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Introduction and Overview
Emaar Properties was originally established as a public limited joint stock company in 1997, listed on the Dubai Stock Exchange. It started out as a mega real estate development enterprise operating in Dubai, but over the course of almost two decades, the company’s operations have expanded to several overseas destinations. Furthermore, Emaar Properties’ current scope of projects includes developing boutique hotels, state-of-the-art shopping malls, as well as retail projects. Catering to the high-end, luxury property customers, the principles of excellence in design and quality of materials to ensure that a superior product is delivered to the customer within the agreed-upon time are at the core of all projects and operations .
Since the focus of Emaar Properties is on delivering highly customized real estate solutions for its elite clientele, having an effectively trained and competent workforce is essential to ensure customer satisfaction with Emaar Projects, be they for individual customers or its business clients. It is for this reason that periodic performance measurement exercises are conducted to assess and evaluate if the employees are meeting – and ideally exceeding – the minimal performance criteria as well as the goals and targets that have been set for each quarter .
Therefore, the company utilizes two different Performance Management Systems to ensure that the quality of their products and services is not being compromised at any stage of the manufacturing, development and delivery.
The first method involves administering Productivity Tests that are primarily used for factory floor workers, in Emaar’s case, this involves its production and mechanical engineers, as well as its Site Supervisors and Project Engineers . The productivity tests involve measuring the project completeness ratios against pre-specified deadlines as well as monitoring the budgetary expenditures. Both these factors are important because construction delays are a norm in the industry, simply because of the reliance on different external stakeholders that provide raw materials and semi-finished goods for Emaar’s constructions.
However, the rationale used by the HR Department in using these tests is that a certain degree of time delays and cost overruns have already been taken into consideration when project plans are being developed . Thus, if the expenses exceed beyond a certain margin (typically ranging between five and 15%) or if a certain project appears to be falling behind in its timely completion schedule, then the management is immediately alerted that there is an underlying issue that needs to be resolved. In most cases, it turns out to be an error in judgement or calculation of the Project Manager in-charge.
This does not imply that those leading the project are blamed for inefficiency or slacking performance; Emaar places great value on its human resource everywhere in the world. The results of the Productivity Tests are more for the purpose of raising red flags, ideally, as soon as project and consequently employee performance goes off tangent. This is why the HR Department does not rely solely on productivity tests (that only consider quantifiable performance metrics).
The second approach that is increasingly being employed to evaluate team and individual performance at Emaar Properties is that of 360 degree feedback. More holistic and less number-based than productivity tests, the premise of the method is that the level of performance should not only be judged only on the hardcore results that get reported periodically. Instead, there is a need to also take into account an employee’s level of commitment to the company, team and project, as well as his/her approach towards work . While productivity tests follow the traditional top-down instructional method of pointing out what is wrong and who is at fault, 360 degree feedback involves an employee’s superiors, peers as well as subordinates in the performance assessment.
This method though more difficult to implement, has yielded important benefits for Emaar Properties over the years. This is because it is often the people who are working on the day-to-day operational side of projects who have an extremely insightful understanding of how processes can be improved and how managers’ can maximize their efficiency and productivity. Therefore, by combining the input from different tiers of employees presents information from varied disciplines and helps in identifying areas of improvement and what could have been done differently .
For the more senior level managers, yet another strategy is used, although with very limited implementation scope, and that is Management by Objectives. This approach only works when applied on Project Managers and Department Heads, who are often responsible for setting their own goals, as well as the timelines for achieving them. The personal involvement if objective setting means that these managers with substantial resources at their disposal are increasingly committed towards achieving them despite probably and often much unexpected setbacks .
HR Challenges and Opportunities
Since Emaar Properties has several business groups operating within it, in order to streamline operations, each business group has its own designated Human Resource Department, and each one is responsible for conducting performance appraisals as per schedule. Despite the combination approach for performance evaluation that the company uses, the greatest challenge that each HR Department faces is determining the extent of responsibility that falls on internal processes and people when targets are missed . As mentioned earlier, the value chain of the real estate development sector is such that there are many stages and multiple parties are involved in contributing products and services. It is important to keep the unique nature of its supply chain in consideration in performance measurement because most of its production and financial losses are dependent on events and players outside its direct control.
If targets are not met, it hints at a possible internal as well as an external problem and this has emerged as the primary area of concern for the HR Department at Emaar Properties. This is because if employees are unfairly accused of inefficiencies or a lack of competency, it would contribute to losses in morale and motivation, both of which will combine to decrease organizational productivity and deteriorating levels of customer service .
Solutions and Recommendations
In order to tackle this increased influence of external players on the organization’s project completion and service quality goals, Emaar Properties has embarked on a program of developing long-term collaborations with its value chain stakeholders, such as its suppliers and distributors to name a few . The idea behind this was that when the other industries it relies on are also vested in the performance outcomes of Emaar Properties, they are more likely to focus on quality and timeliness at their end as well. Otherwise, usually, such relationships are very short-term and are viewed more from a project-by-project basis rather than as a long-term, mutually beneficial relationship.
References
Fahy, M. (2016, July 16). Opportunities abound despite region’s construction complications. The National, pp. 2-4.
Mayhew, R. (2016, January 13). The Three Types of Methods Used to Measure Performance. Chron, pp. 1-3.
McBride, S. (2014, July 8). Dubai's Emaar Properties faces market oversupply risks: Moody's. The Economic Times, pp. 8-11.
Robson, I. (2005). Implementing a Performance Measurement System Capable of Creating a Culture of High Performance. International Journal of Productivity and Performance Management, 137–145.
Wisner, J. (2001). Link Firm Strategy to Operating Decisions through Performance Measurement. Production and Inventory Management Journal , 5–11.
