Performance management is a process of ensuring the organizational goals are achieved more competently and productively within the organization. Performance management attempts to increase operational performance by aligning internal and external objectives with corporate goals.
Armstrong (2014, p.391) define Performance Management as “A systematic process for improving individual, team and organizational performance” and “The continuous process of improving performance by setting individual teams and goals which are aligned to the strategic goals of the organization, planning performance to achieve the goals, reviewing progress, and developing the knowledge, skills and abilities of the people”
The term “Performance management” is commonly used in the sector of HR since the early 1990s. It is now totally agreed that performance management is a natural process of management that focuses on managing individual to align with organizational goals by employee defined measures, skills, competency requirements, development plans, and results in delivery which helps to keep employees motivated. This will assist the employer to identify employee degradation, complications and take appropriate measure to overcome the situation(Armstrong and Baron, 2005).
Figure 1.0: Evolution of performance management
Source: (Bhattacharyya,2011).
Performance Management Cycle
Effective performance management cycles align the efforts of managers or supervisors and workers with organizational goals (Russell and Russell, 2009). Promote consistency in performance appraisal and encourage all workers to perform at their best. This method ought to be applied fairly and transparently. Many employers or managers now view performance management as an ongoing cycle of activities that links the organization's culture, business goals and strategies to individual performance and contributions (John Mattone,2013).
Figure 2.0: Stages of performance Management development Cycle
Source: (Harvard Business Review,2017)
According to Harvard Business Review (2017) figure 2.0 described as, Planning - Organization employees are set with SMART objectives which aligned to one or more company goals. Developing – Expand the employees’ current expertise and develop a plan to enhance new skills and knowledge to get the best performance out of them. Monitoring and Performing -continually measure performance and provide continuous feedback on manageable methods to help and support them to achieve their goals. Reviewing - The review is to assess the performance of an employee or team based on goals, criteria, and standard that agreed upon during the planning phase by using multiple tools. Once identified, the focus will be on areas that need to redevelop, and cycle again retunes to the planning phase. Rewarding - If all goals are achieved, it’s time to reward employees. By rewarding employees, managers recognize the contribution of employees to the organization and motivate them to engage with more objectives.
References
- Armstrong, M and Taylor, S. (2017) Armstrong’s Handbook of Human Resource Management Practice. 13th ed. London: Kogan Page, Limited.
- Aguinis, H., 2013. Performance Management. 3rd ed. New Jersey: Pearson.
- Armstrong, M. and Baron, A., 2005. Managing Performance. 1st ed. London: CIPD.
- Aguinis, H., 2019. Performance Management. 3rd ed. New Jersey: Pearson.
- Bhattacharyya, D., 2011. Performance Management Systems and Strategies. 1st ed. India: Pearson.
- Business, H., 2017. Hbr Guide To Performance Management (Hbr Guide Series). Harvard Business Review Press.
- Mattone, J., 2013. Powerful Performance Management. 1st ed. New York: AMACOM.
- Performance Reviews into Performance Partnerships. 1st ed. United States: ASTD.
- Russell, J. and Russell, L., 2009. Ultimate Performance Management: Training to Transform Performance Reviews into Performance Partnerships. 1st ed. USA: ASTD Press.
I agree with above. According to (Ingram and McDonnell, 1996) measuring the performance of employees should be a compulsory task. It allows an Organization to have a record of organizational activity in order to determine their progress and help refocus strategy.
ReplyDeleteThank you Chandran, 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.
DeletePerformance is important to review with employees their performance expectations, including both the behaviors employees are expected to exhibit and the results they are expected to achieve during the upcoming rating cycle. Behaviors are important because they reflect how an employee goes about getting the job done—how the individual supports the team, communicates, mentors .Behavioral and results expectations should be tied to the organization’s strategic direction and corporate objectives (Greguras, G. J., Robie, C., Schleicher, D. J., & Goff, M.,2003).
ReplyDeleteHi Radhika,As per the Aguinis (2019) Performance is all about Behaviors and Results. Performance is a mixture of two things:
Delete* Behaviors and actions: What an employee does
* Results and products: The outcomes of an employee’s behaviour
Both of these elements are important and they impact on each other.
Performance management cycle is important to encourage employees to perform at their best but Performance appraisals are very time consuming and can be overwhelming to managers with many employees. I’ve known managers who were responsible for doing an annual Performance Appraisals on hundreds of employees.
ReplyDeleteThe entire process can be a waste of time if not done appropriately. Think about the time investment when the end result is negative. It is time wasted on all fronts.
The company i work for is an educational leader in the business, we used an online performance appraisal method that includes a feedback mechanism on line. It allows saving our time and it can be done through any ware of the world. By using technological enhance systems we can save time and it will give the same opportunity for employees and managers to catch up.
DeleteAs per Awasthi and Kumar (2016) , employee development has a key interconnection with employee performance, and focusing on correct behaviors to promote and develop within employees is an essential part of employee performance management.
ReplyDeleteEmployee development plans are necessary for the employees, as the activities are completed, it indicates that the organization cares about their employees and wants them to develop (Elena, 2000). Most of the organizations are spending on employee development. When organizations are providing towards the employee development activities, the employees work hard and use their full skills and efforts to achieve the objects of the companies.
DeleteAdding to your definitions of performance management, Fletcher (2001) describes performance management as the approach to helping each employee of a company understand and recognize their part in contributing to the shared vision and mission of the organization, and in doing so enhance the performance of both the individual and the organization. I would also like to add that the planning stage of the performance management cycle should involve identifying key value drivers of stakeholders and should be executed with great care in order to help encourage commitment and understanding by linking employees's work with company goals and objectives (Schneier et al.,1987)
ReplyDeleteAdding more to your comments, Discussed by Harvard Business Review (2017) Performance Management provides a new multi-step, cyclical process to help you keep track of your employees' work, identify where they need to improve, and ensure they're growing with the organization.
DeleteStakeholders brought into the planning process can help contribute ideas and assist to create potential solutions. Often, stakeholders are from different backgrounds, they look at issues from different viewpoints. This enables opposing viewpoints to get expressed and discussed. As Suggested by your comment adding them on the planning stage will give enhancement for achieving the objectives(Harmon, 2019).
Adding on to your article. Aguinis (2005), emphasize 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.
ReplyDeleteThe performance management system has more than 25 years of maturity. It can improve the way to organize and manage its most valuable resources - the people who create everything possible. 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).
DeleteApart from that, when setting up a performance management system it should be fit with the organization culture(Rudman,2003)since it is integrated part HRM.
ReplyDeleteAgreed on the comment, As Discussed by Kandula (2006), the key to excellent performance lies in a strong culture. He also believes that due to differences in organizational culture, the same strategy used by two organizations in the same industry and at the same location will not provide the same result. A positive and strong culture can make an ordinary individual perform well and achieve brilliant achievements, and a negative and weak culture may make a good employee lose motivation, perform poorly, and ultimately fail to achieve. Therefore, the organizational root of perseverance and internal combination is a common mentality and a degree of consistency.
DeleteHi,Sahan
ReplyDeleteI do agree with your discussion. To further elaborate on the topic,"Achilles ' heel" in human resource management is performance management programs, which usually involve performance evaluation and employee growth.In many companies, they suffer from weaknesses with employees and managers constantly complaining about their inefficiency. Watson Wyatt's recent survey revealed that only three out of 10 staff believe that the performance management process of their company is helping to improve efficiency(Pulakos,2004).
Hi Indika, Thank you for highlighting importance of efficiency related to performance management. We can use Performance management process to improve efficiency in many phases of the Performance Management development Cycle. One of the good examples is Match Tasks to Skills in Planning Phase and you can use later stages to monitor and review it.
ReplyDeleteAs discussed by Devlin, (2017) Understanding the skills and behavior of employees is critical to improving efficiency. For example, an extroverted, creative, out-of-the-box thinker might be a good candidate to sell ideas to customers. However, if they are given a more disciplined, detail-oriented task, they may struggle.
It's inefficient to ask your employees to be good at everything—on the contrary, before assigning tasks to employees, ask yourself: Is this person best suited to accomplish this task? If not, find a skill and style that meets your needs.
According to (Furnham, 2004) Performance Management was traced since 18th and 19th century. It has been evident that throughout America and Britain that this was widely practised. Therefore it is clear that this is not something new. Further he comments that atleast 2/3 of the big companies had to use the performance management system as it was in the legislation of Britain.
ReplyDeleteHi Shakir,Thank you for the history highlight.With the history we need to consider Performance Management revolution as well.As Per the Dresner and HowardIt, (2007) concluded that more than one-third of companies are reconsidering the way they do performance management, laying more weight on driving future performance rather than rating past performance.
DeleteAgreed with the article sahan, Adding to the article Performance management is a series of activities designed to ensure that the organization get the performance it needs from its employees. To increase the importance and relevancies of performance management (Johnson and Kaplan,1987) state that the evaluation of performance management should use a modern management approach.
ReplyDeleteAgreed on the comments.Effective performance management plays an important role in Effective employee management. The definition and implementation of the performance management system promote employee productivity and morale. Modern performance management is a realistic reflection of organizational culture and management progress. Like the people it is designed to support, modern performance management never stops learning, growing and developing(Harvard Business Review, 2017).
DeleteYes, indeed, Performance Management supports in enhancing the operational performances of the organization that will ultimately lead in ensuring the achievement of organizational goals and objectives in an effective and efficient manner (Armstrong, 2014). Not only that, it is evident that Performance Management is an ongoing cycle of activities including Planning, Developing, Monitoring, Reviewing and Rewarding that builds a relationship among organizational culture, corporate goals and the strategies use for ensuring individual performances (John ,2013)
ReplyDeleteHi Yohan,Thank you for the comments.Adding more to the comment.According to Armstrong (2004), performance management is an imperative and interracial method to favoring organizational success by developing the performance of staff in the organization and improving the capacities of the team and individual contributors.
DeleteAgree that effective performance cycle should align efforts of supervisor and subordinate, therefore it should be constantly reviewed and rewarded, according to Parker et al. (2013) major setback of evaluating the work performance of organizations around the world has been to determine the performance standards related to the objective set by their organizations.
ReplyDeleteThank you Mizni. Employee performance, usually operationalized as performance ratings, has been the most generally used criterion measure for validating selection tests. The method of test validation is crucial for any organization because it establishes a relationship between scores on the test and performance on the (jobDeNisi and Pritchard, 2006).
DeleteDear Sahan, Fully agree with you , Performance management is one of the critical functions in HRM in an organization. Increasing importance of performance appraisals create more challenges for it ,It is a holistic, goal-congruent and largely participatory process of managing and supervising work in their task, team or group. It is more about organizational Objective as well as goals, recognition of managers and awards corresponding to the needs and aspirations of managers.(Davinder, 2010)
ReplyDeleteAdding more to your comment. Watson (2008), have explained engaged employees are not born; they’re made. Most employees care a lot about their work. They want to learn and grow. They want stability and security, and, with the right opportunities and resources, they’ll commit to a company. They care deeply about a work-life balance – which does not mean slacking off. They want to give more and get a measurable return for their effort.
DeleteHi Sahan, great introduction to the topic. Building on the points discussed by Armstrong (2014), one of the key focuses of performance management is making sure that the employees abide by the core values defined by the organization. At my current organization, the performance management is divided in to four key main areas as financial, client, process and people. Each of these areas have a focus on the alignment of the employee with the organizational values.
ReplyDeleteThank you Nadeeranga for the Highlights.Adding more to the comment, Performance management systems are a useful tool for driving organizational change(Aguinis, 2019).
DeleteFor example, suppose an organization decides to change its culture to put product quality and customer service first. Once this new organizational direction is established, performance management is used to align the goals of the organization with the goals of the individual, making change possible. Provide employees with the necessary skills training and reward them for improved performance, giving them both the knowledge and motivation to improve product quality and customer service.
Dear Sahan, 58 percent of executives surveyed agreed in a recent public survey by Deloitte Services that their current approach to performance management does not improve employee engagement or high performance. In reality, what they recommend is to have something more flexible, real-time, and individualized — and based on driving performance in the future instead of measuring it in the past. (Buckingham & Goodall, 2015)
ReplyDeleteAgreed Partially,Without the active involvement of employee managers, Even well-designed employee performance management systems will fail. The continued involvement of management and leadership throughout the performance management process demonstrates their commitment to the personal growth and development of their employees that will lead to improving employee engagement and high performance(Graber, 2011).
DeletePulakos (2004).Hi Sahan, I would like to mention a point about your topic, which is an interesting one. As Pulakos (2004) states, Performnce Management is definitely a common practice worldwide, which helps the organisations to improve themselves regularly. However, he further states that some managers do not effectively and honestly carry out the evaluations due to various reasons such as demotivation and personal relationships.
ReplyDeleteHi Shan, Agreed on mention point.To overcome this companies like Google have changed their performance appraisal system, abandoning traditional annual performance appraisals and focusing only on conversations with employees. However, there is no empirical research evidence that these new industry trends work, and experts recommend that human resources professionals adhere to sound psychological principles to provide information for an effective assessment system.These psychological principles include the need for feedback on performance and the ability to speak in the process(Rotolo et al., 2018).
DeleteDear Sahan , This article covers a highly important area and I agree that there is a great importance in the performance management. Based on my opinion, performance management is an important area which is used to evaluate the actions of the employees of an organization. Performance management makes an organization to achieve its objective in a higher pace and in an effective manner. Above blog explaining the depths of performance management seems really good which contains many information relating to performance management. Ulrich and Chandler (2016), has clearly pointed out that there is a greater usefulness in having a good performance management system within an organization in order to ensure achieving overall goals of an organization.
ReplyDeleteHi Sahan, I agree with your introduction. As you mentioned on the "Figure 2.0: Stages of performance Management development Cycle", it's required the have clear stage in order to manage the performance. This helps managers or supervisors and workers to work accordingly and set a clear evaluation from planning to rewarding. The company I work for is a leading IT company and it has a similar process to evaluate the performance.
ReplyDeleteSure Sahan, Performance management cycles based on of supervisors and workers with organizational goals (Russell and Russell, 2009).Through the perfect performance Management, at the end of the cycle supervisors could recognize the contribution of employees to the organization and by motivating them, organization obtain more contribution to achieve the goals objectives.
ReplyDeleteHi Sahan , 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.
ReplyDeletePerformance management cycle is normally align the efforts put by HR team (in my company) while all HR team is following up with employees to get done it on time. Performance management includes organizational goals and individual goals set by the individual team member & that has been approved by the reporting manager (in my company). This encourages all workers to provide their feedback in order to record the reporting manager's feedback.
ReplyDelete