Importance of performance management in organization context
Performance
Management
Performance management refers to the broad range
of trial, policy, dealings, and interventions deliberate to help workers
improve their performance. Performance management usually includes the constant
method of finding, measuring, and increasing the performance of individuals and
groups in organizations (Hooria, Lubna and Mattiullah, 2018).It is the process
of creating a work environment or setting in which people are enabled to
perform to the best of their abilities (Manchester Metropolitan University,
ND).It is a holistic, goal-congruent and largely participatory process of
managing and supervising work in their task, team or groups. It is more
into organizational goals and objectives, manager recognition and awards
corresponding to manager needs and aspirations (Davinder, 2010). Performance
Management deals with the challenges organization face in defining, measuring
and stimulating employee performance with the ultimate goal to improve
organizational performance (Deanne, Paul & Jaap,
2004).
Performance management arises from the awareness that a systematic, organized approach to managing and rewarding performance better generates and sustains positive manager motivation (Davinder, 2010). It is the main vehicle by which managers communicate what is required from employees and give feedback on how well they are achieving job goals. It brings together many of the elements that make up the practice of people management, including in particular learning and development. Performance management establishes shared understanding of what is to be achieved and provides an approach to leading and developing people that will ensure it is achieved (Manchester Metropolitan University, ND).
Objectives of Performance Management
According to (Fadil and Geline,2012) objectives of performance management could be defined as follows
· To review the performance of employees for a period of time
· To review the performance of employees for a period of time
·
To evaluate the gap between the current and
desired performance
·
To support the manager in conducting the
control/audit
·
To help in improving relationships and
communication between managers and employees
·
To establish the strengths and weaknesses of
employees, in order to identify training needs and future development
·
To provide the feedback from employees
regarding their performance
·
To ensure the clarity of expectations and
responsibilities of the functions to be performed by employees
·
To evaluate the effectiveness of other
functions of the organization's human resources such as recruitment, selection,
training and development
The Performance Management cycle
Figure 1 :The performance management cycle
Figure 1 :The performance management cycle
Source
: Michael and Stephen,2013,pp.337
The Performance Management cycle in Delmege and Forsyth Company Ltd
Objective
of this exercise is to enhance business results through continuous assessment
and managing of employee performance(HR form10 -Performance Evaluation Form P2,Delmege Forsyth
and company). Hence the exercise
should be completed within the defined timeline with utmost care. It is
mandatory to discuss with employees about their performance and agree on future
performance. Performance feedback will help and guide employees to perform
better. Performance appraisal should be conducted in a fair and equitable
manner (HR form10 -Performance Evaluation Form P2,Delmege Forsyth and company) . Performance evaluation year is from 1st
April to 31st March of the succeeding year.
Performance
evaluation consist of following parts(HR form10 -Performance Evaluation Form
P2,Delmege Forsyth and company).
o
Objective Setting- by 30th April every year
o
Mid-year Review of objectives - by 31st
October every year
o
Year-end Review of objectives - by 10th
April every year
o
Qualitative Factor Evaluation (Should be done
at the year-end review)
o
Training Needs Identification
·
Performance
planning and agreement
·
appraiser, appraisee and appraisee’s superior
should sign the Performance Evaluation Form at the end of objective setting,
Mid-year review and Year-end review (HR form10
-Performance Evaluation Form P2,Delmege Forsyth and company).
·
Objective Setting -
Following areas should be completed in objective setting (HR form10
-Performance Evaluation Form P2,Delmege Forsyth and company).
§ KPIs/Quantitative Factors–
Brief but clear description of the performance objective.
§ Target – Always should be quantified.
§ Weight – Weight given to each
objective. Total weight of four objectives should be equal to 100%
§ Expected Achievement by Mid-Year –
Percentage of achievement of the objective by the mid-year.
E.g.
Objective is to introduce 50 new customers and at least 30 customers should be
introduced by the mid-year. Hence the expected achievement by mid-year (30th
September) is 60%
·
Training needs
identification(HR form10 -Performance Evaluation Form P2,Delmege Forsyth
and company).
§ Select
3 general skills by putting a tick.
§ Name
the training requirements specifically needed according to area of work
·
Duly completed forms should be submitted to the
HR Division by 20th April
·
Act
Performance Activities
·
Carry out day to day job role
·
Carry out training programs on performance
improvement and personal development
·
Monitor
/manage performance throughout the year
·
Midyear review (HR form10 -Performance
Evaluation Form P2,Delmege Forsyth and company).
§ Objective
of the mid-year review is to track the progress of the performance objectives
and identify corrective actions as and when required.
§ HR
Division will distribute performance evaluation forms to relevant Heads of
companies / SBUs / Divisions, during the month of September.
§ Tick
the relevant cage according to the agreement percentage.
E.g.
Achievement by mid-year is 25 customers. Hence the achievement percentage is
50% ((25/50)*100)
§ Duly
completed forms should be re-submitted to the HR Division by 31st October
·
Review
and Joint analysis of performance
Yearend review- Following areas should be
completed in Year End Review (HR form10 -Performance Evaluation Form P2,Delmege
Forsyth and company).
§ KPIs/Quantitative
Factors Year-End Evaluation.
§
Quantify the achievement of the objective.
§
If any employee has achieved more than 100%,
mark the achievement accordingly.
§
Discuss the achievement % with employees. If
any employee does not agree with the score, clarify his/her doubts
§
Obtain the achievement score by multiplying the
weight of the objective by the achievement percentage (Refer A*B remark in the
form).
§
Obtain the total year end %.
·
Qualitative Factor Evaluation
§ Refer
Performance Factor Standards section for standardization of rankings.
§ Add
the total score of six factors. Maximum should be 30 (6*5).
·
Divide the total score by 30 and multiply the
answer by 100.
·
Performance Summary
§ Take
Quantitative Factor Evaluation final score (X) and Qualitative Factor
Evaluation final score (Y).
§ Multiply
the score by respective weightings (80% and 20% respectively) and obtain the
total. Add to totals together and obtain final score.
·
Duly completed forms should be re-submitted to
the HR Division by 10th
April.
·
Conducting performance review joint discussions
Figure 2 :Performance Evaluation Form – Delmege
Group of Companies
Establishing Performance Management system in Organization
According to Madela and Dorin(ND),following nine guidelines and ideas can assist to develop a performance
management system
- Motivational rather than confrontational
- Take great care in establishing what it is that you want to measure
- Develop effective measurements that tell people how they are doing
- Establish straightforward, honest criteria that tell people exactly what they must do to achieve a particular score
- Communicate the established criteria to the people who need the information to perform effectively
- Obtain employee input when establishing the criteria and the measurements
- Review the employee’s progress on the defined criteria, goals, and competencies regularly
- Avoid the “halo” effect, the employee needs to see and read his performance ratings, rankings, the judgment calls
- Previously established criteria that came together
to form his ratings.
According to Herman (2013),characteristics of a proper
performance management system would be
Strategic congruence , Thoroughness ,Practicality ,Meaningfulness ,
Specificity , Identification of effective and ineffective performance
,Reliability , Validity ,Acceptability and fairness , Inclusiveness ,Openness ,
Correctability ,Standardization and Ethicality.
Further Brandon Hall Group Research team (2016) says six critical characteristics of performance management system are
- Make performance management people centric .
- Focus development on enhancing strengths and not fixing weaknesses.
- Align performance goals to business goals.
- Leverage technology to enable effective performance management .
- Train managers to be effective performance coaches .
- Recognize employees for small and large accomplishments .
Also a
good performance management system should have top management support, involve
employees in their development, ensure that those measures used are relevant to
managers and employees in performing their day-to-day jobs, be part of a
feedback loop that links them to manager and employee performance appraisals ,Primarily
use non-financial performance techniques, vary between locations, change over
time as the company needs change, are
intended to foster improvement rather than just monitoring (Paul.and Jim,ND).
Importance
of having good Performance Management
system
Performance
management is expected to improve organizational performance generally by
creating a performance culture in which
the achievement of high performance is a way of life. More specifically,
effective performance management ensures that individual goals are aligned with
organizational goals, so that key performance indicators for employees are
linked to those of the organization, and the contribution people can make to
organizational performance is therefore defined (Michael and Stephen,2013).
Further
Davinder (2010) identifies the benefits
of performance management as It focuses on results rather than behaviors and
activities , Aligns organizational activities and processes to the goals of the
organization. Performance Management identifies organizational goals, results
needed to achieve those goals, measures of effectiveness or efficiency
(outcomes) toward the goals, and means (drivers) to achieve the goals. This
chain of measurements is examined to ensure alignment with overall results of
the organization, It Cultivates a system-wide, long-term view of the
organization.
Challenges
in setting up good Performance Management
system
Organizations
face various challenges when setting up a
performance management system(Fadil,Gelina ,2012). Further some of the interesting challenges of
performance management are content of appraisal nowadays goes beyond task
performance to incorporate contextual performance. A key challenge in this area
is determining what constitutes good performance and hence what should be
measured and stimulated. They argue that as organization’s leading performance
indicators shift towards innovation and the creation of knowledge, more
non-routine work and interdependence between workers is found and performance
criteria at lower levels should shift to reflect this( Deanne , Paul and Jaap , 2004).
Also defining
the evaluation criteria and Identification of assessment criteria is one of the
biggest problems facing the executive manager ,creation of assessment
instruments that focus on developing employees is another challenge ,lack of competence in choosing the evaluation
criteria, Errors in the assessment due to subjective assessment ,The assessment
process can be faced to resistance from employees and trade unions for fear of
negative assessment (Fadil,Gelina ,2012).The
context of Performance Management is changing and cultural differences and the
impact of new technology as interesting emerging areas . For instance, as more
and more organizations work internationally, collaboration and coordination of
people located in different nations increases. Often this collaboration within
organizations takes the form of global work teams. Performance Management is
problematic in such teams as members are likely to have widely differing
viewpoints about appropriate ways to reward, recognize, evaluate and train and
develop team members ( Deanne , Paul and
Jaap , 2004).
Conclusion
Organization's
human resources are of great importance to its success. Without effective
employees, organizations would work so ineffective and would risk failing to
enforce claims of its objectives and mission. Therefore, every organization
within the strategy that has, it applies the most appropriate system of
performance management, a process that helps in the commitment of all employees
towards achieving the objectives of the organization (Fadil,Gelina ,2012).
Today,
HR works towards facilitating and improving the performance of the employees by
building a conducive work environment and providing maximum opportunities to
the employees for participating in organizational planning and decision making
process. Today, all the major activities of HR are driven towards development
of high performance leaders and fostering employee motivation. So, it can be
interpreted that the role of HR has evolved from merely an appraiser to a
facilitator and an enabler. Performance management is a much broader and a
complicated function of HR, as it encompasses activities such as joint goal
setting, continuous progress review and frequent communication, feedback and
coaching for improved performance, implementation of employee development
programmes and rewarding achievements. The process of performance management
starts with the joining of a new incumbent in a system and ends when an
employee quits the organization(Sukanta and Chandan ,2015).
References
· Brandon Hall Group Research Team,2016,’ Performance Management 2016: people Over
Process’,1st ed., Brandon Hall Group
· Davinder,S.,2010, Performance Appraisal and Management,1st ed.India,
Himalaya
Publishing House
· Deanne, N.D.H., Paul,B. and Jaap,P.,2004, ‘Performance Management: A
model and research agenda’, Erasmus Universiteit Rotterdam,pp.1-20
· Fadil,O.,Gelina,M.,2012, ‘Performance Management, Its Assessment and
Importance’, Audit Department, Post Telecom of Kosovo, Pristine, Kosovo b Finance
Department, Faculty of Business Administration “Kristal” University,
41(1),pp.434-441
· Herman,A.,2013,’ Performance Management’,1st ed.UK, Edinburgh Business
School Heriot-Watt University
· Hooria,S.,Lubna,K.,Mattiullah,B.,2018, 'Effect of Performance Management on Employees Well-Being via Perceived Job Control ',Macrothink Institute,2(1),pp.18-32
· Madela,M.A.,Dorin,C.,ND,’The importance of implementing
performance management system in Romanian firms ‘,University of Oradea
· Manchester Metropolitan University,ND, ‘Performance Management An introduction’,1st
ed.UK, Department of Human Resources, Manchester Metropolitan University
· Michael,A. ,Stephen.T.,2013, Armstrong’s Handbook of Human Resource
Management Practice,13th ed. India, Michael Armstrong
· Paul,F.,Jim,B.,ND,’ A Review of Performance
Measurement: towards performance Management ‘,Computer Integrated Manufacturing
Research Unit (CIMRU), National University of Ireland
· Sukanta,M.,Chandan,K.S.,2015,’
Organizational Effort towards Performance Management System: A Key to Success
‘,Industrial Engineering Letters,5(2),pp.20-25
Nadeesha, Performance management is one of the critical functions in HRM in an organization. Increasing importance of performance appraisals create more challenges for it. Osmani and Maliqi (2012) state that all activities that ensure effective achievement of organization objectives are included in performance management. However, they further mentioned that there are many challenges for successful appraisal process such as problems in defining clear criteria, lack of competence in choosing evaluators, personal bias may create many errors and resistance from employees or trade unions for fear of negative assessment. Therefore, if an organization overcome these challenges effectively, employee performance appraisal will be more productive.
ReplyDeleteDear Chathurika as you correctly stated HRM function in any organization should play a vital role in establishing good performance management system where both employee and employer will be getting benefitted through that effort . Michael J. Mucha (2011) has given 8 tips, as how to overcome challenges in establishing good performance management system .Those would be overcoming organizational fears , overcoming elected officials’ fears, finding appropriate levels of resources to devote to the effort, avoiding strategic planning process overload, working around limitations of existing financial systems, making consistent use of data , focusing on what is really important, viewing performance management as a temporary trend which are very important tips for HRM teams in any organization .
DeleteDear Nadeesha, As stated by Campbell (1990), Task performance in itself is multi-dimensional. Also Borman & Brush, (1993)says . (1) planning and organizing, (2) guiding, directing, and motivating subordinates and providing feed-back, (3) training, coaching, and developing subordinates, (4) communication effectively and keeping others informed . Aderson & King, (1993), says In recent years, researchers paid attention to specific aspects of task performance. For example, innovation and customer-oriented behavior become increasingly important as organizations put greater emphasis on customer service .
ReplyDeleteDear Hemendra It is conceived that the effective implementation of performance management system is the key to success for organizations looking for achieving the organizational goals. The traditional approaches like performance appraisal create many hindrances and instead of playing an effective role in the organization develop a cold war between the employer and employees. Developing and managing a performance management system is not an easy task. There should be consensus among employees when goals are developed. Goals are such that which should be easily subdivided into different organization level. By using the balance scorecard approach developed by Kaplan and Norton (1992) all the four prospective (financial, customers, process, and learning and growth) must be kept in mind. Management should be committed to develop the system and proper communication with the employees should be made. Clear measures should be adopted and employees at all levels must be aware with the adopted measures. Performance management is a continuous process; to follow up should be given to the employees so that employees can come to know regarding their performance in the organization (Sukanta and Chandan,2015).
DeleteDear Nadheesha, I agree with your conclusion. in recent years and based on modern issues confronting these companies, they have started refocusing their attention towards performance management system to improve their employee performance (Buchner, 2007; Gruman & Saks, 2011). Most of these companies now combine their PMS with strategic management system such as Balance Scorecard (BSC) which will clarify their strategy and translate it into achievement (Kaplan & Norton, 1992; 1996; 2001).
ReplyDeleteDear Shameer , yes you are correct ! as per Bill Dann (2011) strategic plan is one tool in performance management. It sets the performance agenda and can be used to manage that agenda and can measure whether strategies are improving performance. There he identifies balance score card as a measure of overall performance metrics which is uniquely designed for each organization. This monitors value-proposition, factors that distinguish from the competition, key success measures and key systems that drive success. Hence it is obvious that PMS and strategic management system are closely interrelated and it is wise to find tools such as balance scorecard in PMS to reflect such interrelation .
DeleteNadeesha, performance management has become a part of a more strategic approach to integrating HR activities and business policies (Fletcher,2001) Furthermore there are three different models of performance management: performance management as a system for managing organizational performance; performance management as a system for managing employee performance; performance management as a system for integrating the management of organizational and employee performance (William,1998). Moreover, performance management provides organizations the opportunity to refine and improve their development activities (Amaratunga and Baldry, 2002).
ReplyDeleteDear Rochana as you correctly said performance management system have become an increasingly important tool for organizations to manage and improve the performance of employees, to make more valid staffing decisions, and to enhance the overall effectiveness of the firm‘s services and products. The design, development, and implementation of PMS are not endeavors that can be effectively handled by following the latest fad or even by copying other organizations‘ systems. Instead, a new performance management system must be considered a major organizational change effort that should be pursued in the context of improving the organization‘s competitive advantage (Pondicherry University,ND). In such context , we can conclude that any PMS has above 3 aspects which you mentioned .
DeleteNadeesha Armstrong( 2006) describe the role of the performance appraisal as a tool for looking forward to what need to be done by people in the organization in order to achieve the purpose of the job to meet new challenges .Better use of technology skills and attributes (Szilagy &Wallace 1990) in addition will help to develop both organizational and individual capabilities and reach agreement on areas where performance needs on the effectiveness of its employee generating information which influences many of the organizations decision. Annual performance appraisals enable management gauge and monitor whether institutional standards, expectations and objectives, and delegation of responsibilities and tasks are achieved. Staff performance appraisals also establish individual training needs and enable organization to identify training needs analysis and planning. Armstrong and Baron ( 2008) commented that nowadays most performance management systems had shifted importance towards continuous staff development and self evaluation.
ReplyDeleteDear Ama, as you correctly said performance management system in any organization will enable organization to evaluate their staff and to define plans on their continuous development. According to Fadil and Gelina (2012) there are different types of performance assessment in PMS such as assessment of features ,assessment of behavior, assessment of results and self assessment which can be considered as a comprehensive assessment of individual employees which ultimately enable organization to do a individual evaluation and make development plans .Performance management system (PMS) is a complete process, which is based on the workforce performance and fulfillment of organizational objectives at all levels. The basic philosophy behind the performance management system is to develop the alignment between the organizational objectives, with the employees’ skills and capabilities, moreover it emphasizes on the development and improvement of the overall system(Sukanta and Chandan,2015).
DeleteEffective performance management in organizations, particularly emphasizing high levels of employee performance, the organizational context is very important for successfully accomplish company’s strategy and objectives (St-Onge & Morin, 2009; Haines III & St. Onge, 2012). Therefore, in the overall context of business globalization, authors focus on outlining the role of particular organizational contexts where employee performance appraisals take place, outlining the interest on future research comprising the wider cross - cultural context (Den Hartog, Boselie, & Paauwe, 2004).
ReplyDeleteDear Jancy ,Performance management is a continuous process of managing the performances of people to get desired results. High-performing organizations require effective performance-management systems to promote and develop the values, principles and competencies needed to sustain optimal outcomes.
DeletePerformance management encompasses activities such as joint goal-setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee-development programs and rewarding achievements. It can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework (Sahoo and Sukanta,2012).
Dear Nadeesha, according to Chan and Lynn (1991),the organisational performance criteria ought to embody profit, productivity,marketing effectiveness, client satisfaction, however conjointly worker morale. In this perspective, worker performance is tightly associated with organisational performance, effective and economical worker performance can absolutely influence organisational performance. Moreover, Macky and Johnson (2000) state that the importance of performance management system is very important in the organisational performance, and this is often achieved by improved individual employee performance. According to Otley (1999), a general performance management considers problems such as “What are the key objectives that are central to the organization’s overall future success, and the way will it approach evaluating its accomplishment for every of those objectives?
ReplyDeleteDear Niroshini Implementation of a well-designed performance management system can strengthen an organization in numerous ways. Through the alignment of individual and organizational goals, PM systems advance strategic organizational objectives. High-quality PM systems also improve work contributions of employees by offering increased opportunity and guidance for growth and development. When PM is done well, it leads to many desirable results. However, poorly designed PM systems can easily cause more harm than good. Given the stakes of PM administration, it is imperative that care is taken in the development and deployment of an organization’s PM system. A thoughtfully designed and implemented system allows for competitive advantages, from the maintenance of a committed, strategically aligned, and well-developed talent pipeline to the ability to make legally defensible and data-driven human capital decisions ( Kelsey and Alison,2016).Also In the current economic and financial crisis knowing the factors that generate success and the ways in which it can be measured has a critical importance. Performance indicators are designed to provide information on the quality of processes performed within an organization offering support to achieve the objectives on time and within a predetermined budget. But, to fulfill this role is necessary to understand their full and proper use ( Corina,Liviu and Roxana ,2011)
DeleteDear Nadeesha, according Scott (2018) Performance management is not: A yearly performance review, An annual employee survey, Conducting job-critical skills training, Ranking employees based on their productivity (and firing the least productive 😱). Although the items above can contribute to employee growth and improvement, they’re often used in place of actual performance management tactics that take time and effort to plan, implement, and grow. If you’re committed to improving the current and future work of your employees and the company’s growth according to business objectives, these tactics will get you started.
ReplyDeleteLong-term career pathing: One of the most important parts of performance management is getting a clear picture of where the employee hopes to move their career. This can mean rising vertically through the company or perhaps integrating new skills and knowledge with non-linear pathing. Setting a career path doesn’t have to dictate every move the employee makes, but it can help clarify decisions about leadership roles, training opportunities, and even the types of projects assigned to the employee.Short-term goal setting: uses the employee’s strengths and current skills along with the manager’s resources to find new ways to help the employee achieve success in their current projects. Recognition : An important part of maintaining and improving the performance of employees is providing verbal and/or written recognition of the employee’s strengths and contributions to the team. Showing appreciation for the employee’s skills and hard work can go a long way toward improving morale and reinforcing good performance–and it’s a lot less expensive than bonuses or raises
Hi Ricky , Thanks for your valuable comments. In fact According to Carter McNamara, (1997) Performance management is a complete process which throws light on the overall organization performance to the departments and at the employees’ level. It also tends to focus on the process to provide a products or services in the organization. Before that Alfred D. chandler, (1970) proposed the shift of Performance Management from organization structure to the employees for achieving better performance. Gary Cokins, (2008) defined the multi dimensional organization structure in order to performance management. The basic philosophy behind the performance management system is to developing the alignment between the organizational objectives, with the employees’ skills and capabilities, moreover it emphasize on the Development and improvement of the overall system. People mostly misperceive the performance management to the performance appraisal; In actual performance appraisal is judging the past performance while performance management system is an ongoing process to measuring the fulfillment of objectives(Faisal and Muhammad ,2009)
DeleteHi Nadee, it is stated by several authors that Performance Management encompasses critical activities.
ReplyDeletePerformance management is an ongoing and continuous process which involves three main steps. Firstly, need to identify and set objectives which are aligned with the company mission. Then it is required to observe and measure performance against the set objectives on a periodic manner and to provide and receive required coaching and feedback accordingly (Aguinis, 2013). Effective Performance Management allow employees to enhance productivity, improve communication between employees and managers, clarify job responsibilities and expectations, develop employee capabilities to their fullest extent through effective feedback and coaching, drive behavior to align with the organization’s core values, goals and strategy and provide a basis for making operational human capital decisions (Pulakos, 2004). To sustain optimal outcome, organizations are required to have effective performance management systems to promote and develop the values, principles and competencies. It is required to facilitate constructive discussion between the employees and their supervisors to clarify the work performance gaps and to design Performance Improvement Plan (PIP) with periodical review. Post the PIP discussion, supervisors are required to monitor and review the consistency of employee performance, ensure the support and resources that require to bridge the performance gap, periodical feedback on performance and the possible consequences if performance standards are not met (Sahoo and Mishara, 2012).
Hi Nilmini, I agree with you . The basic purpose of performance management system is to creating the alignment in between the organization objectives and its sub systems to achieve the organization objectives( Carter McNamara,2008). In modern organization there should be a balanced performance management system to achieve the organization objectives. By strategically using the performance management system organizations can develop its performance standards, can develop the measures and then reports the finding for further improvement and in this a continuous process keep running (South Carolina, 2002). A balance performance management system initiative was taken by Kaplan; Norton, (1992) to achieve the organization’s vision strategically. Balance score card focusing on the four business prospective i.e. financial, customer satisfaction, business process and the organization learning and innovative culture. A recent survey determined that the companies use an average of 13 management tools at the corporate level. These tools are intended to help measure or monitor the performance of an organization, and within this the most popular performance related tool was the Balanced Scorecard (Rigby and Bilbo bead 2005). In the absence of a basic strategic context, managers found it hard to agree on an appropriate set of measures of organizational performance (Ahn, 2001). Balance scorecard is the platform for measuring the organization performance having coordinating with financial and non financial aspects of business (Irwin D, 2002).
DeleteDear Nadeesha, I agree with what you have stated above. Performance management is a constant procedure of identifying, measuring and developing performance in organizations by connecting each individual’s performance and objectives to the organization’s overall mission and goals. Performance management is important to small and large organizations – for-profit and not-for-profit, domestic and global – and to all industries (Herman, 2017).
ReplyDeleteperformance of the work place depends on the performance of its people, irrespective of the organization’s size, purpose or other characteristics (Herman, 2017)
Perceived organizational support (POS), linking to the extent to which employees feel the organization values their work contributions and cares for their well-being, provides an important tool for this objective. Research reliably shows that POS is linked to employees increased psychological well-being and performance plus reduced absenteeism and turnover. Appropriate rewards and recognition for the achievement of high performance are strong drivers of POS ( Robert, Glenn and William, 2016).
Hi Nipuni as you correctly stated ,perceived organizational support (POS) influences some important employee attitudes and behaviors such as organizational citizenship behavior (OCB), organizational commitment (OC), job satisfaction, and turnover intention, among other attitudinal variables (Pack, 2005). Performance management play a vital role in this context ( The Ohio State University ,2008).
DeleteMost organizations have spent insufficient time establishing goals and measurements for employee performance. Performance reviews are an inadequate reflection of an employee’s work. They rarely focus on achievements related to measurable goals. They tend to focus on most recent performance and ignore the contributions an employee makes all year long. They can lack objectivity. Managers rarely seek feedback from other managers and colleagues about an employee’s performance.
The performance-improvement plan (PIP) is designed to facilitate constructive discussion between a staff member and his or her supervisor and to clarify the work performance to be improved. In all cases, it is recommended that the supervisor’s boss and the human-resources department review the plan. This will help to ensure consistent and fair treatment of employees across the company (Heinen and O’Neill, 2004). The supervisor will monitor and provide feedback to the employee regarding his or her performance in the PIP.
The supervisor should review the following items with the employee:
-The performance level that the employee should consistently maintain;
-The support and resources that will be provided to help the employee;
-The plan for providing feedback to the employee;
-The possible consequences if performance standards are not met;
-Sources of additional information, such as the employee handbook and standing orders(Sahoo and Sukanta ,2012)
Dear Nadeesha , As you correctly said Performance Management is one of key aspects of human resource management and is considered a core function to be performed by business leaders, human resource professionals, and managers. While business leaders give direction in terms of “what” aspect of performance management, HR professionals manage the “how” part and managers deal with the “doing”. As a process, the performance management integrates aspects related to strategy, planning, managing, legal, and human resources. The key of a successful performance management system is to identify the hard and soft elements and incorporate the best practices.
ReplyDeleteThe key belief of having a strong performance management program is that it can help business be more successful and help employees perform and grow. It also helps to create a sustainable organization and build a strong employer brand.
This element deals with goal setting for both organization and the individuals below. Some of the best practices at this stage are
a. Using mechanisms like Balanced Scorecard to have different perspectives of goals captured (eg: Financial, Customers, Process, and People)
b. Ensuring the organizational goals (Goals of the CEO) are captured within the various business and functional heads
c. Goals are cascaded to levels below and also provides provision for unique contributions of individuals and focus should be on a maximum of 5 to 6 goals
d. Goal setting involves discussion between manager and employee and relevance of goals are explained. Best practice is that the goals are set by the employee and approved by the manager e. Goals follow “SMART” framework and as Dick Grote mentions, they should be “Wise”
f. Manager shares his/her goals with her team and explains the “big rocks” of expectations
g. Goals are aligned to employees’ roles as much as possible.
h. Targets and stretch targets and outcomes of achieving them are explained
i. Explain what to deliver, and what are the expected behaviors – setting of performance standard ( Sandeep ,2013)
Dear Shanaka , I agree with you and would like to comment on your point a -Long term success of a business is determined from its performance, which is directly dependent not only from the formulation and application of the correct laws, but also from the management of the sound strategies. In today’s competitive business environment, companies understand that having right strategies, achieve to accomplish their business strategies, and to monitor their performance. Therefore, business aims to develop the best strategies toward performance management in order to understand how the business operates, and how it can do better. Performance measurement is conducted from all the business in a systematic manner and sometimes ad-hoc. To assess performance of a corporation is essential its research aspect. The issue many businesses have faced is the development and application of the correct measurements that will push the strategy to improve the performance. Traditional accounting measures, which mainly focus on financial aspect have been criticized and labeled as a backward, and not relevant (Kaplan and Norton 1992). For this reason, in the contemporary time, the focus on the non-financial measurements of the performance is gaining grounds and higher support from the business community. A performance measurement tool that has gained popularity in practice and literature is balanced scorecard. This model considers necessary financial indexes, and those non-financial ones to determine the performance level of corporations. Balanced scorecard includes performance measurements from those perspectives: Financial, Customer, Internal Business Processes, Learning and Growth. Supporters of the balanced scorecard argue that to achieve success in financial measurements, first non-financial measures have to be achieved (Davis and Albright 2004).
DeleteDear Nadessha,
ReplyDeleteAs you may agree, No performance management system can produce sustained high performance without motivated staff in an organization (Spangenber and Theron, 2001; Rainey, 2003; De Bruijn, 2007). Staff motivation, as a important aspect of human resource management, is a requirement for high performance. Hence, there cannot be high and sustained performance without sound human resource management practice. Performance management and HRM are intricately linked and the role of motivation in performance management is of supreme importance (Noutomi and Nakanishi, 2007). The aim of all performance management systems is to improve performance by aligning individual and organisational goals, by rewarding good performance, adjusting weak performance and by grooming ,developing and motivating staff that is, addressing performance gaps through training and development. However, many things go wrong during the process of implementation, often resulting in unintentional repercussions and having the contradictory effect, which is staff demotivation and weak performance. A global survey conducted by Kaplan and Norton (1996) showed that only 10% of performance improvement strategies are successfully executed.
Dear Nishan ,Balanced scorecard is used to measure performance. This is a sophisticated instrument which helps to coordinate and to arrange better operations of a company in order all of its activities to be in compliance with its strategy. Balanced scorecard can be described as a performance management tool that eases the translation of the vision and the strategy of a company towards a tangible set of measurements. It has been suggested that a balanced set of measures should be used by businesses to enable the higher management to undertake a comprehensive view in business from four perspectives. As such, these perspectives provide answers for four substantial issues as identified below.
Delete• Financial perspective (What we need to achieve)?
• Client perspective (How to make clients more valuable)?
• Internal business process (What we should be distinguished in)?
• Learning and growth (How we can continue to improve and create value)?
This model has been developed by Kaplan and Norton in 1992, where many mistakes have been discovered while using traditional measurement tools. In essence, balanced scorecard has been developed to improved financial methods to measure performance (Tayles et al, 2002). Kaplan and Norton (2001) argue that usage of balanced scorecard is focused on a number of management integrated ideas of accounting, which helps the manager to see the business on those four perspectives. Basically, a company that involved non-financial measures, as a part its framework, is able to track the financial results, and to monitor the required intangible aspect for higher growth. Those measures give management a balanced view of what is happening in all of its business sections, in order to help business to plan accordingly its goals and strategies on short term and long term basis. Balanced scorecard stabilizes financial measures with non-operational measures, which are known as the key drivers of future financial performance. In this direction, balanced scorecard provides a combination of measures that will direct that which strategy will be translated towards a set of coherent of performance measures(Skender,Arben and Muhamet ,2016)
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ReplyDeleteDear Nadeesha,
ReplyDeleteIt is clear that the performance management drives the company for the sucess and it could be cosidered as one main source to the employee satisfaction. However. the term employee satisfaction is mainly looking at the happiness of the employees which do not directly shows the level of motivation, level of involvement and the emotional commitment of the employees towards the business and the job role (Mohapatra & Sharma, 2010). Furthermore, it was understood that the satisfaction is a difficult criterion to measure where the measurement of satisfaction will vary from one employee to another (Saks, 2011).
If an organization is looking at the improvement of satisfaction of the employees, it is not necessary to looking at the performance improvement where the employees could satisfy by offering various benefits and privileges to them (Sharma & Raina, 2013) However, the improvement of the employee engagement will require to ensure that the employees are satisfied with the work load and the recognition which increases the commitment towards the business.
Dear Nadeesha, According to Chan and Lynn (1991), the organizational performance criteria should include profitability, productivity, marketing effectiveness, customer satisfaction, but also employee morale. In this perspective, employee performance is tightly related to organizational performance, effective and efficient employee performance will positively influence organizational performance. On the other view, Millar (2007) built a framework of talent management which consists of planning, recruiting, performance, learning, career development, succession planning, compensation, and measuring and reporting. In order to organize a company effectively, companies must rethink how they hire, train and reward their employees; therefore the employees could be encouraged to be competitive. Undoubtedly, there is an important factor is human in organizations. One of the main management strategies of the organizations is to invest in employees. Organizations are seeking to develop, motivate and increase the performance of their employees in a variety of human resources applications (Gungor, 2011). Thus, performance management should be an important step in the organization's HRM system and influences employee performance and then to organizational performance.
ReplyDelete