SYNERGY THROUGH PERFORMANCE MANAGEMENT

We inhale oxygen and give out carbon di oxide, the plants use carbon di oxide and give out oxygen – we both exist in some sort of synergy that is in a way beautiful.

Synergy is something that has come to be increasingly appreciated in the world of business these days. Take for instance a manufacturing plant that takes in a few raw materials and produces a specific product, there are bound to be by-products of this process that can be tapped and used in other plants,  locally or remotely located. Such synergy is not all ways feasible, but smart businessmen find ways to make these happen and reduce the overall cost of raw materials and resources consumed.

Coming to the way departments function in an organization, where there is continuous interaction among entities and continuous give and take, it becomes all the more important that there is synergy in the relationship. If for instance, finance and HR departments have no pipe connecting them, then it is hard to channelize the performance of individual departments towards a specific goal. Herein the role of a performance management system becomes very important, a smartly designed PMS, run efficiently and sincerely can succeed more often than not in creating synergy.

For example lets take the case of a major business house in India that has successfully channelized the performance of its departments by using very prudently its performance management system.

Each department has two different performance aspects

1. The functional aspect
2. The synergy aspect

Under the functional aspect – which gets the maximum weight-age, the department is expected to achieve certain targets for the year in terms of performance. These targets are meant to be exhaustive and complete in every manner.

The synergy aspect – has a smaller weight age, here each department gets a few targets from the other departments. For instance finance would ask HR to cut its cost by 5% and this would become a synergy aspect target for HR. Similarly HR may ask other departments to provide availability for certain number of man-days for training purposes. This way departments outsource some of their functional aspect targets to the synergy aspect of other departments.

At the individual level, the targets are again functional, synergy related and in addition there is certain weight-age given for extra projects undertaken. Every individual carries out the functional aspect as it is his/her basic duty. The synergy aspect is driven by the department heads as they owe it to their counterparts, and so it is the extra projects undertaken that distinguishes the achievers from the bare performers.

Instead of having interacting departments rate each other at the end of the year (which only leads to bad blood) the above manner of setting goals for each other in the beginning of the year is a more constructive proposition. It is also very healthy since it is a part of functional aspect that gets outsourced as synergy aspect to other departments, the goals are credible, feasible and very pertinently directed.

Advertisement