3. Implementation of Successful Performance Management Process
Areas needed to be considered for successful performance management.
Elaine D. Pulakos describes that there are 02 important decisions
needed to make first before implement the performance management process in a
company.
Two Key
Decisions
1.
What is the Purpose of the System?
- Basis for making decisions about pay, promotion, or other important outcomes?
- Employee development?
- Behaviors?
- Results?
- Both?
The organizational purpose gives meaning and direction to individual efforts (Roger J. Plachy with Sandra J. Plachy, 1988).
According to Herman Aguinis there are advantages as well as disadvantages. Poorly designed and implemented performance management systems can have disastrous consequences for all involved(Herman Aguinis,). Business strategies do not always result from a rational plan but may – sometimes serendipitously – evolve over time. (Mintzberg 1978, 1987). For effective performance management clearly the organization needs to know what performance it seek (Torrington et al., 2008).
Procedural justice requires that performance management decisions
are made in accordance with principles that safeguard fairness, accuracy,
consistency, transparency and freedom from bias, and properly consider the
views and needs of employees (Armstrong, 2009).
An effective performance management system encourages managers and associates to work together, communicate openly and provide feedback regularly (Rogers, 2004). There are various methods for conducting the performance management system. Every method of the performance management appraisal system has its weaknesses and strengths that may suits for one organization and not suitable for other organizations. (Bheemanathini et al., Ind Eng Manage 2019).
As per John Shields, from a prescriptive perspective, a well-designed and well-accepted performance management system can be said to have a four-fold purpose: (1) strategic communication, (2) relationship-building, (3) employee development and (4) employee evaluation.
According to the above theories the company should first identify the main requirements and gaps before implementation of the performance management process.
The First three steps should be considered before implementing (Elaine D. Pulakos).
- Ensure Support for the New System
- Realistically Assess the Organization’s
Appetite for Performance management
- Plan a Communication Strategy.
It is compulsory for the company to select a suitable and ideal
performance management system to achieve their goals.
The following are the main concerns of performance management
during the implementation of PMS (Michael
Armstrong, 2006):
- Concern with outputs, outcomes, process and input.
- Concern with planning.
- Concern with measurement and review
- Concern with continuous improvement
- Concern with continuous development
- Concern for communication
- Concern for stakeholders
- Concern for fairness and transparency.
Roger J. Plachy with Sandra J. Plachy identifies the Goals of a Performance-Management Program. The goals are;
- Understand what work is to be accomplished
- Plan together how the work will be accomplished
- Determine together whether performance achieved the agreed-upon plan
Further, According to Matthias Zeuch’s HRM handbook and Dejan Madjoski’s explanation, the company needs to follow some requirements for the implementation of performance management system. Briefly, the steps are:
- Analysis of the present situation
- Analysis of expectations of stakeholders.
- Draft the General framework
- Designing the Performance Management System
- Alignment on Top Management Level and Formal Approval
According to Herman Aguinis, such ideal systems are congruent with
strategy, congruent with context, practical, meaningful, specific, able to
identify effective and ineffective performance, reliable, valid, fair, inclusive,
open, correctable, standardized, and ethical.
HR Department of identified Logistic company had conducted its 01st Employee Satisfaction Survey in November 2011 through Lanka Market Research Bureau (LMRB), a professional and independent market research agency in Sri Lanka for the purpose of:
- To evaluate the effectiveness of PMS;
- Understanding the Level of Commitment amongst employees;
- Establish drivers of loyalty of company employees to the organization;
- Employee ratings on various aspects of the employee-company relationship;
- Assess the level of risk amongst employees, via loyalty segmentation.
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Source: LMRD report from HRD Division of Logistic company
Figurer 3.2 Comments of the Company Director for the above dissatisfaction
 |
| Source: MIS report company |
Mabey et al. (1998: 149) note that performance management can be
‘criticized for relying on a model of
management which is more rational than is achievable in practice, More specific criticisms include the
universalistic form it tends to follow.
Considering the above theories and the company’s problem, it's
clear that performance management systems have to be very complex and have to
include many applications and tools. The
organization should conduct more studies before developing and selecting the
performance management process. On the other hand, it is clearly a significant
challenge for organizations to properly deploy and implement the performance
management system within the organization.
List of references
- Bheemanathini S*, Srinivasan B and Jayaraman A (2019), A Review on Performance Management System (PMS) Methods for Employees Appraisal in an Organization, Industrial Engineering & Management).
- Dejan Madjoski,( 2015) How to Implement a Performance Management System (A to Z process (online) Available at www.linkedin.com/pulse/how-implement-performance-management-system-z-process-dejan-madjo
- Elaine D. Pulakos (2009),Performance Management: A New Approach for Driving Business Results, John Wiley & Sons, UK. pp. 20-24.
- Herman Aguinis (2013), Performance Management, 3rd Edition, Pearson Education, Inc, USA.
- John Shields, (2007), Cambridge University, New York.
- Matthias Zeuch - Editor, (2016), Handbook of Human Resources Management, Springer-Verlag Berlin Heidelberg.
- Mabey, C., Salaman, G. and Storey, J. (1998). Human Resource Management: A Strategic Introduction. Oxford: Blackwell.
- Mintzberg, H. (1978). Patterns in strategy formulation, Management Science, 24, May.
- Mintzberg, H. (1987). The strategy concept I: five Ps for strategy, California Management Review.
- Michael Armstrong (2006) Performance Management Key Strategies and Practical Guideline. 3rd edition, London, Kogan Page Ltd.
- Michael Armstrong (2009) Armstrong's Handbook of Performance Management. 4th edition, London, Kogan Page Ltd.
- Roger J. Plachy with Sandra J. Plachy (1988), Performance Management Getting Results From Your Performance Planning and Appraisal System, AMACOM, New york.
- Torrington, D., Hall, L. and Taylor, S. (2008). Human Resource Management, 7th edition. Essex: Pearson Education Limited.
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ReplyDeleteAccordingly to Armstrong and Taylor (2014), implementing PM supports using Goal theory, Control theory, and social cognitive theory to manage performance management effectively.
ReplyDeleteAccording to the practical guidance of performance management best practices for SME(2014) there are 6 steps includes in the performance management process.
ReplyDelete1. Establishing a business case
2. Tailoring Performance Management to your specific business needs
3. Implementing effective staff reviews
4. Building a process that adapts as your business evolves
5. Analysing and understanding your strategy’s effectiveness
6. Using the most appropriate technology for your company
Agreed with you.Performance evaluation methods, according to Sayles and Strauss (1977), are divided into two categories: traditional methods and current methods. Some methods of performance evaluation are difficult and necessitate a thorough understanding of key strategies. As a result, numerous firms used the old way to evaluate the job performance of their employees. In some cases, using the usual procedure will result in unsatisfactory decisions
ReplyDeleteAgreed. Management control systems are the collection of control processes and mechanisms management uses to reach their organizations predetermined objectives and goals (Malmi and Brown, 2008). Management selects the appropriate combination of these controls to fit their firm's contextual conditions. These control processes and mechanisms are not used separately; instead, they are combined and used together as management control systems (Malmi and Brown, 2008).
ReplyDeleteAgreed. Individual psychological responses to performance assessment should be investigated, taking into account researches from the fields of psychology, organizational behaviors, behavioral accounting, and systems theory. Next to this a lot of performance management research focused on the technicalities of implementing a performance management system rather than on behavioral issues (Martins, 2000).
ReplyDeleteAgreed, Performance management system is one of the factors to decide employee’s promotion, demotion, salary increment, transfer and terminations. It tends to identify the good performance done by the employees, and under performer employees in an organization. It enables the employees’ competency and skill level (Bheemananthini, Srinivasan, & Jayaraman, 2019)
ReplyDeleteAgreed. Organizations without a proper performance measurement system tend to experience lower performance improvement, higher dissatisfaction and high turnover (Longenecker and Fink, 2001).
ReplyDeleteAgreed. Shenon, (2015) described that performance Management is continuous and systematic approaches ensure to achieve organizational business goals by streamlining the employee performance and efforts to match the set goals efficiently. Performance Management builds a communication system between Manager and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteAgreed. Performance management strategic integrated process that does constant reviewing of the organization employees’ performance, developing and improving them for the sustainable growth of employees and organization (Armstrong, 2002).
ReplyDeleteAin and Gautam (2014) stated employee performance management system help employees to understand what organization is expected from them and that will help workers to improve their performance. Also organization can plan their strategies according to employees behavior and performance.
ReplyDeleteAgreed. Further, according to the Berkeley research, performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.
ReplyDelete