This chapter introduces the background, statement of the problem, research purposes, and research questions, significance of the study and definitions of the terms. The background describes the imperative of research on the development of a model for performance improvement and the Taiwan-based Original Design Manufacturer (ODM) producing laptops, servers and mobile devices which was discussed as a case in this study. The problems of the existed studies about performance improvement and the significance of this study are both discussed in the following description. Moreover, the research purposes and questions are also addressed. The last but not the least, key terms of this study are defined.
Background of Study
To survive and compete successfully in today’s turbulent economic environment, organizations require employees to be proactive, show initiative while engaging with their role and remain committed to performing at high standards (Bakker and Leiter, 2010). The reason I chose to address performance and to develop a model to improve it, from a strategic perspective is the fact that the management of organization must have a vision of efficient use of human resources. “Performance management”, has been defined as “a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors”
(Armstrong, 1998, p. 7). A firm’s competitiveness depends on its capacity to manage performance and improve the development of the skills and competencies of employees (Adhikari, 2010). More and more companies or organizations by these days put more emphasis on the performance management, since it is highly related to the competiveness of the companies or organizations. Rarely until recently was it realized that a firm’s human resources and human capital are sources of competitive advantage (Huselid et al., 1997).
In human resource activities, performance appraisal plays an important role in the process.
Performance appraisal reveals the gap between the expected goals and the recent progress, which will provides the resources for performance improvement. At the same time, it offers the input for employee development and the validation of selection. Although the exiting studies already
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show the dissimilar points of views, there is still missing the discussion about the process of performance improvement. Performance improvement has been an important part of performance management after finding out the performances gaps from performance appraisal.
According to ASTD (American Society for Training & Development) Models for Human Performance Improvement (HPI) that Rothwell (2000) published, there are six steps included in the human performance improvement process, and the whole process is seen as change management, this model is shown in Chapter 2 Literature Review in this study and there are more detailed discussions. What is missing in the ASTD model for HPI is that it doesn’t show the evaluation of the results, but the plan-do-review-revise cycle (Atkinson, 2012) filled the gap of the evaluation results by continuously learning, which made up for the shortage from the ASTD HPI model.
In Taiwan, the ODM (Original Design Manufacturing) industry has been growing after year 2000; ODM provides the service with the concept of design, including industrial design and mechanism design. ODMs have grown in size in recent years and many are now sufficient in size to handle production for multiple clients, often providing a large portion of overall production. A primary attribute of this business model is that the ODM owns and/or designs in-house the products that are branded by the buying firm. Since the majority of the ODMs in Taiwan focuses on the electronic information products, this study collects information from one of the biggest Taiwan-based ODM consumer electronics companies.
This case-study consumer electronics Company is a Taiwan-based ODM producing laptops, servers and mobile devices. This company has major development and manufacturing facilities in China, and is one of China's largest exporters. The company opened its development center in China and its first manufacturing facility in Shanghai. In addition, the company has configuration and service centers in the United States, Europe and Mexico. The company has a work force of over 57,000 employees, including over 8,000 engineers.
This study aimed to develop a comprehensive model for performance improvement that includes the performance improvement process and the strategies for improving performance. By analyzing the data, this study will find out the relations between the background of employees before joining the company and their performance after they were hired, and the factors that can affect their in-service performance. In addition, this study will also show how the process of developing the learning map for performance improvement is.
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Statement of the Problem
Many of the studies approach only the organizational performance (Koning, 2004), but for instance 98% of the subjects of a study consisting in executive managers of average and big companies have stated that improved performance of the employees would lead to an increased performance of the company. Numerous studies and statistical indicators (Campbell et al, 1998;
Chen & Kuo, 2004) also demonstrates that the success and competitiveness of organizations depend largely on the professional performance of employees, and the ways to improve it should become a pressing and permanent concern, in a competitive market. Employees’ performance improvement can be seen as the element of the competitiveness of the organizations, but the existed study didn’t address too much on the process of performance improvement, or the comprehensive strategies for performance improvement.
In the past years, there were several studies mentioned the linkages between performance management and human resource functions. Singh, Sharma and Cheema (2011) stated in their research that performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. In the same study, they also put the emphasis on the linkage between the selection validation and performance appraisal that performance appraisal helps the supervisors to understand the validity and importance of the selection procedure. Even though the studies already provided the sketch of the relation between performance management and recruitment & selection, there is still missing the detailed knowledge about how the academic and professional background is related to employees’
performance and how the human resources area in companies can optimize their selection processes based on that information.
The problems found in the existed studies are the basis of the framework for this study, and also provide the root for the questions of this study.
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Purpose of the study
This study attempted to understand the relations between the background of the workers before coming in to the company and their performance after they were hired. Develop a model for performance improvement by following the performance improvement process and identify the factors that can affect the performance, and then provide the countermeasures for improving the performance. It tries to provide a comprehensive model that can be applied to the in-house human resource management, especially in the recruitment & selection function and performance management. To better develop the model for performance improvement, this study will identify the factors affecting the performance by analyzing the performance data collected from the Taiwan-based ODM case used in this study, and then comes up with performance improvement plans that would be discussed. With the data collected from this case and interviews conducted, the framework would be provided in the following research content.
Questions of the Study
On the basis of the research purpose mentioned above, this study aims to answer the questions below after the development of the model for performance improvement:
1. Do the employees’ educational levels, the IQ test results and English proficiency test results that they took when applying for the job positions, affect the employees’
performance after they were hired?
2. How can employees’ previous performance in schools affect their performance at work?
3. How can the orientation training for the employee affect their performance at work?
4. How can on-the-job training that the employees received affect their performance at work?
5. How can the organizational communication affect the employees’ performance at work?
6. How can the performance appraisal affect the employees’ performance at work?
7. How can the company improve the employees’ performance?
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Significance of the Study
This paper aims to explore the linkage between recruitment & selection and performance management, and then develop a model for performance management. Since recruitment and selection process is fundamental to performance management, and performance appraisal can show the employees are capable of performing the position's tasks and responsibilities. If we can find out the relations between the background information of the employees and their performance in the company, and track back to the training and experiences in the company to see what the factors affecting the performance are, in this case the human resource department, especially the recruitment & selection or staffing department, can be more effective in choosing the appropriate candidates for the positions. For the human resource development department, they could design different and more effective training for the employees. Furthermore, the findings from this study can give the HR practitioners a clearer picture when dealing with employees’ performance in not only human resource management area but also human resource development, to increase the effectiveness of performance improvement.
Delimitations and Limitations
This study focused on the employees’ performance in ODM industry in Taiwan, especially this study is case study from a consumer electronics company. Therefore, the research delimitations and limitations were as below.
Firstly, this study was delimitated to ODM industry in Taiwan and was a case study from a consumer electronics company, this research might have potential limitations to apply to other industries and other specific companies.
Secondly, this study is case study research from a Taiwan-based company. The research findings might be limited to Taiwanese experience. Furthermore, subjects of this research do not represent the general scenario of the performance management process in Taiwan.
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Definition of Terms
In order to have deeper understanding of the terms used in this study, key terms are being clarified as followings.
IQ Test
In this study, the IQ test indicated to the IQ test taken in the recruitment & selection process in this case, a consumer electronics company. There are totally 40 questions in this IQ test, and the full scores for the IQ test are 100.
English Proficiency Test
In this study, the English proficiency test indicated to the English exam taken in the recruitment & selection process in this case, a consumer electronics company. It is very similar to TOEIC (Test of English for International Communication), including listening test and reading test. The full scores are 990.
Orientation Training
Orientation training is the training designed for the new employees to adapt into the new organization. Schwarz and Weslowski (1995) stated that there should be three dimensions for the content of orientation training: organizational information, department-level information and all kinds of other questions. In this case study, the orientation training included the introduction of the company and all kinds of regulations, and some activities designed for understanding the organizational culture.
On-the-Job Training
In this research, on-the-job training included internal training and external training. Internal training consisted of technical training courses, soft-skills training courses and language training courses.
In-service Performance
In-service performance indicated to the employees’ performance when they were working in the company.
Organizational Communication
Organizational communication means the communication in the organization, including the communication with supervisors or managers and the communication with colleagues.
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Performance Appraisal
Performance appraisal is a formal structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee organization and society all benefit (Singh, Sharma & Cheema, 2011).
Performance Improvement
Performance improvement is a systematic process of discovering and analyzing important performance gaps, planning for future improvements in employees’ performance, designing and developing cost-effective and ethically justifiable interventions to close performance gaps, implementing the interventions, and evaluating the financial and non-financial results.
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