Many corporations around the world practice the ‘family’ type culture of Gypsy Tigers, whereby employees are not pressured to perform at very high levels – instead, moderate performance is accepted as the norm. From a performance management perspective, what are the advantages/disadvantages of such practices?
What will be an ideal response?
? An advantage of a paternalistic or family type culture is that employees and
supervisors feel confident and secure in a long-established relationship that can
maintain loyalty and group cohesion even through difficult circumstances.
Practices are ‘good enough’ in normal times, and when the external environment
changes such that new competition emerges, these types of firms may be able to
withstand increased demands and stresses more than firms that lack employee
loyalty. Familial environments often involve strong social pressures to perform
up to the expectations of the group without the need for expensive incentive
payments or costly oversight management and information systems. Finally,
because organisational performance often depends upon group performance,
maintaining a cohesive and loyal group of employees can often lead to greater
productivity than monitoring and trying to incentivise individuals.
? A disadvantage of these practices is that group pressures for conformity to the
moderate performance level can hold back both individual and organisational
performance. Professionalised management involving clearly defined roles and
expectations can enhance performance, by communicating clear standards,
providing information on performance against those standards, and rewarding
superb performance with pay. Professionalised performance management creates
criteria, expectations and incentives that enable superior individual and team
performance and can deliver superior results for the organisation.
? It would be ideal to combine the best features of both familial and professional
environments, but the trade-offs between the systems of management are often
difficult to hold together.
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