Performance Management System Case Study

Case Summery
SIKA is a specialist chemical company which manufactures and supplies different types of
products for building and motor vehicle industry. The headquarters of SIKA is in Switzerland but
it has acquired a number of companies in different sites of UK within the sector .

The Performance Management System is different in different companies acquired by SIKA. The
acquired companies uses their previous Performance Management System’s functions and
structure led by line managers once in a year . The Company (SIKA) used PMS for a range of
functions like – Capability assessment ,expectations of outputs, facilitating both employees and
the organizations, Assessment of potentials.

This PM System has resulted some problems in the companies like workload, confusion over
ownership, lengthy process of performance management. These issues proves that the present
Performance Management System is not correct for the organization. Rather this is a problem
for the organization .We have to find out the causes of problem so that the difficulties that have
raised for the Present PM system can be solved, which will also help to improve the
performances of employees.

Causes of Problems in Existing Performance Management System

Performance management is a continuous process of identifying, measuring, and developing
the performance of individuals and teams and aligning performance with the strategic goals of
the organization.

From above perspective , we can say that the main problem is the existing PM Systems and
there are some causes for the problem or effect . We are mentioning these causes below

 Communication
 Managers Capability
 Not a Continuous Process
 Different Culture
  Development of employees

We are going to use the Fishbone Diagram to Identify those causes for which PM System has
become a problem.

Communication Managers Capability Not a Continuous

Process

Information root Lack of proper Follow End year

was not clear knowledge review
Lead Full
Different guidelines at Mention in the
Conversation
different sites guidelines
Discuss only work Work Pressure
Lengthy paper
related topic
work of review
Tough Guidelines for
Staff Lack of Performance
resources
Management
System
Could not identify proper
Acquired Companies Problems of employees
structure
Different system of grading at
Companies Location different sites

Lack of training Facilities

Not Aligning with the goals Could not measure the
of company problems

Different Culture Development of Employees

Figure – Fishbone Diagram

Analysis of these causes
Communication
Communication is one of the biggest cause for arising problem in the PM system. The present
PM system’s communication method is not good enough to improve the performance of the
employees. There are some sub causes that is hampering the PM system. These Are-

 Information root was not clear – Line Manager collect the information from the
employees at the end of the year. Employees may not give accurate information for the
work pressures of ending year . More ever line manager may have to collect many
information for his work and this may lead confusion over the root of information. This
may create problem in communication
 Different guidelines at different sites- SIKA has acquired different companies at
different sites . These companies inherited different guidelines from their previous
companies . These different guidelines may create communication problem among the
Line managers , Staffs and HR managers of SIKA.
 Discuss only work related topic- In present PM System the workers can discuss only
work related topics with the line managers. Which creates a communication gap
between the employees and Line managers. Employees can not express their opinion or
any personal problem with the Line managers. This can demotivate the employees
towards their work.
 Tough Guidelines for Staff – The Guidelines of the Companies are tough for the staff to
understand and communicate as there are different guidelines . Employees may become
confused about their work issues, but there is no scope to consult their problem with
the managers.

Managers Capability
 Lack of proper Knowledge about leadership – In the present PM System, Line Managers
doesn’t have proper knowledge about leadership. They only perform their duties. They
don’t interact with the employees to lead them in a proper way.
 Lead full conversation- In present PM System, managers are not capable to lead a full
conversation with the employees. They only go through conversation at the end of the
year. Sometimes it is not a full conversation and inconsistent .
  Work Pressure – Line managers have to manage multiple members of staff, others
duties at the end of the year. Which makes them unable to give full attention at the
performance review of employees. So Managers become incompetent to review the
performance of the employees accurately . They use the information in many processes
and become confused about the ownership of the Information.

Not a Continuous Process

The present PM System of SIKA Doesn’t follow the rules of Continuous process. But a
Performance Management System must have to be a continuous Process. There are some
reasons why this PM system is not a continuous process.

 Follow End year review – SIKA review the performance of the employees only one time
in a year. But review system should be a continuous process to bring out the best
outcomes of the employees.
 Mention in the guidelines – The present PM system doesn’t follow the continuous
process may be because of the guidelines and structure of the company. If the
guidelines doesn’t mention about the continuous process of performance review , the
line managers are unable to review the performance continuously.
 Lengthy paper work of review – The line managers may be reluctant to review the
performance of the employees because of the lengthy paper work of review the
performance. It may hamper their other duties of line managers.
 Lack of resources – If the PM system is a continuous process , it have to identify,
measure and develop the performance of the employees continuously. The Company
(SIKA) may have not enough resources to review the performance management more
than one time. May be That’s why the present PM system is not a continuous process.

Different Culture
Different culture is one of the biggest causes of problems in present PM System of SIKA as the
headquarters of SIKA is in Switzerland and it acquires companies in UK. The acquired companies
of SIKA has resulted multiple cultures in the company. The Sub causes of these multiple culture
are given below
  Acquired Companies structure –The Structures of different acquired companies are
different. The role and work structures of the top Managers, line managers, employees
varies from company to company, which creates a different cultures in the acquired
companies.
 Companies Location – SIKA has acquired companies from different location. Which can
also a cause of different culture in the organization . Because location or place is an
important factor of culture. People of different places follow different cultures, which
also affects the cultures of any organization located in different areas. So different
locations can be a major cause to change in the culture.
 Not Aligning with the Strategic goals of SIKA – The Acquired companies strategic goals
are not aligned with the Strategic goals of SIKA. Because the acquired companies have
individuals procedures and process. This resulted that all the acquired companies of
SIKA doesn’t follow the same goals. But the Strategic goals of all the acquired companies
should be as same as SIKA. This also results different culture in different companies.

Development of Employees
Development the performance of the employees is an most important factor of Performance
Management System. It helps to improve the performance of the employees. In SIKA , there is
no proper system of developing the employees. The sub causes for not developing the
employees properly are given below-

 Could not identify proper Problems of employees – the line managers review the
performance of employees only once in a year. Which is not sufficient to identify the
performance problems of the employees properly. This can lead to continuous error in
the performance of the employees. If line manager could not identify the problems in
performance ,he will not be able to take any step to develop the employees
performance.
 Different system of grading at different sites – The grading systems of employees varies
from different sites to sites in the acquired companies of SIKA. Line managers use tick-
box marking of one of three or four performance grades, depending on site. It gives
different types of grading results to the employees, which may distinguish the final
evaluation. From this result HR manager may select wrong people for their performance
development.
 Could not measure the problems – As the grading System is different from sites to sites,
measuring the problems of the employees become difficult. Measuring is the important
 steps to develop the performance of the employees. In SIKA they don’t measure the
problems accurately.
 Lack of training Facilities – In SIKA , there is lacking of training facilities for the
employees and line managers. Line managers are not well trained to lead full
conversations with the employees. This also hamper the development process of the
employees. If the line managers are not well trained , they will be unable to
communicate with the employees and develop the performance of the employees. So
we can say that training facilities is the cause of not developing the performance of the
employees properly.

Solution of the Causes of Problems In Present PM System

To solve the problems of the Present PM System , the new PM System must
have to be developed with following strategy-

o The organization should focus on simplification and convert to a one page recording
document.

o Staff should be chosen according to a balance of sales, operations, production and

customer service staff etc.
o Guidance must be published in simple, easy to understand, language, communicated
clearly by senior management.
o A leadership program must be developed aimed at equipping line managers with
coaching skills to help them engage employees in dialogue.
o The chosen staff should used as champions to promote the new system and assist other
staff and managers.
o Aligning the strategic goals of acquired companies with the strategic goals of SIKA
The main features of this new Performance Management system can be these:
o The new PM process must be initiated and led by the employee, rather than by the line
manager, and, importantly, can take place at any time of the year that’s indicate regular
conversation.
o The previous five-page form must be replaced with a single-page document.
o Ownership of document should be transfer from line manager to the employee. So no
one has to fill more than one form.
o Documents should uploaded to the company’s HRIS, so that manager can use the
information to identify the needs of employees.
o It helps to review the performance of each employees and provide feedback
continuously.

If the company follows this new PM system, the result will help to solve the
problem of previous system. Described below:
o Communication: Communication will be improved, because conversation will done in a
regular basis, where employees can talking about what’s important to them. previously
they were asking questions that were formed around a set of prescribed criteria but
now they can be opening up and sharing information that is unscripted and relevant at
the time it’s shared which is allowing managers to take action and provide support in
real time.
o Manager’s capability: Single page document system can reduce the pressure on
managers holding multiple reviews at an already-busy times of year. And also
employees can take the ownership of the document than the manager. On the other
hand coaching skill of line manager will be improved. All these things indicate that line
management capability will be improved.
o Being a continuous process: Any issues or concerns with performance, capability or
conduct will be challenged as and when they arise instead of being left until the end of
the year to be raised during ‘appraisals’. Here proper guidance will also be published.
End year review is replaced by regular conversation. So we can say that it will be a
continuous process.
o Cultural issues: The way the organization will be organized, now in the UK, they can be
trying to get closer and will have complete harmonization across sites.
 o Development of employees: In new PM System, the number of conversation taking
place between line manager and employees will be increased and more employees will
slowly felt engaged and valued by these conversation. They can share their opinion in
the discussion. Providing HRIS related training to the employees will be helpful to
overcome the technological barriers. The continuous feedback from line manager will
helps the employees to solve their problem.

Conclusion
At end of the discussion, we can say that there are many causes for the problems creating in
the present Performance Management System. These causes becomes barrier for the overall
outcomes of the SIKA. They must have to change the Performance Management System. If SIKA
change their Performance Management System they must change the system according to the
above solutions. The New Performance Management System will help the Organization to
overcomes the barriers of present Performance Management Systems and the overall
outcomes of SIKA.