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.
Also according to Chang & Hahn (2006), employees
are motivated to improve their performance through effective performance management
system. A performance management program is essential to promoting and
improving employee effectiveness. It involves a continuous process in which
managers and staff work together to plan, monitor and review goals and
individual contributions to the agency. Further, Haines & St-Onge (2012),
state managers know their employee’s strengths and weaknesses through good performance
management system .A performance management system can enable managers to
better understand their employees’ skill sets and proficiency levels. Through
improved employee observation, managers master understanding of an individual’s
strengths and weaknesses. The manager and the employee can offer each other
feedback and address concerns, creating a transparent work environment.
Managers can also get a sense of how to motivate employees, from leading by
example to fair allocation of work. Moreover, according to Schneid, Isidor,
Steinmetz & Kabst (2016), good performance management system enables employees
to be more engaged. A good performance management system leads to more employee
engagement. If they are satisfied with their performance management system,
employees are more motivated and less likely to leave the organization. Engaged
employees are more involved, committed, passionate, and empowered. These
feelings lead to employees going the extra mile in supporting the agency’s
mission. At the same time, Wells et al. (2007) say, through effective performance
management system, employees understand their job responsibilities. An
effective HR system also gives staff a better understanding of their daily
tasks, as well as insights into behaviors and results needed to perform their
job well. If an employee receives constant and high-quality feedback, the
employee well become more self-aware of their behaviors and leads to more
growth and development. Such systems empower HR team members to be a resource
for employees and managers in goal setting and progress tracking. They also aid
in creating and approving individual development plans, which can include:
training, helping employees learn role-supportive knowledge and improving
skills in their current roles.
Video 1 : Benefits of having good performance management system
Source :Swayaminfologic,2014
Chang, E., & Hahn, J. (2006).
Does pay‐for‐performance enhance perceived distributive justice for
collectivistic employees? Personnel Review, 35, 397–412.
doi:10.1108/00483480610670571
Davinder,S.,2010,
Performance Appraisal and Management,1st ed.India,Himalaya Publishing House.
Haines, V.
Y., & St-Onge, S. (2012). Performance management effectiveness: practices
or context? The International Journal of Human Resource Management, 23,
1158–1175. doi:10.1080/09585192.2011.561230.
Michael,A. ,Stephen.T.,2013, Armstrong’s
Handbook of Human Resource Management Practice,13th ed. India,
Michael Armstrong.
Schneid,
M., Isidor, R., Steinmetz, H., & Kabst, R. (2016). Age diversity and team
outcomes: A quantitative review. Journal of Managerial Psychology, 31, 2–17.
doi:10.1108/JMP-07-2012-0228.
Wells, D.
L., Moorman, R. H., & Werner, J. M. (2007). The impact of the perceived
purpose of electronic performance monitoring on an array of attitudinal
variables. Human Resource Development Quarterly, 18(1), 121-138.
https://doi.org/10.1002/hrdq.1194.
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 .
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 .
ReplyDeleteDear 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).
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)