Establishing Performance Management system in Organization

According to Armstrong (2013), performance management system is a means of getting better results from the organizations, teams and individuals by understanding and managing performance within the agreed framework of planned goals and competency requirements. It is a process for establishing shared understanding about what is to be achieved and an approach to managing and developing people. According to Gubbins and Rousseau (2015), the elements of good performance management system would be:

Goal setting — Top management need to set goals the right way. They need to be meaningful and understood. Employees should have context as to why these individual goals matter and how they are furthering organizational objectives. Employees will care much more about their roles and be much more engaged when they know and truly understand how their job matters.

Transparent communication and collaboration — Employees want and deserve their managers and leaders to be open and authentic at all times. They don’t want to be kept in the dark when their companies are going through hard times. They want to be kept abreast of pertinent information. On top of this, they want real-time communication while building healthy relationships with their colleagues and managers. This will involve regular feed­back and honest discussion even when such communication is difficult or uncomfortable.

Employee recognition — An effective performance management system should prioritise employee recognition and reward. Employees should feel valued and appreciated for the work they do and the effort they put in. If employee recognition is not a priority, this will most likely have a negative bearing on voluntary turnover.

Honest and regular feedback and reviews — The more frequent and precise the feed­back, the better individual performance. It’s that simple. Employees want regular insights into their work and the better informed employees are regarding their performance, the better able they are to improve and excel.

Employee development — No ambitious top performer wants to remain at a company long-term without honing and developing skills. Advancement and development are important to employees not to mention, companies stand to benefit when employees are more skilled and capable.

Furthermore, 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. Moreover, 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).

     Video 1 : How to establish a good performance management system in organization 

                Source :Public Health Centers for Excellence,2015 

Brandon Hall Group Research Team,2016,’ Performance Management 2016: people Over Process’,1^st ed., Brandon Hall Group.

Herman,A.,2013,’ Performance Management’,1^st ed.UK, Edinburgh Business School  Heriot-Watt University.

Gubbins, C. and Rousseau, D. M. (2015). Embracing translational HRD research for evidence-based management: Let's talk about how to bridge the research–practice gap. Human Resource Development Quarterly, 26, 109–125. doi:10.1002/hrdq.21214

Madela,M.A.,Dorin,C.,ND,’The importance of implementing performance management system in Romanian firms ‘,University of Oradea

Michael,A. & Stephen,T.(2013), Armstrong's Handbook of Human Resource Management Practice: Building Sustainable Organizational Performance Improvement.

Paul,F.,Jim,B.,ND,’ A Review of Performance Measurement: towards performance Management ‘,Computer Integrated Manufacturing Research Unit (CIMRU), National University of Ireland.