Title: Performance management in Countrywide Credit Union Essay Example

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10Performance management

Title: Performance management in Countrywide Credit Union


Strategically, organizations often strive to design appropriate work systems to achieve its goals, absorb individuals with capabilities to perform design responsibilities effectively and motivate and reward employees to improve productivity. Performance evaluation is a control mechanism that not only portrays the feedback of people but also assesses how activities are carried on in the organization. Without correct performance information in all units, supervisors are more likely to guess the commitment of employees towards the desired goals of an organization (DelPo, 2005). This paper evaluates the performance management system of Countrywide Credit Union (Case) by focusing on the problems that leads to poor performance of other branches. Also, the paper will provide recommendations for managing performance in Countrywide Credit Union.

Problems with Countrywide’s performance appraisal process and how Kevin (the supervisor/manager) conducts the review

Kevin conducts performance of branch managers without using data-based assessment method. Apparently, this is a critical issue since information particularly on financial performance needs reliable data for effective decision making. For instance, Kevin asks two oral questions to the two assessed branch managers with no background data accompanying. Perhaps this may not describe the reality of performance in respective branches, however, it just give ‘fuzzy’ information for decision making process (Grote, 2002).

There is lack of accountability in Countrywide Credit Union performance management system. Not all the 27 branches in the state are performing well, that is a reality from the case. Customers’ satisfaction levels are poor meaning the returns on investment (in HRM specifically) is slow. As much as Kevin is not accountable for his responsibilities, even the branch managers on the other side are not solemn in performing their assigned task. For instance, Wayne is not sure if the branch is doing very well but he feels everything is okay. This displays a character of not being accountable to the job description and any other responsibilities within (Halachmi, 2002).

There is no comprehensive assessment of branch managers and their teams. A comprehensive assessment simultaneously evaluates a leader and his/her team. Kevin is not concern of the team but only on the leader. He interviewed the two managers without considering the strategies (Performance targets) set by workers at respective branches in achieving operational objectives. A comprehensive system is indispensible for strategic planning and research (market and sales research) (Lussier and Hendon, 2013). For instance, poor performance on some branches may necessitate external recruitment. However, Kevin does not seem to look intensively on this issue. He just focuses on the welfare of the branch manager without considering the performance of the teams.

Performance management system of Countrywide lacks legal support. Kevin executes the process unenthusiastically, and the result of this may not support disciplinary actions to those sitting on their responsibilities. Julia sees an obvious discrimination when it comes to performance review. Kevin walked out in the middle of the assessment between him and Julia. This reflects inappropriate handling of essential activities within the institution. Kevin and Wayne may be friends united by golf game but that does not mean they should hang out at golf club doing organization’s official business. Kevin is so reluctant in adhering to the principles and laws of the organization (for performance management in specific) and this may be the factor contributing of poor performance of other branches. According to DelPo (2005), a performance appraisal process manager should be powerful and having complete knowledge on performance and productivity. Kevin in this case is not that kind of a manager though.

Julia perceives the intentions of Kevin as a ‘System Gaming.’ Often managers insincerely rate employees either to save money or keep individuals unseen for promotions. Julia realized this from Kevin when he gave her a rating of 5* meaning a superior performance. According to Julia, the performance in his branch is not optimal at the same time, her performance perhaps may have accounted to a bonus of above 20%, which is expected for every branch manager.

Types of performance appraisal methods appropriate for Countrywide Credit Union branch managers

  1. Management By Objectives (MBO)

This is a new performance management method that suits organizations in the contemporary environment. From the case, it was recognized that sales in some branches were decreasing. This implies that were individuals assigned to perform sales activities were not up to what the organization’s needs (Goswami, 2013). This method requires both the manager and employees in the branch to agree on specific and attainable operational objectives. For example, if Countrywide Credit union is to achieve a 25% increase in sales after three months, then HR department should invest on the required capabilities to achieve these goals/objectives. Once this objective is set, everyone in the team is directed to it. Therefore, at end of three months success or failure is defined.

Advantages of using Management by Objectives

It is an accurate appraisal method: Once the objective is set, the team can either achieve or fail to achieve. Achieving the set objective means that leaders as well as employees integrated together are performing to the expected demands of the objective. On the other side when these set objectives are not achieved, it means that some responsibilities have not been covered and therefore individuals in the team are not performing to the expected standards.

It promotes effective management processes: MBO is a proactive method that focuses mainly on planning how to improve results not merely too much planning of activities. Branch managers will be able to think of how to balance the resources available to achieve set objectives efficiently and effectively. This will ensure that there is standard of control when it comes to investment through people leading to best management practices.

It provokes individual’s commitment for performance: Most of the employees are not compliant to the assigned responsibilities at Countrywide Credit Union. For example, customer review shows that they are not satisfied with the services they are offered by employees of the organization. Setting performance targets using MOB will point out those employees who are not complying with their responsibilities in achieving the set goals.

Disadvantages of using MOB

It assumes fixing of employees responsibilities: The objectives achieved are as a result of teamwork. This means that some the individual responsibilities are most likely covered up by the team making it difficult to rate the performance of respective individuals in achieving the objectives. An employee therefore can be compensated or blamed for either of the end result.

Time-consuming: harmonizing the objectives to be achieved may take a long protocol process. This is because of the resistance either from the team members (employees at branch level) or the highest demand of the set objectives that needs a huge financial support. Right decisions on what objectives to be perused will take longer time to be reached and therefore most of the employees will be making decisions to favour their abilities. This will therefore delay the processes in the union.

  1. 360-Degree feedback

The manager of the branch will get a complete profile of an employee when this method is used. Job performance by individuals as well as capabilities particularly on technical skills has been questionable in Countrywide Credit Union. Some of the staff lacks adequate training skills especially on financial departments. This is the most essential department that needs people who are committed to their assigned responsibilities. Customers are complaining on the services they are offered by staff at branch level and this method is fit to evaluate performance since it uses feedback that are directly linked to the behaviour and work capabilities of a staff (Rao and Rao, 2005).

Advantages of using 360-Degree Feedback

Reports of performance come from many sources: It will be difficult for an employee who is performing below the expected standards to deny criticism from different sources. For instance, poor customer satisfaction may be due to ignorance in public relation. Several people may suggest that an employee needs to improve communication skills. Apparently, this area will indeed need an improvement.

The method is designed with a customer attention in mind: Customers providing regular (after-service feedback) feedback on the services they receive would make employees be attentive and adhere to quality requirements of their jobs. The behaviours will change since every other time they offer a service, a response is made. This will manage the performance particularly for those employees working in sales and marketing department.

It forces employees to focus on the expectations of their job: Feedbacks from customers will make employees to work harder in their areas of work. Also, frequent feedback would mean that employees should make themselves good and also the organization.

Disadvantages of using 360 Degree Feedback

It is difficult to integrate reward system: The method does not focus on core competencies, bonus and promotion criteria. Therefore, it is difficult to recognize and measure the achievement of specific individual. For instance, politics may be used on deciding promotions thus leaving feedbacks with little impact on individuals’ performance. This may encourage discrimination within the organization.

The method is more subjective rather than objective: Individuals’ opinions are sometimes inaccurate and the actions associated with them may not be used to define business results. Therefore this may lead to misjudgement of employees’ ability in the organization.

  1. Work Standards

There is a need to set goals’ target against realistic ability of employees (output standards) in poor performing branches of Countrywide Credit Union. This will define the thin line between employee responsibilities and duties and they will work hard towards those defined obligations. The appraisal system of the company will be more objective as well as precise and every employee will be checked differently (Burgess, 1977).

Advantages of using Work Standards

It has a consistent framework: This method assesses each employee based on similar criteria created by HRM. This will help employee to fully understand whatever they are needed to do in order to achieve high score during evaluation. When Countrywide Credit Union uses the same criteria over time, employees will focus on the component of the metrics used during evaluation and increase their worth towards evaluation process.

It has defined objective: The use of free-form evaluations would allow branch managers to eliminate the impact of personal feeling on performance since there is ever-present goal in performance review. Managers will therefore judge each employee on the same criteria at the same time keeping evaluation scores for future evidence.

Disadvantages of using work standard method

It lacks customization: Work standard method is hardly adaptable especially with organizations having diverse operations. Using this method may lead to assessing employee with an irrelevant framework. For instance, employees working in front offices may likely to score low ratings compared to those working in marketing since the nature of job is different but the evaluation criteria is similar.

There is limited collaboration: Employees may not have freedom in choosing goals they have a hand in setting. However, they end up perusing set goals limiting the possibility of exploring their potential. At the end of the day poor performance may be as a result of standardized goals/objectives.

All employees of Countrywide Credit Union will be placed in a group, in order of rank basing on the overall performance. This will enable managers at branches to compare the performance of each employee relative to any other employee in the same group (Burgess, 1977).

Advantages of using Ranking Method

It improves productivity as well as profitability: Ranking method removes poor performers and retains those who are ranked as top performers. Whoever retained is rewarded and developed in order to improve productivity and profitability of the company. Apparently, managers would find it difficult to run an organization with low-performing individuals and higher levels may not be achieved at all.

Top performers are easily and quickly identified: Offering rewards and compensation has been a critical issue in Countrywide Credit Union. Using this method will easily identify top performers and reward them accordingly. The business on the other side will quickly realize the growth towards the set objectives thus achieving aggressive corporate goals would be easy.

Disadvantages of using Ranking Method

Ranking method creates competition within employees making teamwork less effective. This may create counterproductive situations where employees may be discriminated when it comes to development and training. Therefore, on obstacle of creativity is created especially when unethical behaviour is encouraged.

Poor self-esteem: Ranking may not give employees and any allowance for improvement therefore they become less motivated. It also leads to high turnover since employees are cracked annually with a cost associated. Over time, ranking may lose the effectiveness since everyone in the organization will be high performer and it will be difficult to identify low performers.


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