A) Introduction: This paper will explain the relation of learning organization and performance management
B) General discussion:
1) Explaining the a method in performance management such as 360 degree performance evaluation, which is better from the traditional performance evaluation method because it reduced subjectivity
2) Describing how learning organization support the implementation of performance management
The concept of organizational learning invites people to understand that organization is a group of people who come together to accomplish a shared purpose. Organizational learning explores ways to design organizations so that they fulfill their function effectively in order to achieve the purpose. Therefore, a learning organization will help people within the organization to reach their full potential, and thus, help create a better organization as a whole. In this situation, the implementation of learning organization concept will help an organization to achieve better performance management.
The study intends to answer key question of whether learning organization concept help the organization to achieve excellent performance management. We will take into account organizational study, performance evaluation, and learning organization practice in a multinational company.
In this modern world, almost everything happens in organizations ranging from coping with the fast-changing business environment to managing human resources in order to sustain the organization’s business development. For decades, individuals within the organization make less achievement and more efforts are made to combine strengths in order to achieve common goals. This tendency grows stronger as people realize that there are more benefits in collective efforts than individualistic undertakings. Unlike people in the past, for modern people, the help of others is crucial in order to survive and to achieve each other’s dreams.
In line with this understanding, the science of managing and living inside organizations was unveiled. Because organizations are tools to achieve everyone’s goal, than a single problem within that organization is practically everyone’s problem. Thus, leaders of an organization can design strategies and methods to solve all types of problem that might appear within their organizations. They design systems in effort to maintain good motivation among members of organization and to ensure that everything is always in place to achieve collective goals (Castells, M, 2001).
As the urges of properly managing organization become increasingly crucial, experts discover there are actually numerous factors that influence the life and workings of an organization. Moreover, within the development of globalization and other groundbreaking concepts in the business world, the factors that influence organizations change and grow. This creates an endless field of work for organization leaders and all parties of interest, as they strive to maintain productivity of their organizations (Castells, M, 2001).
In respond of the apparent problem in the concept of organization, experts in the field uncover the secrets of creating a ‘learning organization’. A learning organization is a unit that posses a unique system thinking that allows it to solve even the most complicated problem as a group (Argyris, C., & Schön, D. 1978).
Concerning the issue, this paper will describe the essence within the concepts of organizational learning and its relation to performance management. In addition, this paper will also describe how this concepts influence organizations in their day-to-day challenges in order to achieve determined performances.
II. Performance Evaluation
Concerning the performance management, there are many methods that help manager to assess whether they have achieve the assigned performances. However, in general there are evidence that good implementation of learning organization concept will help an organization to reach desired performance.
Among performance evaluation methods that exist today, 360 degree performance evaluation is better from the traditional performance evaluation method because it reduces subjectivity. Unlike the traditional method where performance evaluation comes only from superiors, the 360 performance evaluation considers input from every group of individuals we work with, including bosses, partners, and customers. This would effectively increase the accuracy of performance evaluation method in order to search for or shape future leaders (‘Total Performance’, 2005).
III. Learning Organization and Performance Evaluation
III.1 Concept of Learning Organization
The concept of organizational learning brought people back to the understanding that organization is a group of people who came together to accomplish a purpose. Organizational learning explores ways to design organizations so that they fulfill their function effectively in order to achieve the purpose.
A learning organization will help people within the organization to reach their full potential, and thus, help create a better organization as a whole. It is a place where people continually expand their capacity to create the results they truly desire. Within this place expansive patterns of thinking are nurtured, collective aspiration is set free, and people are continually learning together to create a better organization (Argyris, 1978).
This can be achieved by providing information system that allows employees within the organization to share experience and knowledge in order to benefit others. This method is successfully performed by IBM in their learning organization method.
III.2 Learning Organization in Performance Management
The obvious challenge in the implementation of the organizational learning concept is getting every member of the organization to participate within the process. There are considerable discussions regarding the relationship of the organizational learning concept and performance management. Figure 1 shows how the implantation of learning organization concept helps the companies to reach better performances.
In simple words, the concept of organizational learning requires every member of the organization to share the same vision and goals. Thus, they will be able to see various problems within the same perspective and take lessons from the situations as a team rather than as separate individuals (Drucker, 1977).
Figure 1 Typical Implementation of Learning Organization Concept and Performance Management
The above figure shows that the use of performance management can helps the company to have feedback if the desired results are below expectation. The situation further will drive the whole organization to set up new method for the implementation of learning organization that is more suitable for the organization.
A successful integration between individuals to create a successful implementation of the organizational learning concept is marked with increasing value of the organization. An organization that has successfully implemented the organizational learning concept is worth a lot more than the sum of its parts and individuals within it (Drucker, 1977).
In order to implement the organizational learning concept, each individual within a learning organization must have corporate values, including vision and culture, within his/her frame of mind. This is important to ensure that members of the organization view matters in the same perspective. Thus, individuals within a learning organization must have certain qualities, like the ability to communicate with others and work in team efforts. These qualities can be obtained through certain activities, like dialogues, training programs, etc (Drucker, 1977).
III.3 Example of Learning Organization and Performance Management
Federal Express (FedEx) experienced slow business growth and small profit attained in 1975. Strict government rule bound the rapid development of FedEx for using larger aircrafts to deliver its cargos. FedEx top managements carried out several lobbies with governments to allow FedEx for using larger airplanes.
After several years of experiencing well-established business lines, FedEx becomes the leading company in cargo delivery industry. The phenomenal condition obtained by FedEx without any alignment with others companies. FedEx stands on its own foot to keep, maintain, and develop its delivery business by keeping its professional works.
On time delivery, widely range distance, lowest-price delivery, are several points of FedEx success on getting its customer satisfaction and loyalty. That is something obtained from experiences and never-ending learning process from the previous mistakes. Currently, FedEx become a network of companies that share a rich heritage of innovation and industry leadership. The situation marks that performance evaluation and information sharing become key success for organization that undergoes learning organization.
This paper has elaborated the essence of learning organizational concepts and its relation to performance management. In addition, this paper will also describe how this concepts influence organizations in their day-to-day challenges in order to achieve determined performances.
In order to provide comprehensive picture, we also provide a figurative example of how the implantation of learning organization concept helps the companies to reach better performances. The figure tells us that feedback system through performance evaluation becomes important part in the implementation of learning organization concept in order to improve performance.
In simple words, the concept of organizational learning requires every member of the organization to share the same vision and goals. Thus, they will be able to see various problems within the same perspective and take lessons from the situations as a team rather than as separate individuals
Argyris, C., & Schön, D. Organizational learning: A theory of action perspective. Reading, Mass: Addison Wesley, 1978
Castells, M. Information technology and global capitalism. in W. Hutton and A. Giddens (eds.) On the Edge. Living with global capitalism, London: Vintage
DeBare, Ilana. “360-Degrees of Evaluation More Companies Turning to Full-Circle Job Reviews.” 1997. Retrieved July 29, 2006 from http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1997/05/05/BU65200.DTL&type=printable
Drucker, P. Management, London: Pan, 1977
“Fedex Corporate History”. Fedex. Retrieved July 31, 2006 from http://www.fedex.com/us/about/today/history/