1. Performance Management System
Introduction
This blog will review and discuss the relevant literature
pertaining to performance management and performance appraisal system. Further
it will discuss the competency based performance review and discuss the
Performance Appraisal system introduced by a leading Logistic company in Sri
Lanka.
Definitions of the Performance Management System
Armstrong's Handbook he defines the Performance Management is the continuous
process of improving performance by setting individuals and team goals which
are aligned to the strategic goals of the organization, planning performance to
achieve the goals, reviewing and assessing progress, and developing the
knowledge, skills and abilities of people.
According to Roger J. Plachy
"Performance management" is an umbrella term that includes performance
planning, performance review,
and performance appraisal. Major
work plans and appraisals are generally made annually.
Elaine D. Pulakos mentioned the Performance management is known as the “Achilles’ Heel” of human capital management, and it is the most difficult HR system to implement in organizations.
Other definitions are:
- Performance management is: ‘The development of individuals with competence and commitment, working towards the achievement of shared meaningful objectives within an organization which supports and encourages their achievement’ (Lockett, 1992).
- Performance management is managing the business’ (Mohrman and Mohrman, 1995).
- Performance management is: the process of ‘Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organisation’ (Walters, 1995).
- Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors’ (Armstrong and Baron, 1998).
All these definitions and theories can conclude that performance management is important to every organization.
- Leaders can see potential future problems.
- Organization’s Training needs identification and training strategies
- Opportunities for employer and the employee exchange feedback.
- Employees Retention.
- Help for the company process development.
- Boosts Employee Engagement.
- It encourages employee recognition and reward.
- To increase Employees motivation.
- Improve organization performance and can achieve company goals.
The overall aim of performance management is to establish a good
culture in which individuals and teams take responsibility for the continual
improvement of employees’ skills and their organizations (Michael Armstrong,
2006). Roger J. Plachy described that the basic purpose of performance
management is for managers and employees to accomplish the following three
objectives: 1. Understand what work is to be accomplished, 2. Plan together how the work will be
accomplished, 3. Determine together whether performance achieved the
agreed-upon plan.
- strategic purpose;
- administrative purpose;
- informational purpose;
- developmental purpose;
- organizational maintenance purpose;
- documentation purposes.
Performance Management system in the Logistic Company
I work for a leading
Logistic company in Sri Lanka. They believe that the performance management is
the main
function of the HRM division. They consider it as a key component to
improve the employee satisfaction of the company and to achieve the goals of
each process of the organization. They plan the training strategies through
the performance appraisals.
The Figure 1 Showing the management of performance between the needs of the employees and organization by the HRM division.
Source: Own based on (Armstrong, 2009)
Effective performance management aligns efforts of
supervisors and employees with departmental and organizational goals and
motivates all employees to perform at their best. It should provide consistency
while committed to enhance and reward excellence performance (Matthias Zeuch,
2016)
According to the above points and theories, the development of the
individual employee affects the development of the organization. It’s clear the
following 02 main activities are involved of the Performance Management system.
- Evaluating the performance of employees.
- Helping them action plans to improve
Top management of Logistic is committed to fostering a high
performance culture. According to this company practices and the above theories
its clear focus of administers of the PM system is vital and they shall ensure
that each employee of the organization has a clear performance objectives,
ongoing coaching and feedback, professional development, and recognition for
outstanding work.
One of the
first steps in developing an effective performance management system is to
determine the organization’s objectives. These are then translated into
departmental and then individual position objectives, working with employees to
agree their personal performance targets. This allows the employee to know “up
front” the standards by which his/her performance will be evaluated.
List of References
- Armstrong, M and Baron, A (1998) Performance Management: The new realities, Institute of Personnel and Development, London.
- Danni White, (21.06.2021) Importance of Performance Management in an Organization, Tech Funnel.
- Elaine D. Pulakos (2009),Performance Management: A New Approach for Driving Business Results, John Wiley & Sons, UK.
- Herman Aguinis (2013), Performance Management, 3rd Edition, Pearson Education, Inc, USA.
- John Shields, (2007), Cambridge University, New York.
- Lockett, J (1992) Effective Performance Management, Kogan Page, London.
- Matthias Zeuch - Editor, (2016), Handbook of Human Resources Management, Springer-Verlag Berlin Heidelberg.
- Michael Armstrong (2006) Performance Management Key Strategies and Practical Guideline. 3rd edition, London, Kogan Page Ltd.
- Michael Armstrong (2015) Armstrong's Handbook of Performance Management. 5th edition, London, Kogan Page Ltd.
- Michael Armstrong (2009) Armstrong's Handbook of Performance Management. 4th edition, London, Kogan Page Ltd.
- Mohrman, A M and Mohrman, S A (1995) Performance management is ‘running the business’, Compensation and Benefits Review, July–August
- Paul R. Sparrow and Jean-M. Hiltrop: European Human Resource Management in Transition: 1994, New York
- Roger J. Plachy with Sandra J. Plachy (1988), Performance Management Getting Results From Your Performance Planning and Appraisal System, AMACOM, New york.
- Walters, M (1995) The Performance Management Handbook, Institute of Personnel and Development, London
Al
Yes. Agreed Nilmini. Similarly, performance management (PM) is a crucial and essential element for the organization to move to the next step based on the right decision. Without a closer PM system, managers cannot know the job status and cannot give feedback to their stakeholders. It is a vital element to an employee and the organization effectiveness (Cardy and Leonard, 2011).
ReplyDeleteYes Amila. Also Performance management has developed from a very operational focus to a more strategically oriented concept, i.e. where it plays an integral role in the formulation and implementation of strategy (Scott-Lennon, 1995).
DeletePerformance management is a systematic process of improvement of performance of the organization by focusing individuals to the organizational framework(Armstrong, 2004). Gunnigle and Mcdonnell(2008) defined that performance management is an intelligent process in organizational management that managers have to focus on. It is very operational focused strategically oriented concept which plays integral role in the organization performance((McKenna and Beech, 2008)
ReplyDeleteYes. Theoretically it involves a shared process between managers,
Deleteindividuals and teams where goals are agreed and jointly reviewed. Further, corporate,
divisional, departmental, team and individual objectives should all be integrated.
Replied as Jack Welch, former CEO of General Electric (2001: 158) journal.
DeleteAgreed with you. Profitability, productivity, marketing effectiveness, customer happiness, and employee morale should all be included in organizational performance criteria, according to Chan and Lynn (1991). Employee performance, in this view, is inextricably linked to organizational success, and effective and efficient employee performance will have a beneficial impact on corporate performance.
ReplyDeleteYes Menupa. But Unfortunately the extent to which it is an effective and
Deleteuseful system in practice remains open to question. For example, the high use of various
facets of performance management does not always correlate with high results regarding
perceived effectiveness (CIPD, 2005).
Yes. An area where performance management has witnessed considerable growth in attention is humanitarian supply chain management (Ahmed et al., 2019). This type of supply chain management deals with the coordination and integration of external stakeholders in a relief chain to rapidly provide humanitarian assistance to areas affected by large-scale emergencies (Cozzolino, 2012).
ReplyDeleteEffective supply chain management is one of the benefit of Six sigma method. Upon successful completion of all six phases (measure, analysis, controls etc.), the Six Sigma approach really starts to create phenomenal returns that can be translated in a very rapid fashion throughout the organization. (William J. Rothwell, 2012)
DeleteAgreed to the content. Further Performance Management is critical to the effectiveness of the firm (Cardy, 2004) due it being the main process through which work is attained and considered the “Achilles Heel” of managing human capital (Pulakos, 2009). Accordingly Performance management should be on top of the priority list for management of a firm (Lawler, 2008). According to Pulakos (2009) though, less than a third of employees believe that their company's performance management process assists them in improving their performance, and performance management regularly ranks among the lowest topics in employee satisfaction surveys.
ReplyDeleteYes. Thank you Jayashi. As per Porter and Lawler’s model Performance achievement is mainly determined by the effort expended, the individual’s understanding of the task requirements and self-assessment of ability.
DeleteEvery organization should have an effective performance management system to accomplish several organizational objectives include motivating performance, support employees to develop their skills, develop a culture base on the performance, eliminate poor-performing employees and ultimately to achieve the business strategies (Lawler, 2003).
ReplyDeleteIt is argued by Torrington that such objectives should follow the SMART (specific, measurable, appropriate, relevant, timed) rules (Torrington et al., 2008)
DeleteAccording to (Farhat Mohsin & Jyothi, 2020), performance management system is considered as a fastidious approach to manipulate the efficiency and achievement of employees and it is defined as ‘a strategic and integrated approach of transforming continual success path to firms by improving the employees and performance.
ReplyDeleteYes. Increasingly, Human Resource Management is concerned with the strategies
Deletethat employers can adopt to achieve key performance goals.
Agreed. Further, main object of every organization is to improve its performance but it can never be
ReplyDeletepossible without the efficient performance of employees. Therefore, the performance
management system came into effect as a management reform to address and redress
concerns, organizations had about performance (Sharif, 2002)
Agreed. Performance management framework constitutes an integrated
Deleteapproach to many areas, such as recruiting, development planning and learning,
succession planning, mentoring, coaching, and compensation(Matthias Zeuch, 2016)
Agreed and just to add. Performance management is: the process of ‘Directing and supporting
ReplyDeleteemployees to work as effectively and efficiently as possible in line with the needs of the organization’ (Walters, 1995). l ‘Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors’ (Armstrong and Baron, 2004).
Thanks. Performance management implementation follows a time-tested process to ensure successful implementation. At the same time, every performance management implementation is customized and tailored to meet the individual needs of clients requirement. This blend of proven technology with specialized care is the reason performance management delivers enhanced and estimated business results each time(Waka, 2010).
DeleteAgreed. Performance needs to be monitored on frequent basis to review smart goals (Morrison, 2010). many, global 500 companies have abandoned traditional once -a -year performance appraisals in favor of regular “check-ins” and frequent feedback (Lawlor and Hornyak, 2012).
ReplyDeleteEffective performance management aligns efforts of supervisors and employees
Deletewith departmental and organizational goals and motivates all employees to perform
at their best. It should provide consistency while committed to enhance and reward
excellence performance (Matthias Zeuch,2016)
In addition to the aims of performance management, Armstrong (2006) explains about Characterisrics of performance managent as an organizes procedure which agreement, measurement, feedback, positive reinforcement and dialogue are categorized as main elements of it.
ReplyDeleteYes. Also Armstrong explained about 07 characteristics of a high-performance culture were defined by Lloyds TSB. (Armstrong, 2010)
DeleteAccording to Pulakos (2004) , Performnce Management is definitely a common practice worldwide, which helps the organisations to improve themselves regularly. However, he further explains that some managers do not effectively and honestly carry out the evaluations due to various reasons such as demotivation and personal relationships.
ReplyDeleteAgreed. The Line managers play a crucial role in providing non-financial rewards (positive feedback, recognition, opportunity to develop and scope to exercise responsibility). They also, of course, have considerable influence on financial reward decisions – pay reviews and fixing rates of pay. (Armstrong, 2010)
DeleteAgreed with your view, and According to Radnor and McGuire (2004), there has been a revolution in performance management and measurements over the past 20 years. Performance management Systems are not new, and researchers have found reference to performance management during the third century A.D. in China, which has been confirmed by Furnham (2004)
ReplyDeleteYes. Accordingly, organizations are beginning to implement performance management that reflects the new shape of the organization and its emphasis on integration of work, multidimensional influence, and flexible jobs (Mohrman & Cohen, 1995)
DeleteAgreed,
ReplyDeleteemphasize Performance management is an ongoing process that identifies, measures, and develops the effectiveness of an organization by linking each individual's effectiveness and goals to the organization's overall mission and goals further,A well-designed and implemented performance management system can make a significant contribution to the organization. (Aguinis, 2005)
The definition of the requirements for effective performance of work provides the criteria or standards, that are an essential basis for finding answers to the main questions for the
DeleteHR function. (Shaun Tyson,2006)
Thank you Nimana. Powers (2018) also discussed, Throughout measuring employee performance helps to continually improve skills and outcomes is an essential part of the performance management review process. Common metrics include productivity, quality of work, adherence to company values, and teamwork.
ReplyDeleteAgree Nilmini, Performance management system is the systematic approach to measure the performance employee (Kossek and Block, 2010). It is a process through which the organization aligns their mission, goals and objectives with available resources (e.g. Manpower, material etc), systems and set the priorities (Storey, 2017).
ReplyDeleteA performance management system that is expected to achieve a number of important human capital management objectives Motivating performance, assisting individuals in developing their skills, developing a performance culture, determining who should be promoted, eliminating poor performers, and assisting in the implementation of business strategies are all common goals (Lawler,2003)
ReplyDelete