Organizational development (OD) is the area that is useful to assess the current state of a company to improve it. The role of OD consultants lies in collecting data, synthesizing it, and providing recommendations. This paper focuses on discussing performance management and the ways to introduce change. Two approaches to change implementation will be compared and contrasted in terms of understanding human behaviors and organizational operation.
Performance Management, Feedback, and Change Approaches
An OD consultant may prioritize performance management (PM) as it implies the creation of an environment that is useful for employees. It is focused on increasing the importance of supporting employees in meeting their stated goals. In addition, the PM system includes an annual performance review that means the discussion of employee performance. Considering that the given company has an adaptive culture, it is possible to apply a pay-for-performance system to encourage staff to show their skills and knowledge. The additional incentive that can be necessary is bonuses for both individual and group achievements.
The desire of employees to work better is always reflected in the overall operation of an organization. If people are motivated in terms of performance management, the company can adapt to changing external environment and also successfully meet employee diversity.
When data is collected and employees are notified of the upcoming change in terms of the first step, it is necessary to conduct training. This is important since proper education can eliminate many errors and explain to employees how exactly they are expected to act. Experiential training seems to be suitable as it allows staff to try new behaviors, receiving feedback from managers and the OD consultant.
Before introducing change, it is critical to make sure that all the employees understand their role and what skills should be applied in the future. Therefore, such pre-job training and performance feedback are two main components of the second step approach. In some cases, training fade-out may appear, which means that employees forgot their skills or failed to use them in practice. To prevent such situations, managerial support is needed: desired behaviors should be appropriately rewarded and stimulated.
There are various models and approaches that exist in the OD area. Lewin’s change model and McKinsey’s 7S model provide clear steps that can be used by managers and consultants. The model by Lewin has three elements: unfreezing, change, and refreezing, which were used by Nissan. The model by McKinsey includes strategy structure, systems, shared value, staff, style, and skills, and it was applied by the Japanese company Matsushita.
Likewise, Lewin, McKinsey offers a structured approach to integrating change in the everyday activities of an organization. The steps of both models are clear, thought-provoking, and interrelated. On the contrary to Lewin, McKinsey focuses not only on the practical change but also the emotional acceptance of employees. For some people in the company, the change may seem unnecessary or too difficult.
To conclude, performance management is considered by organizations as a framework to understand what can be improved. The OD should evaluate the performance of employees and also provide them with the necessary resources to fulfill the goals that were set. It is identified that performance feedback and the pay-for-performance system can significantly affect how staff views their jobs and change initiatives. Both McKinsey’s 7S model and Lewin’s change model are structured methods to implement change. The 7S model seems to be comprehensive yet more complicated compared to the other change model discussed in this paper.