the prime objective of all types of organisations is profit earning but above it is the issue of long term sustainability. There are many ways to achieve it. I am narrowing down the discussion on culture. what should be the organisation's strategy in this context? Proactive culture is initiative based and motivates employees through soft HRM practices to continuously update their knowledge and efficiency for better performance. Performance based culture motivates through incentives like financial rewards for enhanced performance. Shouldn't organisation implement a hybrid culture (combination of two) to sustain itself?
One should not expect much from binary choices, aka either/or situations. Presenting extreme points on some spectrum of possibilities gives the impression that the options are mutually exclusive even though they do not have to be. In reality, the truth often lies between extremes or may be found in completely different alternatives. Here, commonsense suggests one should opt for a hybrid of the false dichotomy at hand. The Perils of Performance Measurement, available at https://www.researchgate.net/publication/239823667_The_Perils_of_Performance_Measurement, explains why.
Article The Perils of Performance Measurement
It should be different for different part of the world. for stabilized region performance and destabilized proactive culture
It sounds like your question could be reworded into "Do financial rewards improve performance without harming organizational sustainability?"
Or perhaps "What factors lead to the greatest sustainable performance improvement for an organization?" Of course, the second one sounds more like you are focusing on the sustainability of the improvement rather than the sustainability of the org.
There are companies which are famous for not offering performance-based rewards (Google, The Container Store) and are very successful. This clearly give evidence towards one side of your initial question. There are negative examples on the other side (Enron, financial crisis) showing that giving performance-based financial rewards can lead to very bad results.
So, I guess the question is, is there evidence showing that the lack of performance-based rewards has major problem or is there evidence that performance-based pay leads to improved, sustainable performance?
I position myself into the hybrid side: proactve base is essential for employees emotional motivation, implication and engagement... but most of people work for the need of earnings, therefore economic motivation, peformed-based, would be a good way of supportimng the latter. Question lies on the right balance.
Though some of us may be in favor of performance based culture while others in favor of proactive culture, what needs to be recognized is the impact each one has on the organization. Having recognized the impact - both positive and negative - the organization needs to also have processes that can deal with the negative impacts. When we talk about culture, it often seems that we consider it as a unitary whole. However, in practice, its about designing of the nitty-gritties, systems and practices that represent the balance.
It is clear that performance based culture creates a lot of problems for organizations and long term risk. This is due to mainly two factors: 1) focus on performance locks down the organizational actors to prioritize a predetermined set of agendas and practices. This focus blinds people to what the overall purpose of the organization is supposed to be as people focus on what is measured instead of what is the purpose of those measures. 2) To put a priority with predetermined metrics has the detrimental effect (at least long term) in creating substantial unexpected consequences which can bring the business (and often does) into a crisis and sabotages its long term competitiveness. One main reason for this is that the performance metrics are given priority even when unwanted consequences start to be visible they are not paid attention to as this is not included in the prioritised metrics. On the contrary understanding of detrimental effects of metrics is disqualified because the metrics favour those who can use them to their benefit. These tend then to be the same people who get promoted and so the culture becomes self-sustained until a major crisis hits the business. IN a performance based culture people work towards what is measured - not towards what is the main purpose and objective of the business. This is the real handicap.
Exactly , the performance based culture is needed for promoting human resources and enhancing organizational obligation .Although proactive culture is necessary for exciting members to do all best , but in case of losing performance based culture , the efforts will be biased from strategic goals.
For each one there is situation, but both are very active to adopt
A performance culture is based on discipline that promotes decisiveness and standards of excellence and ensures direct accountability. In this situation, the commitments and expectations are always clear. On the other hand, Proactive culture is initiative based and motivates employees through soft HRM practices to continuously update their knowledge and efficiency for better performance proactive performance management prevent obstructive behaviours and supports, reinforces and rewards constructive ones. In such a culture, people are truly engaged in the business of the organization. So the organization should emphasis on developing performance culture based on proactive interventions.
Proactive culture is about creativity and innovation and nor merely anticipating change. Flexibility, autonomy, adaptability assume importance in creating agile organisations. Performance culture also encourages new think , but doing the same thing same way does not lead to growth.
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