Page |1 AMITY BUSINESS SCHOOL Q1.

(a) CITE NEW AND USEFUL SKILLS TO BECOME EFFICIENT AND EFFECTIVE IN BUSINESS

Frenchman Henri Fayol describes management as a composition of five functions namely planning, organizing, leading, coordination and control. Planning: Planning involves identification of your business goal and finding the way to reach it. It involves the estimation of various costs that will be incurred and evaluation of the time required to attain the business goal. A business plan has to be documented and reviewed on a regular basis. A plan is worth it if the attainment of the business goal is feasible with the planned resources. You need to communicate your plan to your employees and accept their feedback. Organizing: It involves the assignment of tasks and allocation of resources throughout the business organization. It includes determining the primary goals of the business and strategies to reach them. Divide the activities into tasks and assign the tasks to suitable and deserving employees. Leading: Leadership is a management skill in itself. A true leader inculcates feelings of confidence, admiration in the followers and a sense of commitment towards their business. A leader influences others to follow him. Transformation is the need of the day and so, leaders need to be flexible, adaptable to change and encourage these qualities in the team members too. Being innovative is important for business growth. Innovation is a skill in itself. Leaders need to be open to new ideas, they need to innovate, bring in positive change as and when needed and progress. Rather, progress is hardly possible without innovation. A leader not only dreams but also provides his employees with a framework to fulfill those dreams. Innovation involves both imagination and action in accordance with it. Delegation is another important aspect of leading. It refers to allocation of tasks to the right people. It involves entrusting deserving candidates with work that they can do best.

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Coordination and Control: These skills are important for the success of a business. Coordination involves effective communication between team members and across teams. It is useful in tracking activities towards goal achievement. It is crucial to taking decisions about the future lines of action. Control is better implemented in the form of able guidance given to employees by their manager. Evaluations are necessary to track business performance. Business is 'busy-ness'. In simple words, it refers to the act of being busy in productive work. Management is the process of measurement of the amount of work. It also involves assessing the quality of work and productivity. The ability of directed thinking to develop a business idea is another business management skill. One more quality that a skilled manager should possess, is the willingness to work hard towards the achievement of his business goal. Management guru Peter Drucker made a distinction between being efficient and being effective. According to him, performing an activity swiftly and economically refers to being efficient, while doing the right thing at the right time, with efficiency refers to effectiveness. Good business management skills lead you to the right goals. On the other hand doing the wrong things or doing things in the wrong direction is a waste of time and energy. In other words, it's the exercise of efficiency to no avail. A leader should know how to prioritize business activities. He should be able to understand what's important for the business and differentiate it from what is urgent. That is important for effective business management. As a leader, you should be able to understand the weaknesses of the organization and try to improve on them. You must be able to look at the threats to your business and fight them effectively. You should have the skill to endure every setback and learn from your mistakes. Successful business development strategies used by others can help you devise your own. This is when your skill to 'experiment' comes in the scene.

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Experimentation has to be accompanied by the right judgment of your actions and results. Business management includes management of money and time too. Being a team manager, you have to time yourself and schedule tasks for your team, so that deadlines are met. Management of money is an integral part of running a business. The activities of buying, selling and pricing have to be done skillfully. Business management is not a cakewalk. It includes everything from planning, supervising, and right up to being the spokesperson for your business. People skills, as they are called, are important for a manager to acquire. After all, management is about handling people. Bringing out the best from the people you are leading is an important part of management. Difficult people, those with rigid opinions and those not adaptable to change, need to be dealt with. You need to improve yourself and imbibe in the minds of others that improvement is a continuous process. You should learn to celebrate the success of your team members and encourage them to work to the fullest of their capacities. You should be able to keep their spirits high and keep them motivated. It's human psychology to like getting noticed for one's work. It' a general tendency to expect recognition for one's work. One of the important business management skills is to be able to encourage your team members, extract the best from them and appreciate their efforts. Another managerial skill is to create and maintain an open atmosphere in the team. The team members should feel free to voice their concerns and always be made aware that their concerns are heard. There should be a proper hierarchy for communication within the organization. It is a good practice to assign relatively experienced employees as buddies for those newly joined so that the new recruits do not feel unheard. This way, everyone in the organization has a point of contact. Communicating in a way that everyone is on the same page is a skill every manager should have. That's essential for teamwork and thereby for business management in general.

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In the words of Henry Ford, Coming together is a beginning. Keeping together is progress. Working together is success. This is what teamwork means. Developing and maintaining a team spirit is indeed a management skill. You need to have excellent communication skills to be a good manager. Being able to convey your idea to people, and getting the work done from them, is a skill. Communication should be effective, be it internal or with external parties. You may need to exercise your communication skills not just when with interacting external with your for team, but also when communicating parties, example during business

negotiations or when addressing customer issues. That depends on your job responsibilities in the organization, but communication is integral to a managerial role. A business manager needs to be a good communicator. Foresight is important in business management. You need to be able to sense trouble ahead of time. You need to be prepared for it and plan accordingly. You need to think ahead of time to be ahead in the industry. An excellent example of a manager and business developer with foresight, was Steve Jobs. You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new, he said. He believed in anticipating customer needs in advance to be able to give them products they would start wanting. Management is about taking the right decisions at the right time and getting them implemented by the right people. Effective business management requires you to have certain basic skills. But perhaps, the most important thing you need to have is common sense. Efficiency and effectiveness were originally industrial engineering concepts that came of age in the early twentieth century. Management theorists like Frederick Taylor and Frank and Lillian Gilbreth designed time and motion studies primarily to improve efficiency. Work simplification efforts again focused primarily on questions like "How fast can we do this task?" Work

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simplification also led to terminology like streamlined processes and efficiency experts, but the emphasis was still on time and motion. The concept of effectiveness, which takes into consideration creating value and pleasing the customer, became popular in the United States in the early 1980s when Americans perceived Japanese products such as cars and electronics to offer greater value and quality. The words efficiency and effectiveness are often considered synonyms, along with terms like competency, productivity, and proficiency. However, in more formal management discussions, the words efficiency and effectiveness take on very different meanings. In the context of process reengineering, Lon Roberts (1994: 19) defines efficiency as "to the degree of economy with which the process consumes resourcesespecially time and money," while he distinguishes effectiveness as "how well the process actually accomplishes its intended purpose, here again from the customer's point of view." Another way to look at it is this: efficiency is doing things right, and effectiveness is doing the right things. For example, think of a company that was successfully making buggy whips as automobiles became the mode of transportation. Assume that the processes used to make buggy whips were perfect. The relationships of internal and external suppliers and customers were perfect. The suppliers and customers teamed together to make perfect buggy whips. The buggy whips were delivered on or ahead of schedule at the lowest possible cost. This company was very efficient. However, the company and its strategists were not very effective. The company was doing the wrong things efficiently. If they had been effective, they would have anticipated the impending changes and gotten into a different market. Let's consider a surgery example. A surgeon is very skilled, perhaps the best in the country. The impending job is to operate on the patient's left knee. However, the surgeon doesn't perform all the steps of the process

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leading up to the surgery. Someone else marks the right knee for surgery. However skilled this surgeon is, however fast he performs the surgery (i.e., however efficient he is), this process will not be effective. When the patient awakens from the surgery, he will not be a happy camper. And what about the HMO? Who will pay for a surgery performed on the wrong knee? Efficiency and Effectiveness can both improve speed, on-time delivery, and various other process baselines. A travel application which has six signatures (as opposed to two) causes the travel application process to be inefficient and ineffective. Many of the people who sign the application are not effective in their job because they waste their time on things that don't add value for any of the stakeholders. They are not doing the right things. They are also inefficient because they are participating in a process that takes too long and therefore costs too much. Eliminating some of the signatures would make the process (and the signers) more efficient and more effective. People who sign all those travel applications might justify it by saying, "These people have to be here anyway. It does not cost us anything extra for them to be signing the travel applications." There's something terribly wrong with that type of thinking! Measures of efficiency, effectiveness, and capability for rapid adaptation are of great interest to all stakeholders: process owners, internal and external customers and suppliers, and executives. Inefficient processes are costly in terms of dollars, waste, rework, delays, resource utilization, and so on. Ineffective processes are costly as well because they are not reliable. They don't do what they are supposed to do. Processes that are not capable of rapid adaptation (flexibility and innovation) are costly because they are not capable of rapidly responding to customers' needs in terms of customization and rapid decision making. The greatest risk is that stakeholder loyalty will diminish.

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In order to make processes more efficient, more effective, and more capable of rapid adaptations, people should ask themselves what, who, where, when, where, and how questions. Perhaps the first question about a process is, why do it at all? Many steps exist simply because of organizational inertia ("We have always done it that way"). The second question might be, why do we do it this way? Then you might consider questions like these: What is being done? What should be done? What can be done? When should it happen? and so forth. These questions, and the concepts of efficiency and effectiveness, apply to all processes, all jobs, all types of organizations, all industries. Some process efficiency measures are: 1. cycle time per unit, transaction, or labor cost; 2. queue time per unit, transaction, or process step; 3. resources (dollars, labor) expended per unit of output; 4. cost of poor quality per unit of output; 5. percent of time items were out of stock when needed; 6. percent on-time delivery; and 7. inventory turns. Some effectiveness measures are: 1. how well the output of the process meets the requirements of the end user or customer; 2. how well the output of the sub process meets the requirements of the next phase in the process (internal customers); and 3. how well the inputs from the external suppliers meet the requirements of the process.

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By contrast, measures of ineffectiveness include: 1. defective products; 2. customer complaints; 3. high warranty costs; 4. decreased market share; and 5. percent of activities that customers perceive to be non-value-added. Some measures of adaptability are: 1. the average time it takes to respond to special customer requests compared to routine requests; 2. the percent of time special customer requests are denied compared to the denial of routine requests; 3. the percent of special customer requests that have to be escalated to higher levels of management compared to the escalation of routine requests; and 4. the capability to respond to product changes versus process changes. Organizations should establish baselines for efficiency, effectiveness, and adaptability metrics. In other words, they should determine their current performance levels. Then they should benchmark best-in-class or worldclass organizations and set aggressive goals or targets for improvement. Finally, they should determine root causes of problems and eliminate them or minimize their impact. Generally, management and non-management employees have not had experience with the concepts and tools that will help them evaluate the processes which they own. In this case, training and opportunities to apply the concepts and tools should be provided.

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Examples of concepts and tools are: 1. statistical process control, which measures variability in a process; 2. trend charts, which measure performance over time; 3. pie charts, which depict measurements compared to each other; 4. process flow charts, which allow staff to quickly identify serial versus simultaneous processes. In addition to process concepts and tools, people should learn

interrelationship concepts such as team-work and communication as well as leadership skills in order to streamline relationships as well as processes and organizations. Efficiency and effectiveness are often considered synonyms, but they mean different things when applied to process management. Efficiency is doing things right, while effectiveness is doing the right things. A third related concept is adaptability, which is flexibility or the capability to respond fast. In some respects, it is this capability for an organization to reinvent itself that ensures its long-term survival and success. Organizational leaders can't comprehend the extent to which their organizations and processes are efficient, effective, and flexible unless they choose and use the right metrics. Of course, the results of those measurements should be fed back to the process owners so that they can improve the organization and the processes. This includes management processes as well as lower-level work processes. By their very nature, management processes can positively or negatively impact other work processes because they quite often deal with approvals (signature cycles) including requisitions for the purchase of essential equipment. Answers to who, what, where, when, and how questions can be used to determine if the work should be done at all, who should do it, where and when it should be done, and how the work should be done. If these

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questions are answered truthfully, many activities in a process will be eliminated because they do not add value. Sometimes, entire processes will be eliminated. Employees need to learn about and use various concepts and tools which will help them and their processes to be more efficient, effective, and flexible. For example, flow-charting the curriculum process mentioned above would have highlighted the need to replace serial sub-processes with subprocesses that were simultaneous and the need to eliminate duplications of effort and long waiting times. In addition, workers should learn interpersonal and leadership skills in order to be able to refine relationships as well as processes and organizations.

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THE PERFORMANCE REVIEWONLY PART OF AN ONGOING PROCESS In today's workplace, performance improvement and the role of performance management is an increasingly popular topic. Why the intense focus on performance management now? Business pressures are ever-increasing and organizations are now required to become even more effective and efficient, execute better on business strategy, and do more with less in order to remain competitive. While human resources professionals clearly understand the importance of optimal performance management, they often face significant internal obstacles. When someone mentions performance management or reviews at your organization, what is the typical response? Do employees and managers alike cringe? Do they avoid performance management related tasks? Do visions of tracking down incomplete appraisal forms come to mind? This can be changed. Forward thinking companies are taking steps to successfully address this negative view of performance management. They are implementing innovative solutions that ensure processes deliver real results and improve performance. The purpose of this guide is to provide concrete guidelines and practical steps that can be used to improve the performance management processes at your organization. In addition, a new class of automated performance management solutions has emerged to specifically address small- and medium-sized businesses. We conclude this guide with a few tips for selecting an automated performance management system to implement best practices across your company. Frequently when performance management is mentioned, people think of the employee performance appraisal or review. Performance management, however, involves so much more. Properly constructed appraisals should represent a summary of an ongoing, year-round dialogue. Focusing only on

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an

annual

appraisal

form

leads

to

misunderstanding

and

under

appreciation of the benefits of performance management. An effective performance management process enables managers to evaluate and measure individual performance and optimize productivity by: Aligning individual employee's day-to-day actions with strategic business objectives Providing visibility and clarifying accountability related to performance expectations Documenting individual performance to support compensation and career planning decisions Establishing focus for skill development and learning activity choices Creating documentation for legal purposes, to support decisions and reduce disputes Many of the practices that support performance also positively impact job satisfaction, employee retention and loyalty. Recommended practices include: Delivering regular relevant job feedback Setting and communicating clear performance expectations Linking performance to compensation clearly Identifying organizational career paths for employees Evaluating performance and delivering incentives in a fair and consistent manner Providing appropriate learning and development opportunities Recognizing and rewarding top performers.

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BENEFITS OF PERFORMANCE MANAGEMENT When effectively implemented, performance management best practices result in a wide range of benefits for employees, managers and companies. o Organization-wide o Supervisors / Managers o Employees o Savings o Time Savings o Clarification of Expectations o Accuracy o Reduced Conflicts o Improved Self-assessment o Accountability o Visible Accountability o Improved Performance o Productivity o Efficiency o Career Paths o Retention o Consistency o Job Satisfaction o Communication o Performance o Performance

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10 WAYS TO OPTIMIZE THE PERFORMANCE REVIEW PROCESS

1. Set Goals Effectively Goals are the basis of an effective process. There are two key elements to consider when developing goals. First, are goals written clearly and objectively? Second, are they directly contributing to the achievement of business strategy? An accepted framework to use to help write effective goals is the "SMART" goal: S - Specific M - Measurable A - Achievable/Attainable R - Results oriented/Realistic/Relevant T - Time bound.

2. Begin with Performance Planning Using established goals as a basis, performance planning sets the stage for the year by communicating objectives, and setting an actionable plan to guide the employee to successfully achieve goals. Performance planning, as with all other steps, is a collaborative process between the manager and employee, although there will always be some elements that are non-negotiable. Begin with the job description and identify major job expectations; expectations then can be clarified for each major area.

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3. Ensure an Ongoing Process As the following diagram illustrates, goal setting, performance planning, performance monitoring, feedback and coaching is ongoing and supports the creation of the performance appraisal, which in turn supports processes related to rewards, learning and development. Performance monitoring, feedback and coaching creates a separate feedback loop within the larger loop which should take place more often, allowing for necessary adjustments to performance planning as conditions dictate.

4. Improve Productivity Through Better Goal Management Regular goal tracking allows for the opportunity to provide feedback as needed, make adjustments to performance plans, tackle obstacles and prepare contingencies for missed deadlines. Without a mechanism to regularly track progress against goals, the ongoing, cyclical nature of the process falls apart. Goal progress discussions, along with all performance feedback, should be delivered with respect and should be objective and supportive. Specific examples provide clarity and help the employee focus on future improvements. It is crucial that the manager listens to the employee's perspective and incorporates the employee's observations into future plans the employee often experiences roadblocks the manager may not see.

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5. Gather Information From a Number of Sources Gathering performance information from a variety of sources increases objectivity and ensures all factors impacting performance are considered. This information should include objective data like sales reports, call records or deadline reports. Other valuable information includes: feedback from others, results of personal observation, documentation of ongoing dialogue, records of any external or environmental factors impacting performance. Many reviews also include an employee self-evaluation. Other documents that help define performance objectives include: past performance appraisals, current departmental and organizational objectives and documented standards related to career goals. In order to gather feedback from other employees, organizations will often use a 360 feedback process. Along with the completion of a selfassessment, selected peers, subordinates, and manager(s) are asked to contribute feedback around pre-identified areas. The feedback is based upon specifically identified skills or competencies and the final results are compared against the employee's self-assessment. This type of feedback increases self-awareness and in some cases is used to support the performance evaluation process.

6. Document, Document, Document Note taking must be consistent and include all significant occurrences, positive or negative. Documentation is important to support performance decisions, and notes should be written with the intent to share. In addition to documenting the details of an occurrence, any subsequent follow up should be detailed. The performance log is a record that the manager keeps for each employee and is a record of performance "events." The maintenance of a performance

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log serves a number of purposes. The manager can record successes or performance that requires improvement. When it comes time to complete the appraisal, the manager has a historical record of events and will not have to rely on recent memory. In addition, this documentation can be used to support performance decisions or ratings. But it also can be used as a reminder for the managerif the log has no recordings for a period of time, perhaps it is time to check in. If an employee does exceptionally well, or meets deadlines consistently, the log can be used as a reminder to provide recognition for a job well done. In addition, if a manager notices an area of deficiency, the log can serve as a reminder and a record of circumstances. The performance log can also act as a reminder for coaching i.e.: record of upcoming tasks, manager can make note to discuss with the employee to ensure he/she is prepared for the individual for a task ahead, and then follow up discussion can promote learning and continuous improvement.

7. Adequately Prepare and Train Your Managers Managing the performance of another individual is not an easy task and requires many skills. Training may be required to ensure managers feel adequately prepared to effectively complete all the tasks related to performance management. This is especially the case for newly promoted supervisors. Managers need to understand human behavior, how to motivate, how to develop, provide coaching and deal with conflict. To a great extent, managers must be observers and able to assess a situation, provide motivation and identify problems that interfere with performance. In addition, managers must understand that individuals at different levels of comfort, ability and experience with their jobs will require different levels of input, support and supervision. A manager who feels adequately prepared to provide and receive feedback, deliver a performance evaluation and

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conduct a performance evaluation meeting will be a major contributor to a successfully functioning process.

8. The Review The employee performance appraisal or review should be a summary of all that has been discussed. Based upon job expectations and key areas of contribution, and previously discussed goals and evaluation methods, the appraisal should be a written confirmation of what has already been discussed with the employee. The form should include key job responsibilities, current project work, relevant competencies, goals and achievements. Previously completed performance appraisals should be used as reference documents. It should also contain an area to allow employees to record their comment and input. All comments included on the appraisal form need to be job-related and based upon observable behaviors.

9. Link Performance Management With Rewards and Recognition More and more, organizations are linking performance to compensation. This link, however, cannot effectively be established without the existence of sound performance management processes that are seen as fair and equitable. Clear documentation of progress against performance expectations also allows proper recognition for a job well done. This can be provided a number of ways, i.e.: formal recognition events, informal public recognition or privately delivered feedback.

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It is important also to note the benefits of a consistent process across the organization. A consistent process creates a sense of fairness and significantly increases job satisfaction. This is even more critical if compensation is linked to performance. Employees need to know that if an individual in one department is identified as a top performer and compensated accordingly, then an employee performing at the same level in another department will receive similar rewards.

10. Evaluate and Encourage Full Participation and Success There is widespread recognition that an annual meeting to evaluate progress does not have the same benefits as ongoing dialogue and feedback. Feedback that is delivered when it is most relevant enhances learning and provides the opportunity to make necessary accommodations in order to meet objectives. Some organizations are moving towards conducting performance reviews twice a year, while a small portion is trying to conduct them more frequently. Regardless of frequency, the attitude towards ongoing feedback is crucial. If there is organizational recognition and support for the need to build constructive feedback into the fabric of day-to-day interactions combined with increased visibility into goals, then the environment will encourage development and drive goal-directed performance improvement. Design the process right. The performance management process must add value, otherwise problems with resistance and non-participation will surface. In addition, the process itself must be efficient and as simple as possible, while still providing the necessary value. Automated reminders and scheduling tools can help keep the process on track.

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THE NEXT ERA OF PERFORMANCE MANAGEMENT TO INCREASE BUSINESS EFFICIENCY AND EFFECTIVENESS More and more organizations are relying on innovative technology solutions to implement performance management best practices and automate painful manual processes. A move to web-based, on-demand technology is making these systems affordable, regardless of the size of an organization, with quick implementation schedules, no IT support requirements and automatic upgrades. An automated system can ensure that the performance management process is built around world-class best practices, easy to complete, efficient and consistent across an organization. Necessary visibility into organizational and departmental goals is simplified, as is access to necessary data to support accountability, consistent standards, (by viewing manager average ratings) and identification of top performers. In addition, technology enables companies, managers and employees to address many of the issues discussed. When selecting an automated performance management solution make sure to do your research. Some solutions offer nothing more than an electronic appraisal form while others offer complete best-of-breed goal management solutions. The best solutions offer: o instant form routing and paperless processes o goal tracking and cascading functionality for complete visibility and alignment o automated goal management and performance review reminders o legal scan wizards to ensure appropriate/legal use of language o writing assistants to help managers prepare appraisal forms o support tools providing coaching support to managers when they need it most

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o dashboards reporting.

to

deliver

company-wide,

aggregated

or

individual

It is especially important that technology provides us access to performance data and the ability to evaluate progress against goals, compare average manager ratings, easily access performance levels of individuals and use this data to support decision making. Aggregating and analyzing data in traditional paper-based forms is often too time-consuming and costly. The road to effective performance management is not always an easy one, but progressing towards a long-term vision by making manageable changes, step-by-step, will bring about significant results. The points below act as a reminder of some of the key elements of a successful process. o Communicate and understand purpose and value of process o Set goals effectively o Begin with performance planning o Ensure an ongoing process o Gather information from a number of sources o Document, document, document o Adequately prepare and train managers o Deliver objective reviews that summarize an ongoing process o Link performance management with other talent management processes o Evaluate the process and make it easy, efficient and effective to ensure participation o Consider the benefits of automation to save money and resources and optimize the performance management process.