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IJPPM
56,1 Implementing a new performance
management system within a
project-based organization
60
A case study
Received June 2005 Mei-I Cheng
Revised February 2006 De Montfort University, Leicester, UK
Accepted March 2006
Andrew Dainty
Loughborough University, Loughborough, UK, and
David Moore
The Robert Gordon University, Scott Sutherland School, Aberdeen, UK
Abstract
Purpose – The paper seeks to show that implementing change initiatives in organizations is
extremely problematic, particularly in relation to human resource management (HRM) initiatives. The
challenges inherent in implementing new HRM systems and procedures is arguably more acute in
project-based organizations where temporary teams and geographically dispersed employees render
the coherent implementation of new systems and procedures problematic. This paper presents the
findings of case study research in which the implementation of a new performance management
system for improving individual project manager performance is evaluated. A framework is developed
for guiding the implementation of similar change initiatives in other project-based organizations.
Design/methodology/approach – A longitudinal case study methodology was adopted for the
study. This enabled the ways in which resistance to change was manifested, and to be explored, and the
actions necessary to circumvent barriers to its use discerned. The final framework is derived from a
review of change strategies in other industries and sectors as well as from the case study findings.
Findings – The paper finds that barriers to implementing new performance solutions stemmed from
a lack of senior management commitment and support, ingrained working practices and an absence of
appropriate training interventions. These are relatively straightforward to overcome as part of a
robust implementation framework.
Research limitations/implications – The assertions made within the paper are based on a single
case study. Further work is required to validate the findings within other organizations.
Practical implications – The posited approach in this paper provides a practical implementation
methodology, which may be transferable to other project-led organizations. The framework provides a
point of departure for organisations looking for practicable ways of mitigating organizational
resistance to performance initiatives, particularly project-oriented businesses, which face additional
challenges in terms of delivering coherent change programmes.
Originality/value – In the paper the practical implementation methodology proposed provides a point
of departure for companies considering strategies for successfully implementing performance
management tools in the future.
Keywords Performance management, Organizational change, United Kingdom
International Journal of Productivity Paper type Research paper
and Performance Management
Vol. 56 No. 1, 2007
pp. 60-75 The project on which this research was based was funded by a grant from the EPSRC. The
q Emerald Group Publishing Limited
1741-0401
authors wish to acknowledge the assistance of the construction company who took part in the
DOI 10.1108/17410400710717082 development of the research on which this paper is based.
Introduction Performance
Performance management, in a human resource management (HRM) sense, is the management
process of delivering sustained success to organizations by improving capabilities of
individuals and teams (Armstrong and Baron, 1998). It supports the philosophical system
principle that people and not capital provide organizations with a competitive
advantage (Reynolds and Ablett, 1998). However, performance management presents
severe challenges in terms of practical implementation (Bourne et al., 2000). Many 61
managers remain sceptical of researchers’, advice in this area, as previous studies have
largely failed to overcome many of the organizational constraints on its successful
implementation (Redman, 2001). Overcoming barriers to change is especially
important given their close relationship to the fulfilment of the psychological
contract and related HRM systems (reward, development, etc.). The psychological
contract construct recognises the existence of a “soft” set of expectations held by the
employee, which have to be organized and managed (Sparrow, 1998). Within the
relationship defined by the psychological contract, the employer and the employee
inform, negotiate, monitor and then re-negotiate (or exit) the employment relationship.
Thus, if the employee feels that a performance management approach breaches or
violates their psychological contract expectations this can lead to an irrevocable
breakdown in the employment relationship (Robinson and Rousseau, 1994). Careful
implementation of performance tools is therefore crucial to their success as
contributors to organizational development.
This paper reports on case study research analysing the introduction and first year
of operation of a new performance management system within a large project-based
organization. The aim was to evaluate the success of the implementation process and
based on this analysis, to identify learning points, which could inform the
implementation of other change initiatives within project-based organizations in the
future. The paper begins with a review of the role of performance management in
facilitating organizational change and development. Following this, the
implementation of a performance management system is examined via a case study
of a large organization seeking to develop a new was of managing the development and
contribution of its employees. A large construction company provided an experimental
arena for exploring the process of implementing performance management systems for
this study. The barriers to the implementation of the system emerging over the course
of the study are examined and, following a review of how such barriers have been
overcome in other sectors, a new framework for implementing performance solutions is
developed. The framework provides a point of departure for organisations looking for
practicable ways of avoiding organizational resistance to performance initiatives,
particularly project-oriented businesses, which face constraints, rooted in short term
objectives and temporary involvement structures (Turner, 1998). This work represents
the first phase of a research project aimed at developing innovative methodologies for
enabling organizational change and transformation within the construction sector.
Strategic planning
This involves activities linking the new system to the company mission, vision and
defined business strategy, and strategic priorities and goals (see, Lorange, 1998;
Trader-Leigh, 2002; Garrick, 1998; Garavan et al., 2002). The new strategy should be
consistent with the strategic direction of the company and be appropriate to the
prevailing market conditions. The expertise and knowledge of strategy makers in
managing change are crucial, and only active participation from all levels of
management will ensure its success. The potential impact of ongoing and future Performance
projects on the new initiative should be considered and an overall maintenance management
strategy is needed to guide those with responsibility for the day-to-day operation of the
new system. This must ensure senior management commitment to the implementation system
process. The impact of organizational culture on communication, coordination and
cooperation between different levels of management and functional areas should be
addressed, especially in relation to the potential impact of the new strategy on informal 71
networks, politics and key stakeholders (see, Barodoel and Sohal, 1999; Riis et al., 1997;
Okumus, 2003; Hansson et al., 2003; Aghazadeh, 2002; Yamashina, 2000; Page and
Curry, 2000).
Conclusions
72 The process of successfully implementing a performance management system is
currently under-researched. This paper has explored the process of implementing one
such initiative within a large construction company. Based on the case study findings,
barriers and solutions to implementing transformational practices stem from a lack of
senior management commitment and support, employee resistance to change (which is
grounded in a reliance on ingrained working practices), and an absence of appropriate
learning interventions to facilitate their introduction. The practical implementation
methodology proposed in this paper provides a point of departure for companies
considering strategies for successful initiative implementation, and identifying
barriers and facilitators to the implementation process. The challenges, problems and
difficulties of implementation can be evaluated against the headings contained within
the framework, thereby providing a route towards the espoused goal of creating a
learning organization. Although the motivation for its development was based on
barriers to change manifested in a single case study, these are broadly reflective of
those emerging in other studies of strategic implementation across a range of different
areas (see Table I). Thus, given the range of sources from which it has been derived, it
is posited that this may provide a generic framework for further strategic
implementation in the future. However, future phases of the research will test the
framework’s ability overcome the barriers identified.
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Corresponding author
Mei-I Cheng can be contacted at: mcheng@dmu.ac.uk