Here at Celayix, we consider ourselves experts in the field of Employee Scheduling. We’ve operated in the space for over 20 years! We’ve also helped countless customers transform their employee scheduling processes to save time and money. Ultimately, we’ve helped our customers improve their organizational performance, in more ways than one.
What is Organizational Performance?
The term organizational performance has many different interpretations. Most commonly, it is broken down and measured in both economic and operational terms.
- Economic performance assesses the financial outcomes, focusing on profits, sales, return on investment, and other important financial metrics.
- Operational performance, however, looks at observable metrics such as customer satisfaction, customer loyalty, competitive edge, and company resources – including the workforce.
It’s important to also note that organizational performance is measured for different levels of hierarchy, and can also be assessed on an individual level, group level, or for the entire organization. All organizations should have some assessment of their performance, whether it’s quarterly, annually, or even monthly. The reasons for measuring organizational performance can determine how you do it, and how often. There are many reasons to measure organizational performance. Measurement might be carried out to justify the spending of investor funds. It might be to help with managerial decision-making. It can also be used to find weak spots in the organization which can highlight where time, effort, and money might be needed.
How to Measure Organizational Performance
As we mentioned above, the method of measuring organizational performance is often determined by why you measure it. There are countless ways to do this, and they can be unique to your organization depending on your industry and management style. However, there are 3 prominent and effective measures, so let’s break those down.
Survival and Growth
Perhaps the clearest way to measure organizational performance is as a measure of survival and growth. Essentially, businesses may consider their performance strong and effective if they continue to meet their goals and continue to grow and improve. However, there is a weakness in this measurement method; it fails to account for external (and even internal) factors that might impact the business environment. For example, a company will struggle to increase sales in a shrinking economy or recession, regardless of their efforts.
With this measure, organizational performance is measured on the balance and harmony between environmental demands and internal capabilities and resources. When these two factors are aligned, an organization will perform at its best. Another approach to this measure is to consider if a company can achieve high productivity and employee satisfaction with low employee turnover and costs.
Finally, we look at the measure of relevancy for organizational performance. With this view, optimum performance is achieved when organizations fulfill the demands of all stakeholders while using optimum resources. Stakeholders include investors, employees, customers, and anyone else impacted by the performance of the business. However, this measure fails to consider the volatility of modern markets and the pressure on businesses to continuously evolve.
With these 3 measures in mind, let’s look at how we can assess organizational performance on different levels.
There are 4 main areas to consider when assessing individual contribution to organizational performance.
- Task performance: is generally indicated by the successful completion of assigned tasks, the quality of work completed, general skills and knowledge of the worker, and the ability to plan, problem-solve, and make decisions.
- Contextual performance: evaluates everything outside assigned work tasks. It looks at social, organizational, and psychological factors such as resourcefulness, enthusiasm, motivation, creativity, and interpersonal relationships.
- Adaptive performance: is indicated by responsiveness at work, innovation, adaptivity, flexibility, open-mindedness, and continuous learning.
- Counterproductive work: is a negative measure that accounts for absenteeism, time theft, tardiness, substance abuse, and another disregard for instructions and workplace safety.
Team Level Performance
Similar to individual assessment, team assessment for organization performance also looks at task completion as an important measure. As well as completion, task proficiency is also considered, as team members who are proficient in their tasks are associated with higher performance levels. Team processes, adaptability, orientation, leadership, and backup behaviors are also important factors to consider when measuring team-level organizational performance.
Organizational Level Performance
Finally, when it comes to assessing overall organizational performance, it’s important to look at a wide range of measures. First, where possible, organizations should consider the sustainability of processes and outcomes. While a process is working now and generating results, it might not be sustainable to continue that process into the future in terms of costs or availability of resources. Another important element is strategic planning. This should be measured using internal and external assessments with a cascading system of goals, strategies, and plans. When done correctly, the effectiveness of meeting goals generally improves. Finally, when looking to measure organizational performance, managers should clearly define what they mean by performance while considering all stakeholders.
How does Employee Scheduling Impact Organizational Performance?
Let’s recall the two terms in which we consider organizational performance – economical and operational. Both of these terms are directly linked to employee scheduling. Poor, ineffective employee scheduling can increase costs, and impact productivity and general workforce management.
Employee Scheduling and Financial Organizational Performance
Did you know that on average, 70% of organizational costs are related to the workforce in one way or another?Human Capital Management Institute
Payroll is, of course, the biggest chunk of these costs. With this in mind, an optimized employee schedule is perhaps one of the best ways to reduce these costs and improve financial organizational performance. This can be achieved in many ways.
Optimum Staffing Levels
Overstaffing is one of the most common issues when it comes to ineffective scheduling. Poor workforce management leads to using employee scheduling to put out fires, rather than controlling costs. Assigning too many employees to a particular shift, or project will ultimately eat away at company profits.
Manual Scheduling Processes
As you can imagine, manual employee scheduling processes are a huge drain on costs. Paying a scheduler to spend huge chunks of time to create, manage and distribute schedules is completely inefficient. There are automated employee scheduling software out there that can cut schedule creation time by up to 95%! This allows schedulers to use their time more efficiently and provides them with opportunities to use their expertise elsewhere to improve organizational performance overall.
Finally, employee scheduling, when managed effectively, can cut costs and improve financial organizational performance by eliminating unnecessary overtime. Celayix rules-based engine for scheduling allows you to create schedules using overtime as an absolute last resort. Employees who are about to go into overtime will not be assigned to shifts without first alerting the scheduler. Overtime is a huge financial burden and impacts other areas of the organization. Persistent overtime can lead to employee burnout and potentially increased turnover.
Employee Scheduling and Operational Organizational Performance
Operational organizational performance is related to a number of important metrics including customer satisfaction, and the management of company resources.
Poor staffing levels as a result of poor employee scheduling generally lead to unhappy customers. Taking the hospitality industry as a key example, imagine a shift that is understaffed. Customers are left waiting, service is slower, and over-worked staff do not maintain service standards. The same can be said for healthcare, where patients suffer if a practice is short-staffed. Effective employee scheduling allows schedulers to maintain staffing levels for both financial and operational benefits.
Operational performance relies on having a solid workforce. Poor employee scheduling practices can result in high employee turnover and low employee retention. Unfair scheduling, persistent overtime, poor work-life balance, and lack of flexibility are all important factors here. Automated employee scheduling software leads to happier employees, who are more likely to stick around in better working conditions.
There are many ways that employee scheduling practices contribute to, or impact organizational performance. If you are looking to improve how your organization operates, it’s a great place to start! Not only will it improve your organizational performance, but those effects will also be felt on every level of your organization. Ultimately, employee scheduling does impact all stakeholders. Investors like to see effective use of their money, customers are happy with excellent service, and employees/managers are happier too.