HIGH PERFORMANCE WORKING AND PERFORMANCE MANAGEMENT IN LI-NING COMPANY

Table of Contents
HIGH PERFORMANCE WORKING AND PERFORMANCE MANAGEMENT IN LI-NING COMPANY..................................................................................................................................... 1 1. 2. Introduction ............................................................................................................................. 3 Conceptual Frame Work .......................................................................................................... 4 2.1. Six-box model .................................................................................................................. 4

Purpose .................................................................................................................................... 4 Structure................................................................................................................................... 5 Rewards ................................................................................................................................... 5 Helpful Mechanism ................................................................................................................. 5 Relationships ........................................................................................................................... 5 2.2. Cultural context of Performance Management ................................................................ 6

Power Distance ........................................................................................................................ 6 Individualism Vs Collectivism ................................................................................................ 6 2.3. 3. Contribution of Line Managers ........................................................................................ 7

Approaches to improving performance management .............................................................. 8 3.1. Steps to improving Performance Management (PM) and High Performance Working (HPW) in Li-Ning Company ....................................................................................................... 9

4.

Recommendation ................................................................................................................... 13 4.1. Applying Motivating Theory Maslow......................................................................... 14

5. 6.

Conclusion ............................................................................................................................. 15 Reference ............................................................................................................................... 16

1. Introduction
Armstrong and Baron (1998) defined Performance Management (PM) as a strategic and integrated approach to increasing the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors. This indicates that Performance Management is not achieved without focusing on the performances of the organizational areas such as department, employee, or the act of producing a product or rendering a service. The company in this academic discussion is Li-Ning Company Limited. Its one of the leading sports brands in China, with the excellent capabilities on various aspects, like brand marketing, R&D, design, manufacturing, distribution and retail. As the leading sports brand in China, LiNing Company Ltd. provides professional products for athletes and amateurs alike all over the world, including footwear, apparel, accessories and equipments for sport and leisure uses, for the sake of being a worldwide leading sports brand in the near future. In China, Li Ning ranks third in sales among sportswear companies, behind Nike and Adidas. Despite Li-Nings success over the interval of 22years in the Chinese market, Li -Ning faced a performance decline in 2011 Performance Report when is sales revenue of 8.929 billion Yuan, which was previously 9.479 billion Yuan in 2010 sales, fell by 5.8% inventories of large and other factors, net income sharply decreased by 65.16%, reaching 386 million Yuan. Mr. Li hired his own staff of 20 to design a new image for Li-Ning aimed at attaining their short term goal of emerging into the United States market adapting to Eastern culture that understands nature, balance and a mind and body connection (Liu Jie, 2012). Unfortunately, employing new staffs alone is not a solution in attaining a good performance. When company such as Li-Ning faces a decline in performance, it does not necessarily mean that the company is doing a bad job all along but what matters is how the company can motivate and encourage their employees to work effectively in achieving those strategic objectives which they are trying to attain.

2. Conceptual Frame Work

2.1. Six-box model

The six-box model is a generic framework and is intended for use across a wide variety of organizations. It is based mainly on the techniques and assumptions of the field of organizational development. Fig 2-1: The six-box model- A diagnostic tool cited by Marvin Weisbord, (1976)

Purposes

Relationships Leadership

Structure

Helpful Mechanism

Rewards

The model represents a particular way of looking at Li-Ning organizational structure and design. It gives attention to issues such as planning, incentives and rewards, the role of support functions such as personnel, internal competitions among organizational units, standards for remuneration, partnerships, hierarchies and the delegation of authority, organizational control, accountability and performance assessment. The model also follows the basic 'systems' approach to organizational functioning including the well-known inputs and 'outputs' categories.
Purpose

Li-Ning is a popular brand of sportswear and equipments in China. Li-Ning was found in 1980 and after exploration for 20years, it gradually became an international famous sport brand representing China. It has a well-penetrated brand associated with the founder, a man of legend

and Chinese national pride. Li-Nings Mission statement is to use sports to inspire people, the desire and power to make breakthroughs and make potentials. It has a Vision Statement of creating and providing quality sporting goods for people pursuing a healthy lifestyle and enjoying sports. With maximum awareness of its reputation, Li-Nings Core Value is the passionate pursuit of excellence, professionalism and innovation.
Structure

Li-Ning operates in a Tall structure organization with a decentralized hierarchy where major decision and control is made by the manager. Li-Ning has a strong distribution network covering most of the remote Chinese cities as employees work according to instructions passed down to them.
Rewards

To a large extent employee motivation and reward are the key drivers that strengthen the performance of a company. Li-Ning salary & compensation reviews include all signing and yearend bonuses, vacation time and other perks and reimbursements that make up total compensation. This being met accordingly motivates the employees to create key competences for themselves along with achieving organizational goals.
Helpful Mechanism

Due to technological improvements in footwear over the years, it has become an increasingly important product category. The quality of Li-Nings products is similar to its western competitors. Technological innovations are important since customers would like to have the best to excel at their sports.
Relationships

Li-Ning ensures that there is a good relationship between their customers and their brand since customers with high level of brand loyalty will interact actively with the brand and will be willing to share their experiences with others.

2.2.

Cultural context of Performance Management

Writers have suggested that it is cultural differences which make it difficult to standardize aspects of performance management practice and a number of studies has sort to examine the impact of country culture on aspects of the performance management process. This will be critically looked into using Hofstede G. (2001) cultural dimensions as follows:
Power Distance

Li-Ning is a China brand and its far success is in China. China has a high Power distance measure. Therefore, there is more power to a manager in the sense that work is directly passed down to employees without their contribution or opinions on it. Since inequality exists in this field, Managers barely have a relationship with their employees only on professional basis. This has a disadvantage because when employees are withdrawn from contributing in decision making, they get less motivated and mentally tired since they only carry out what they are told thus affecting organizational performance.
Individualism Vs Collectivism

China has a high percent of collectivism. They believe and value work done as a group or team. In this sense, Li-Ning employees provide a source of competitive advantage, enabling cost reduction and improved quality facilitating the completion of increased organizational task beyond the means of any one individual.

2.3.

Contribution of Line Managers

The line manager is in a unique position to reinforce learning from management training or other forms of development, by integrating them into an employees working life and promoting a positive approach to these types of activities (Gibb S, 2003). The role of the first line manager is arguably one of the most important tasks in any organization. Gaining the commitment of front line staff, meeting the needs of customers and middle/senior managers at the same time is pivotal if the organization is to achieve success. Any company that neglects or fails to appreciate the role of a line manager is on its own heading to failure. For Li-Ning to improve its High performance working, the line managers must; o Devote time, liveliness and passion in their employees development. o Exhibit public commitment to management training and development by living an exemplary work life. o Authorize the tarnishing of any obstacle or blocking that affects performance from employees in reference to their learning and development skills. o Be clear with their teams the importance of management training and development in raising standards and performance. o Recognize and compliment successes.

3.

Approaches to improving performance management

The performance management cycle has 5 elements which suggest how performance management system in Li-Ning should be implemented. The elements of PMS cycle include setting objectives, measuring the performance, feedback of performance results, reward system based on performance outcomes, and amendments to objectives and activities. (Mabey et al, 2001). Fig 3-1: Performance Management Cycle
Measurement of performance Feedback and result Setting Objectives Rewards (based on outcomes) Amendment to Objectives and activities

Setting objectives makes Li-Ning know what they are aiming for. While they are working towards that objective, they need to measure the performance. Setting objectives is not enough on its own. There has to be some agreement and understanding of how performance is to be measured. This could be done by analyzing the speed at which a work is done, the number of employees involved in a job together with their skills and commitment to their job. A change in the organization without feedback is voider than any other. Li-Ning must get adequate and necessary feedback from inside and outside the workplace that shows the extent of productivity the employee and managers hard work have gotten. If the feedback is positive, employees must be rewarded in other to be motivated to do more. However, if feedback yield negative results, it is still vital that the employees are not threatened but still motivated and inspired to put more effort. There are two theories underlying the concept of performance management: the goal-setting theory and expectancy theory. Using the Goal-setting theory, Li-Ning must ensure that individual
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goals are established by employees which in turn play an important role in motivating them for superior performance. In other words, as the employees continue to follow their goals, they also improve their performance and modify the goals thus making them more realistic. Using expectancy theory which is based on the hypothesis that individuals adjust their behavior in the organization on the basis of anticipated satisfaction of valued goals set by them, Li-Ning employees must modify their behavior in such a way that is most likely to lead them to attain high goals. This theory underlies the concept of performance management as it is believed that performance is influenced by the expectations concerning future events (Salaman et al, 2005).

3.1. Steps to improving Performance Management (PM) and High Performance Working (HPW) in Li-Ning Company
1. Making PM an essential requirement in Li-Ning Li-Nings managers tend to believe that settling disputes with employees is the most important part of their job. Sometimes this is essential, but if settling disputes consumes too much time, then less time is available for correcting the real underlying problems. Li-Nings Mission statement is to use sports to inspire people, desire and generate power to make breakthroughs and potentials. This cannot be carried out if the organization isn't clear where it's going in both long and short term plans. Li-Nings Mission statement is specific as it goes straight to what they really aim for. Before performance is measured, the goals and objectives must be agreed by major parties involved in turning the statement into a reality. Even as China has a high power distance, its not enough for the goals and objectives to be set at the top and then handed down. Changes must not be forced down on employees but must flow down through various stages of agreement. The only goal that is going to be met is one that is agreed on 2. Employee Involvement in Goal setting and building of Self-Competence Providing effective management in an organization is like maintaining a wheel that can handle any ground and can go great distances without breaking down. One of the major attribute of this management wheel is improving employee performance through proper observation, assessment,

and performance feedback. Doing so, Li-Ning performance develop into an objective that do not manage employee performance but helps employees develop job-related competencies. It is crucial that employees understand how their personal goals fit with the objectives of LiNing. With the high rate of Collectivism, team working would help goals and objectives at each level to be shared and discussed. In doing so, employees will have more knowledge on why things are being done, and then set their own key competence and goals to align with these. As a result, instead of loyally following orders, managers, supervisors, and employees in an management of objective (MBO) system would know exactly what needs to be done and thus don't need to be told. When Li-Ning managers begin to include employees in their decision making process and reduce the rate of power distance in their organizational culture, employees will become motivated to set his or her own goals, which support the overall objectives of the team, which support the objectives of the department, which support the objectives of the business unit, and which support the objectives of the organization. 3. Supervising Progress Applying Peter Drucker Management by Objectives theory (MBO), it is evident that since the goals and objectives are SMART, they are measurable. However, Li-Ning has to generate a monitoring system that signals when things are off track. In monitoring these systems, a good time frame must be kept so that issues can be dealt with before they could become a threat to achieving the companys goal. With a clear mission and vision statement made aware for the all to see, no goal is set in segregation, so not meeting targets in one area will affect targets everywhere. Furthermore, it is vital that Li-Ning make certain that the goals are not driving poor behavior due to poor design and implementation of management change. In doing this, a, basic planning and control cycle for Li-Ning Company is represented in a flow chart below.

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Fig 3-2: Design Planning and Control for Li-Ning Company

Start

Formulate Plans

Improve Future Plans

NO Are plans well implemented?

YES Carry out Plans Amend mistakes in plans been carried out.

Process/Compare earlier and final results with plans

End

No Has Action been taken?

YES

Take corrective actions

Poorly implemented MBO tends to stress the goal setting without the goal monitoring. Here is where you take control of performance and demand accountability.

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Li-Ning must recall all the goals they have set and failed to achieve. It is not enough to have good intentions; but rather, each goal should have mini-goals and a method for keeping on top of each one. 4. Appraise and compensate Performance MBO is designed to improve performance at all levels of the organization. To ensure this happens, Li-Ning need to put a comprehensive evaluation system in place. As goals have been defined in a specific, measurable and time-based way, the evaluation aspect of MBO is relatively straightforward. Employees are evaluated on their performance with respect to goal achievement. All Li-Ning need to do is to secure goal achievement to reward, and perhaps compensation, and provide the appropriate feedback. Employees should be given feedback on their own goals as well as the organization's goals. LiNing Chinese Manager must bend the pattern of leadership into a more participative principle. In the end, this is what MBO is all about and why, when done right, it can spur organization-wide performance and productivity. 5. Clarify roles for team members. Li-Ning has workers who know their responsibility and authority, understand their roles and that which are played by others, and use everyones skills and abilities. Employees working in Teams must be clear about the connection between team goals and their day-to-day activities. HPW has the resources and skills needed for success, is able to complete Li-Nings work in a timely fashion, and utilizes quality and productivity measures to evaluate overall efficiency.

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4.

Recommendation

After Li-Ning has done and implemented performance in the company, the performance has to be managed. This could be done in advance by good coaching techniques. Coaching provides the opportunity to get feedback from these experiences - this is achieved by questioning and clarifying. Li-Ning requires an experienced couching in all aspects of human resources, training, management development, marketing and customer service departments. The enthusiastic, dedicated and passionate Li-Ning managers, who possess adequate coaching skills, will automatically inspire, motivate and empower employees to achieve their lifelong goals. In improving performance in Li-Nings future, Joint participation is the ideal management style that should be applied. In other words, there should be less managerial control of decision making and more of employee involvement. Fig 4-1: Recommended Li-Ning Management participation and decision making Inspired by Brown (2001).

Highest managerial Control of decision Making

Joint Participation (Participatory Democratic)

Lowest managerial Control of decision Making Low employee Involvement High employee Involvement

Such Employee Involvement includes: team working, team Briefing, downward communications, two-way communications, suggestion schemes, Problem-solving groups and to an extent, financial participation (Paul Grundy, 2004).
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4.1.

Applying Motivating Theory Maslow

Maslow believed that the needs of an individual could be expressed in the form of a hierarchy of needs. This theory of motivation can be applied to Li-Ning as well as other scenarios. With reference to Maslows theory, it is evident that a workers basic needs are physiological. Unless an individual has food and shelter, it was of no use trying to motivate them at a higher level. This also applies to Li-Ning Company; if employees are not comfortable in their work environment, then motivation at a higher level will be difficult. Fig 4-2: Maslows theory of motivation cited by Maslow (1943)

Once this need is met, the employee is then motivated to gain a sense of security. As soon as a job is felt to be rationally secure, the employee is next motivated by social aspects. Li-Ning could promote a good working environment in its workplace which binds stronger the present sense of teamwork thus creating different ways for employees to communicate. When a good social network is in place, the employee then looks for a feeling of self esteem. Li-Ning managers must always encourage team working and should recognize when a good job had been done. Finally, in other for employees to attain self-fulfillment, Li-Ning could create opportunities where employees could learn and grow at work. Such opportunities could be training, work on project teams or job transfers.

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5.

Conclusion

Performance Management and High performance working is indeed not an easy task. When all these are achieved, there have to be good management of change. Li-Ning must be able to adapt to changes in the marketplace, world, political climate and other areas. Managing change can be difficult, because most people become accustomed to one way of doing things, and change can cause stress for individuals (Alexis W., 2012). Every change in Li-Ning operation must be introduced gradually and not forced down on workers. It is necessary that employees feel confident and comfortable with the any role they are playing to improve performance and high performance working in the company. Training serves a good purpose as helps bring employees up to speed and help make the transition to their contributing roles more flawless. With the accomplishment of all the changes in this academic discussion, Li-Ning will definitely have an upper hand internally and externally against its competitors thus creating a competitive edge that attains all their goals and objectives in a shorter period of time.

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6.

Reference
1. Alexis Writing., (2012). Techniques to Manage Change in an Organization. [Online] Available at:
http://smallbusiness.chron.com/techniques-manage-change-organization-

162.html [Accessed on 14th March, 2012]

2. Armstrong M. & Baron A., (1998). Performance Management. The new realities. London: CIPD 3. Gibb S (2003) Line Manager Involvement in Learning and Development: small beer or big deal? Employee Relations, Vol 25, No.3, pp 281-293. 4. Hofstede G. (2001). Culture consequences (2nd edition). London: Sage

http://www.phwa.org/resources/creatingahealthyworkplace/employeeinvolvement/ [Accessed on 19th April, 2012] 5. Mabey C. et al., (2001). Closing the circle: participants view of 360 degree feedback programme, Human Resource Management Journal, Vol. 11, No: 41-53 6. Marvin R. Weisbord, (1976). Organizational Diagnosis: Six Places to Look for Trouble with or without a Theory, Group & Organization Studies 1, 430-447. 7. Maslow, A. H. (1943). A Theory of Human Motivation. Psychological Review, 50, 37096. 8. Paul Grundy, (2004). Employee Involvement [Online]. Available at: 9. Salaman, Graeme; Storey, John; Billsberry, Jon. (2005). Strategic Human Resource Management: Theory and Practice. 2nd Edition Sage Publications Ltd.

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