that; performance appraisal is credited by researchers as a tool for spurring employees towards the attainment of organizational goals. Considering employees’ attitudes as a vital component in the attainment of organizational goals, this study investigated the impacts of performance appraisal on the job-satisfaction and commitment of employees. The study revealed that employees’ job satisfaction is positively related to and impacted by fairness in the appraisal system, linking appraisals with promotion, clarity of roles and feedback about their performance. The study also revealed that employees’ commitment is positively related to and impacted by the linkage of appraisals with salary, identification of training needs, clarity of performance appraisal purpose and employee involvement in the formulation of appraisal tools. Majid (2016) discovered that performance appraisal (PA) of employees is one of the most significant HRD practices in organizations, by which employee’s satisfaction and overall development can be managed well. PA is typically used for a variety of reasons such as employee rewards, pay rises, job oriented feedback, career and individual development, it is most often scheduled annually or semiannually. Organizations can use PA as a competitive advantage strategically to enhance the satisfaction levels of the individuals at work and effectively increasing the productivity of the employees by risk and reward mechanism. Antwi et al. (2016) mentioned that human resource management (HRM) practices and their impacts on employees’ performance, receive enormous cover. The main objective of the study was to examine the impacts of HRM practices on the performance of employees in four selected branches of Ghana Commercial Bank (GCB). The study established a very important relationship among HRM practices and employees’ performance. The selected HRM practices which formed the independent variables are training & development, motivation, performance appraisal, internal communication, and reward/remuneration while employees’ performance stood as the dependent variable. Khan et al. (2016) stated in their research on “Performance Appraisal System in Majan Electricity Company (Sohar, Oman) and its Impact on Employees’ Motivation” that, Majan Electricity Company started its own business as a private company owned by government in May 2005 in three rejoins: North Batina, Buraimi, and Dhahira. Being one of the leading companies in the sultanate, Majan Electricity Company has adopted a 60

number of quality assurance strategies throughout its internal operations. The company has utilized a performance appraisal system which is a combination of technical and behavioral measures that are directly linked with the key performance indicator of the company itself to reach the highest level of quality and productivity through its employees. The prevailing performance appraisal system aims at monitoring, recording, and measuring the variable aspects of the employee’s work flow in the company. This appraisal system is essential for both the company and the employees as it is assessing the company’s performance through its employees’ performance. The company aims to sustain the employee’s performance throughout their work by providing the employees with a positive environment that motivates them in order to perform well. Khan and Singh (2016) revealed in their studies on “Performance Appraisal System at Airports Authority of India (AAI), Lucknow”, that PA deals with all the methods used to evaluate personalities, contributions and capability of groups in any organization. Performance appraisal is a progressive process to obtain important information for making rational and objective decisions on employees. In other words, performance appraisal is the process of assessment of the individual in accordance to his performance on the job and his capacity to develop into something better in future. To be successful, performance appraisal system should be used as a base for development and improvement plans and to reach at an agreement about what is to be done in the future to enhance the effectiveness. Singh and Vadivelu (2016) discovered that globalization has created a niche to sustain and enhance human resource since they are the prime contributors to organizational performance. PA has been a significant tool in developing the capabilities of individuals and organizations, since the era of economic modernization and globalization in India. PA has been adopted and practiced across many organizations. Hence, performance appraisal (PA) is extensively used to facilitate salary increments, promotions, staff retention and to reinforce staff behavior. This paper is aimed providing a review on the various performance appraisal techniques practiced in Indian economy. Narban et al. (2016) revealed that the purpose of their study is to explore performance measurement practices in the context of hospitality industry in New-Delhi. Performance appraisal (PA) is increasingly becoming a part of strategic approach to 61

integrate HR activities and business policies. PA refers to all those procedures that are used to evaluate the personality, the performance, and the potential of its group members. Performance appraisal is a powerful tool to provide management valuable information regarding the quality of its human resource. Performance appraisal thus becomes all the more critically important in service industries than in other type of industries. In this paper, authors propose a framework for the selection of appraisal methods and compare some performance appraisal methods in order to facilitate the selection process for organizations. Khanna and Sharma (2014) stated that the importance of performance appraisal in performance management system is that it plays a vital role in any organization’s human resource framework. Performance appraisal is an important tool in the hands of personnel management, because this technique accomplishes the main objective of the department for the development of people by appraising the worth of the individual. Performance management process provides a vehicle through which employees and their supervisors collaborate to enhance work results and satisfaction. This process is most effective when both the employee and the supervisor take an active role and work together to accomplish the objectives of organization. Aggarwal and Thakur (2013) discovered that performance appraisal system is used in the organizations to measure the effectiveness and efficiency of their employees. Performance appraisal system is needed because every employee has a different attitude to handle the work. Performance appraisal tends to improve the work performance, communication expectations, determining employee potential and aiding employee counseling. Performance appraisal has been synonymous with performance review, performance evaluation, performance assessment, performance measurement, employee evaluation, personnel review, staff assessment, service rating, etc. Hence, in the line of above discussion it can be proposed as: H4: Emphasis on performance appraisal for all round development of the employees will have a positive relationship with the organizational performance management system. 62

2.3.5 Employees Training Training is the process of enhancing the skills, capabilities and knowledge of employees for doing a particular job. Training process shapes the thinking of employees and leads to quality performance of employees. It is continuous and never ending in nature. This is crucial for organizational development and success. It is fruitful to both employers and employees of an organization. An employee will become more efficient and productive if he is trained well. Training is given on four basic grounds: new candidates who join an organization are given training; existing employees are trained to refresh and enhance their knowledge; in case of rationalization and technological upgradation, training is quite essential; and when promotion and career growth becomes important, training is given so that employees are prepared to share the responsibilities of the higher level job. Raja and Salah (2016) discovered that the success or failure of modern business organizations depends on the quality of their human resources. Well trained and highly developed employees are considered as corner stone for such success. Hence the purpose of the study was to investigate the relationship between training, development, training and development and employees’ performance and productivity in selected Jordanian private sector transportation companies located in the southern region of Jordan. The study concluded that training and development have important impact on employee performance and productivity. Therefore, it was recommended that effective training programs and carefully set development plans should be provided to all employees to enable them to enhance their skills and upgrade their knowledge. Tuğçe Güllü (2016) aimed to study the impact of training and development programs on motivation of employees in banking sector. There are various factors like training and development where each factor contributes to overall employee motivation. This study concludes that training and development programs contribute greatly to employee's motivation. The results show that training and development programs have positive impact on motivation of employees in banking sector. Wamuuru and Jamleck (2016) mentioned that today’s office which is dynamic and competitive in nature, expect managers and employees of all levels constantly improve and achieve the organizational objectives. This study was based on four supporting theories to develop a conceptual framework where the factors that are 63

influencing, mediating and intervening the relationship between the HRM and organizational performance are proposed. The independent variable was HRM practices (reward management, training and development, recruitment/selection and quality working life) while the dependent variable was organizational performance. These were mediated by employee behavioural outcome which is an element of HRM practices. Leadership is the intervening variable. The study confirmed that there is a significant direct/positive relationship between the HRM practices and organizational performance. Bawuro et al. (2016) stated that, training and development is an important aspect in organizational studies. The focus is to investigate what value employees place on training and development during recession, particularly their views on the impact of recession on the level of investment. Therefore, in order to maintain the focus of the study, the researcher has taken Adama Beverages Ltd. as a case study. The findings conform to the previous studies which state that recession has a potential impact on the level of investment. However, the analysis illustrates a strong reluctance by employers of Adama beverages Ltd to slash on training budgets. As a result, the company struggled to maintain the trainings by selecting the type of training programs and prioritizing the trainings when necessary. The implication of this perception can lead to low morale, low commitment and low productivity. Therefore, the study concludes that employee training and development is something, which employers increasingly need to maintain during recession. The study has explored the relationships among employee training, innovation and turnover. Both extensive training and training in multiple functions have negative correlations with turnover. This result indicates that extensive training and training in multiple functions can be used as a tool for decreasing high turnover rates. Similarly, there is a negative correlation between innovation and turnover. This result shows that employees see innovations as a catalyzer for achieving success in their job. A positive atmosphere comes with organizational change by innovation and these reforms lead to retention of employees in the organizations (Kesen, 2016). Ramya (2016) aimed at studying the effect of training on employee performance and investigates the importance of training, identify the significance of employee performance and to provide suggestion as to how firm can improve its employee performance through effective training programs. Training has an important role to play 64

and it is expected to inculcate positive changes in knowledge, skills and attitudes. Employees’ training tries to improve skills so that employee is better equipped to do his present job. Training programmes are necessary in any organization for improving the quality of work of the employees at all levels particularly in a world of fast changing technology and environment. For the organization, training and development leads to improve profitability while cultivating more positive attitudes toward profit orientation. Asfaw et al. (2015) discovered that the focus of his study was to determine the impact of training and development on the employees’ performance and effectiveness at District Five Administration Office, Addis Ababa, Ethiopia. To the knowledge of the investigators, there are no studies which examine the impact of training and development on employee’s performance and effectiveness conducted in District Administration Office level in Addis Ababa, Ethiopia. Training is imparting a specific skill to do a particular job while development deals with general enhancement and growth of individual skill and abilities through conscious and unconscious learning. The main purpose of training and development is by improving the employee competencies so that organizations can maximize efficiency and effectiveness of their human assets. Training and development are the processes of investing in people so that they are equipped to perform well. These processes are part of an overall human resource management approach that hopefully will result in people being motivated to perform. On the basis of the above discussion, the hypothesis was derived as: H5: Emphasis on employee training measures will enhance the skills, capabilities and knowledge of employees and influence the performance management system. 2.3.6 Post Appraisal Measures Each performance appraisal offers feedback that can be used in a variety of ways. Managers need to be aware of what can go wrong when they deliver performance appraisal feedback. There are specific guidelines managers can use to deliver the appraisal and the feedback. In addition, performance appraisals can be used to develop and enhance employee careers. After the appraisal takes place, the plan for improvement can be implemented. During this time, managers can regularly keep records of employee performance. These can be informal observations that can aid the manager in gauging 65

employee progress. In addition, employees can have the specific goals for improvement in mind. Periodically, the manager and employee can meet face to face to discuss employee progress. Employees can give feedback on how well they think they are progressing. In addition, employees can ask specific questions on any of the goals they are struggling with. Sharma (2016) investigates the relationship of performance appraisals, socio- cultural issues, affirmative action (AA), and organizational capabilities in managing diversity and equality in the workplace. As per investigation firstly, performance appraisals were found to be a major source of discrimination especially due to raters’ influence on the actual process. Socio-cultural issues had major role as some managers went out of their way in helping their subordinates, especially in paternalistic countries, whereas some left it to workers themselves. AA was laid out to ensure that organizations meet statutory requirements but it often came down to managerial commitments. Finally, this paper found that organizations have to develop capabilities so as to encourage diversity and equality in the workplace. Oni (2016) discovered that staff performance management is globally recognized as an important human resource management process in organizations that seek to achieve peak performance, stay ahead of competition and continue to be a vibrant going concern. There are however a significant number of organizations that are yet to appreciate and give prime focus to the central place of staff performance appraisal and management in the pursuit of peak business performance. In this paper, the nature and scope of staff performance appraisal and management in formal organizations has been discussed and high importance of good and effective staff performance appraisal and management for all stakeholders in the organization, have been stressed in order to achieve maximum career and personal development for staff and enhance overall organizational performance and impact, which will strengthen its continuity and growth. Jency (2016) stated that performance appraisal plays a vital role in any organization’s human resource framework. Performance appraisal is an important tool in the hands of personal management because this technique accomplishes the main objective of the organization to the development of the people by appraising the worth of the individual. There are different methods of performance appraisal based on the type of 66

the organization, size of the organization and also the period when it is used. 720 degree performance appraisal, considered an “all-round” appraisal, is one of the most recently introduced concepts. As the name suggest, 720 degree is 360 degree twice. 720 degree performance appraisal is the evaluation of an employee from all the aspects and giving timely feedback to ensure that the person is able to achieve the set goals before the next appraisal. Many management experts feel that doing a comprehensive 360 degree appraisal is not complete in itself. Ismail et al. (2016) revealed that performance appraisal communication is a segment of performance appraisal management denoting the process of sharing and transferring appraisal information from appraiser to appraisee either face-to-face or through technical and communication gadgets. The traditional performance appraisal was based on past performance of the employees, single-source feedback, non-participation style in decision making and boss-centred approach. It did not consider the development aspects of the employee performance as it was preoccupied with judging the performance of the organization as a whole. To address the drawback of this approach, modern approaches were introduced in the era of globalization which centred on humanistic perspectives, system thinking and contingency views. In the light of the new approaches, this paper examines the effect of performance appraisal communication and procedural justice on job satisfaction of employees. Hosain (2016) exposed that the overall performance of a firm is mostly dependent on the individual and group performance of the organization. Performance appraisal is a continuous process of monitoring, managing and correcting the individual performance of entire workforce. 360 degree feedback is considered as one of the yardsticks of performance appraisal process which reduces and changes the traditional supervisor based appraisal method. This qualitative study has been carried out to discover whether 360 degree feedback is effective as the part of overall performance appraisal process highlighting results from previously conducted researches and also, made an attempt to deliver some recommendations about how to use it more efficiently. Singh (2016) expressed that performance appraisal is a formal and systematic process of identifying, observing, measuring, recording and developing the job-relevant strengths and weaknesses of employees. In order to obtain accurate performance appraisal 67

information, raters must provide objective and unbiased ratings of employees. Performance appraisal method can be used for numerous purposes including: reward; discipline; coaching; counselling; improving the work environment; raising morale; clarifying expectations and duties of employees; improving upward and downward flow of communications; providing information to support HR activities; improving perceptions of organizational goals; and selecting people for promotion and redundancy. A performance appraisal system is wider concept and has become part of a more strategic approach to HR practices. Narban et al. (2016) explored in their studies on performance measurement practices in the context of hospitality industry in New-Delhi. In today’s competitive business world, it is well recognized that organizations can only compete with their rivals by innovating. Performance appraisal is a key decisive factor of success in service (hospitality) organizations. The reason being that in the service sector there is no tangible output. The service is produced and consumed/sold at the same moment. So, the chances of rejecting or controlling the quality of the service - in contrast to industries producing tangible goods - before it reaches the hands of consumers is very limited. The intangibility of services in hospitality industry, poses a number of problems for the measurement of quality and customer satisfaction. Performance appraisal thus becomes all the more critically important in service industries than in other type of industries. Simsit and Vayvay (2015) revealed that nowadays, in the competitive business conditions controlling and improving quality levels of operational processes is not enough to gain advantages among rivals. However, as it is well known fact that performance of employee’s creates a great impulse on improvement, companies also need to examine and evaluate the performance of them as one of the part of their quality management strategies. In this point, performance appraisal which is a systematic and periodic process managed by a manager or consultant which (i) examines and evaluates an employee's work behavior by comparing it with preset standards, (ii) documents the results of the comparison, and (iii) uses the results to provide feedback to the employee to show where improvements are needed, become an important tool to achieve higher quality levels. For enterprises, performance appraisal helps them diagnose whether the adopted strategy and organizational structure will help to achieve their goals. In both ways, performance appraisals directly affect the quality levels in companies. This study aims to create a 68

vision for performance appraisals as a quality management tool so a literature review was constructed from the quality management view of point to understand the importance of performance appraisals. On the basis of the above discussion, it is proposed as: H6: Organizational emphasis on post appraisal measures will influence the degree of performance management system by reducing the competency gap of individuals. 2.4 Facilitators of Performance Management System A performance management process sets the platform for rewarding excellence by aligning individual employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. Performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. It’s about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance. A company might have a world-class performance management system in place, but the system is only as effective as the managers who implement it. Companies that want to increase organizational and employee performance and productivity should invest in getting the right managers in place and support them in engaging their employees. The facilitators of performance management system are as follows:  Mission, Vision, Goal and Objectives  Organization Culture  Organizational Development  Recognition & Rewards 2.4.1 Mission ~ Vision ~ Goal ~ Objectives The terms, vision, mission, goals and objectives have great importance in management literature. Understanding these terms will not only lead a person to get the conceptual meaning being associated with them, but it will also be complementary in many ways. Being used across an enterprise, the aforementioned terms have a lot to do with a business having a significant impact on both short term and long term success of a business including its performance and processes. 69

Mission: Mission means ‘Statement of business’, which states the business reason for the organization's existence and does not state an outcome. It contains no time limit or measurement, provides basis for decisions on resource allocation and appropriate objectives, defines current and future business in terms of product, score, customer, reason, and market price. Vision: Vision means ‘Dream or a picture to be achieved ultimately’, which is created by consensus. It Forms mental image of future to which people can align, Describes something possible, not necessarily predictable and Provides direction and focus. Pulls people, who hold it, towards it. Goals: Goals means ‘Results to be achieved’. Goals Describe ideal states to be achieved at some unidentified future time, Define consistent with and related directly to Vision and Mission. Guide everyday decisions & actions and do not necessarily deal with measurable results. Objectives: Objectives means ‘How - Actions and Results - to plan to achieve the desired results’ Objectives Focus on critical organization issues and milestones, Describe activities to be accomplished to achieve goals, Identify dates when specific results are to be accomplished and Measurable in terms of whether or not they are achieved. They may be changed when necessary for progress towards Goals. Hofstrand (2016) stated that the first statement is “A statement of Vision”, which provides a destination for the organization and the next is “A statement of Mission”, which is a guiding light for getting the destination. Thus Vision is “big picture of what you want to achieve” and Mission is “general statement of how you will achieve the vision”. A companion statement often created with the Vision and Mission, is “A statement of Core Values”. Thus Core Values is “How you will behave during the process”. Once you have identified what your organization wants to achieve (Vision) and generally how the vision will be achieved (Mission), the next step is to develop a series of statements specifying how the mission will be utilized to achieve the vision such as: Strategies – Strategies are one or more ways to use the mission statement in order to achieve the vision statement. Although an organization will have just one vision statement and one mission statement, it may have several strategies; Goals – These are general statements of what needs to be accomplished to implement a strategy; Objectives – Objectives provide specific milestones with a specific timeline for achieving a goal; 70

Action Plans – These are specific implementation plans of how you will achieve an objective. In “Mission / Vision / Values / Goals” article, published by One Street (A Non- Profit Corporation) 2016, USA provides bicycle advocacy resources and consulting to non-profits around the world because the most effective change happens locally. We honour their unique circumstances as they work to increase bicycling in their communities. Our Mission: To serve, with kindness and respect, leaders of organizations working to increase bicycling, including pedestrian, transit, and social equity needs. A sample of important guidelines on “MISSION / VISION / VALUES / GOALS” of One Street, USA is as follows: Mission: One sentence, easy to memorize; Captures the purpose of your organization far into the future; Shows how your organization is unique from others; - this will be your filter for decision making Vision: One short paragraph in present tense describing the communities your organization serves after your organization has achieved its mission Values: A short list, also known as principles; The values behind why the organization was created; Try to include organizational, human, social, economic and political values. Goals: A short list of long-term goals, approximately three years out; Keep goal statements general and pertinent to your organization’s mission; Update goals every two- three years (mission, vision and values should be more permanent) Alam and Alabdulaali (2016) revealed that strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. “The best way to predict the future is to create it”. “The best way to create the future is by strategic planning”. Strategic plan of King Fahd Hospital in Hofuf (KFHH) prepared for the medium range of three years is in alignment with the Ministry of Health, Kingdom of Saudi Arabia. Key components of strategic planning include an understanding of the organization’s vision, mission, values and strategies and involves following strategic planning cycle on an annual basis. Vision outlines what the organization wants to be in the future. Mission explains who we are and what we do. Values are beliefs that are shared among the stakeholders of an organization. Strategy is a high level plan to achieve the goal. 71

Rego et al. (2015) explored that management depends on choices, on the hierarchy of actions, goals and values on which these decisions are founded, because values guide our actions. Their study aims to identify the contents exposed in the vision, mission and values of the hospitals in the north of Portugal. It also aims to analyze the existence of content differentiation, based on the implemented management model. It promotes good practice via an ethical culture of quality of service, humanization and respect for the dignity of each person. The mission of a hospital represents its reason to exist, the definition of its role in the community and the inherent responsibilities, i.e., it establishes the service it provides to society. In this sense, it refers the employees to a common orientation and helps to define the organizational objectives, making them more operative. Siddiqui (2015) stated that the terms, vision, mission, goals and objectives have great importance in management literature. Understanding these terms will not only lead a person to get the conceptual meaning being associated with them, but it will also be complementary in many ways. Being used across an enterprise, the aforementioned terms have a lot to do with a business having a significant impact on both short term and long term success of a business including its performance and processes. Vision: Vision refers to an image or a concept. It’s the ability to anticipate possible future events and developments with imagination and wisdom. Vision in management literature, may be defined as a mental image of a business manager for possible and desirable future of an organization. It may also be defined as a strong belief of a manager about the specific course of action for the business organization. To put it simply, vision refers to where an organization wants to be in the future. Mission: It is not that an organization is formed in a vacuum or with no purpose it stands. Of course, it has a reason for its existence which is specific. It runs based on it. The purpose is known as mission. Objectives: Objective in general indicates a place where you want to reach. In organizational literature it means the aim which an organization tries to achieve. Objectives are generally in plural form. Objectives are predetermined; they provide clear direction to the activities and results to be obtained from the planning process. Objectives must be SMART (Specific, measurable, achievable, realistic and timely). Objectives must be clearly defined, so that the works become goal-oriented and the unproductive and unsystematic tasks can be avoided. Goals: A Goal is simply something that somebody wants to achieve. The synonyms of 72

goal are: aim, ambition, purpose, target and objective. Simply speaking, goal refers to the purpose towards which the efforts are made or endeavors are directed. Shahmehr et al. (2014) revealed that in the last 20 years’ tremendous changes have occurred in the two fields of performance appraisal and performance management. These changes can be observed both in managerial practices and academic researches. The majority of organizations have a long path to establish a system of performance management because this system is not only to evaluate the organizational performance, but enables managers to follow up the targeted mission. In other words, performance management is to establish a common vision for each single employee and derives them through the right way. The first step in the process of performance management is to design the mission statement of organization. This is a brief definition of the organization objectives in answering ‘which should be done’ and ‘what should be obtained’. The mission statement or the organization vision is a document, which replies questions such as ‘what is our goal’, ‘why do we exist’, and ‘what do we want to do’? Performance management is a strategic and integrated process which provides sustainable success for organizations through developing individual and group capabilities and matching individual performance with organizational objectives. Sonkiya (2014) mentioned that vision, mission and objectives are frequently used terms and people use these terms interchangeably and that make them confuse. Therefore, they find difficulty to relate strategies and tactics with these terms and this is where the things go wrong as it mixes up the meanings and create confusions. A real strength within organizations is gained when these statements are defined with clarity, completeness, and are consistent with each other. This implies that there should be an alignment between all of these statements. This alignment can be ensured by the assessment of: 1. Definition: Whether these statements are defined for the organization for the foundation of success? 2. Clarity: If these statements provide a direction and plan for the work, organizational resources are carried out? 3. Communication: Are Organization resources aware about these statements and use them as a context of the work, they do? 4. Commitment: Whether these statements make people supportive to the organization for their intent and whether they are agreed to the content of these statements? 73

If these statements are defined by above characteristics and answer of these questions are ‘Yes’, organization internal capability is significantly ensured and if any of the above is lacking, there is a potential of Weakness which in turn limits or undermines the organization’s efforts. 2.4.2 Organizational Culture Organizational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs. Every organization develops and maintains a unique culture, which provides guidelines and boundaries for the behavior of the members of the organization. Organizational culture is composed of seven characteristics that range in priority from high to low. Every organization has a distinct value for each of these characteristics, which, when combined, defines the organization's unique culture. The seven characteristics of organizational culture are: 1. Innovation (Risk Orientation) - Companies with cultures that place a high value on innovation encourage their employees to take risks and innovate in the performance of their jobs. 2. Attention to Detail (Precision Orientation) - This characteristic of organizational culture dictates the degree to which employees are expected to be accurate in their work. A culture that places a high value on attention to detail expects their employees to perform their work with precision. 3. Emphasis on Outcome (Achievement Orientation) - Companies that focus on results, but not on how the results are achieved, place a high emphasis on this value of organizational culture. A company that instructs its sales force to do whatever it takes to get sales orders has a culture that places a high value on the emphasis on outcome characteristic. 4. Emphasis on People (Fairness Orientation) - Companies that place a high value on this characteristic of organizational culture place a great deal of importance on how their decisions will affect the people in their organizations. For these companies, it is important to treat their employees with respect and dignity. 74

5. Teamwork (Collaboration Orientation) - Companies that organize work activities around teams instead of individuals place a high value on this characteristic of organizational culture. People who work for these types of companies tend to have a positive relationship with their coworkers and managers. 6. Aggressiveness (Competitive Orientation) - This characteristic of organizational culture dictates whether group members are expected to be assertive or easygoing when dealing with companies they compete with in the marketplace. Companies with an aggressive culture place a high value on competitiveness and outperforming the competition at all costs. 7. Stability (Rule Orientation) - A company whose culture places a high value on stability are rule-oriented, predictable, and bureaucratic in nature. These types of companies typically provide consistent and predictable levels of output and operate best in non-changing market conditions. Alas et al. (2016) stated that over the last decade, workplace spirituality has become a buzzword in business and organization literature. Furthermore, many studies have affirmed its significance in satisfying individuals’ inner feelings and self- actualization. As organizational culture represents the personality of any organization, it has a tremendous role in shaping current and future organizational orientation. Mohammed et al. (2016) discovered that the challenges in higher education and global competition encouraged performance excellence and the pursuit towards providing educational services characterized by high quality. To ensure performance excellence, quality management practices are considered as one of the variables that affect the organizational performance. On the other hand, organizational learning is a method that facilitates the process of improving the organizational performance. Rovithis et al. (2016) revealed that organizational culture is a multidimensional concept that has emerged independently in several disciplines ranging from social anthropology to organizational psychology. It can be defined as the set of beliefs, values, behavioral patterns and assumptions shared by the members of an organization. Organizational culture has captured the attention of academics and professionals in varying disciplines, including health care services because of its potentially profound influence on organizational performance, and its association with leadership and employee effectiveness, productivity and work satisfaction. 75

Rovithis et al. (2016) further stated that organizational culture has been defined as an important characteristic that influences the effectiveness or ineffectiveness of providing quality health care services. Organizational culture (OC) is a multidimensional concept that has emerged independently in several disciplines ranging from social anthropology to organizational psychology. OC includes norms, systems, vision, assumptions, beliefs, philosophy, and values that hold together, and is expressed in its self-image, affects the way people and groups interact with each other, with clients, and future expectations. In the professional field of health care, organizational culture has been positively associated with elements of organizational performance that contribute to quality of services, such as nursing care, job satisfaction, patient and personnel safety, personnel turnover rate and change of management process. Giri et al. (2016) analyzed the influence of organizational culture on organizational commitment, knowledge sharing and employee performance; the effect of job involvement on organizational commitment, knowledge sharing and employee performance; the effect of organizational commitment to knowledge sharing and employee performance; and the effect of knowledge sharing on employee performance. Violinda et al. (2016) mentioned that differentiation strategic and organizational culture is one of the key in searching for competitive advantage and performance in strategic management. The differentiation strategy and organizational culture stands out as one of the components that are important to sustaining competitive advantage, performance, and a good reason for becoming a great institution and company. Jwijati and Bititci (2015) explored that despite referring to organizational culture (OC) as the key factor for successful implementation of performance measurement systems (PMS) and acknowledging the dyadic relationship between PMS and OC, there is dearth of articles describing the relationship between various types of organizational culture and PMS. The objective is exploring the relationship between PMS and OC from performance measures types, aim(s) of performance measurement and the degree of employees’ involvement in the PMS design and use perspectives. Lapina et al. (2015) mentioned that organizational culture is directly connected with effectiveness and performance of the organization – the stronger is organizational 76

culture, the more effective is organization. The research has resulted in creating characteristics of organizational culture and analysis of the factors that affect the development of the organizational culture. Schneider et al. (2013) stated in their study on “Organizational Climate and Culture”; that the article is first framed with definitions of the constructs, and preliminary thoughts on their interrelationships are noted. Organizational climate is briefly defined as the meanings people attach to interrelated bundles of experiences they have at work. Organizational culture is briefly defined as the basic assumptions about the world and the values that guide life in organizations. A brief overview of the more recent study of organizational culture is then introduced, followed by samples of important thinking and research on the roles of leadership and national culture in understanding organizational culture and performance and culture as a moderator variable in research in organizational behavior. The final section of the article proposes an integration of climate and culture thinking and research and concludes with practical implications for the management of effective contemporary organizations. Shahzad et al. (2012) discovered on defining and measuring of organizational culture and its impact on the organizational performance, through an analysis of existing empirical studies and models link with the organizational culture and performance. The objective of this article is to demonstrate conceptualization, measurement and examine various concepts on organization culture and performance. It also describes the different dimensions of the culture. Managers and leaders are recommended to develop the strong culture in the organization to improve the overall performance of the employees and organization. Ng’ang’a and Nyongesa (2012) discovered that every organization has a culture - good or bad. However, there is more to a good culture than happy staff. In order to aid long-term performance, there are three main criteria needed to develop a suitable culture: it must be strategically relevant; it needs to be strong in order that people care about what is important; and the culture must have an intrinsic ability to adapt to changing circumstances. Culture impacts most aspects of organizational life, such as how decisions are made, who makes them, how rewards are distributed, who is promoted, how people are treated, how the organization responds to its environment, and so on. 77