Benefits and Drawbacks of Performance Management
High-performance organizations need effective performance management systems to promote and develop the values, principles, and skills needed to maintain optimal results (Sahoo and Mishra, 2012). High-level performance management helps ensure that the overall goals of all are met (chandler, 2016). An efficient and good performance management system always strives to broadly improve corporate performance (Cardy and Leonard, 2014).
A good performance management system
works to improve overall organizational performance by managing the performance
of teams and individuals to ensure the overall organizational aspirations and
goals are achieved (Armstrong and Tylor, 2014). The
benefits of a performance management system contribute to all aspects of the
organization, whether it is employee benefits or managerial benefits. The
performance management system has a positive sense of employee job satisfaction
and loyalty (Buchner, 2007). Performance goals require development goals and
evaluation goals. Good and effective performance management requires clear
objectives and a constant assessment of individual performance, which helps
employees determine the training and development plans they need (Buchner,
2007).
Organizations can still rely on the benefits of performance
management on the assumption that people are more likely to respond positively,
and that if they participate in the processes of defining and reviewing
expectations, they are more likely to improve their performance and develop
their capabilities. Performance and competence against those expectations, and
involving the design and execution of plans to develop their skills and competencies
(Armstrong and Tylor, 2014). A reliable performance management system should provide the employee and
the employer with the ultimate benefits of each other's goals.
Implementing a faster approach to performance management has several key
benefits (Mattone, 2013). According to Russell and Russell (2009) the benefits to employees and
employers are as follow.
Employee Benefits
- Performance management systems help employees self-assess, improve opportunities, define career paths, and help employees achieve job satisfaction.
- The performance management system includes a reward mechanism that, in the form of rewards or performance bonuses motivates employees to work better and achieve organizational goals.
- The performance management system ensures that each employee’s expectations and determines whether the employee has the skills and support needed to achieve the desired outcome.
- The performance management system provides a wealth of learning opportunities, provides leadership attitudes, and helps employees grow their careers.
- Ensuring proper aligning or linking of objectives and facilitating effective communication throughout the organization.
- Facilitating a cordial and harmonious relationship between an individual employee and the line
manager based on trust and empowerment.
Employer Benefits
- Recognizing and rewarding good performance in an organization.
- Establishing clear performance objectives by facilitating open communication and a joint dialogue.
- They help document personnel decisions such as promotion and discipline.
- Regularly providing open and transparent job feedback to the employees.
- Providing ample learning and development opportunities by representing the employees in leadership development programs, etc.
- Performance appraisal helps to record payroll activities.
- Providing maximum opportunities for career growth.
- Performance assessment helps determine training needs.
- They assist management in making decisions to retain or terminate.
Drawbacks
of Employee Performance Management
- Employees
may lose self-confidence - If it is observed that employees
are being unfairly evaluated, they may lose their self-esteem and this will
lead to resentment toward management and the organization.
- The
poor standard will make the process unfair - v If there are no proper performance
standards in line with employee goals, an employee is in a conflicting position
justifying poor performance versus excellent.
- Insufficient
management expertise - Even
if the management of the company is given enough knowledge and time, they often
have weaknesses and, in reality, when the laws are enforced, negative aspects
will emerge. The main reason for this is a lack of management and management
knowledge.
- Lengthy and complicated - Managers are instructed to spend
hours with each employee to assess their performance. The organization is made
up of a large number of people and it takes a long time to evaluate the
performance of the entire department. Once employee difficulties and errors are
identified, longer meeting hours will be needed to resolve issues.
- Employees may resign due to unfair results - If an employee is well-behaved and then feels that he/she has been unfairly assessed, his / her motivation to stay in the company is minimal. Even if the employee does not leave the company, he/she may be isolated.
- Incorrect or misleading information may affect the review - Assessing without including performance data can make it difficult to accurately identify an employee's condition. The manager or co-worker may misrepresent the performance by providing false or misleading performance information.
Conclusion
When
designing an accurate employee performance appraisal, the benefits and drawbacks
should be considered, as well as minimizing barriers directly to minimizing the
risk of employee frustration. Successful employee performance management
empowers partners to lead an organization to achieve its goals. Most
importantly, the right resources are needed to implement and maintain an
effective performance management system and to invest in professional
development.
References
Bourne, M. and Bourne, P. (2012) Handbook of corporate performance management. John Wiley & Sons.
Buchner, T.W. (2007) Performance management theory: A look from the performer's perspective with implications for HRD. Human Resource Development International, 10(1), pp.59-73.
Chandler, M.T. (2016) How performance management is killing performance—And what to do about it: Rethink, redesign, reboot. Berrett-Koehler Publishers.
Cardy, R. and Leonard, B. (2014) Performance Management: Concepts, Skills and Exercises: Concepts, Skills and Exercises. Routledge.
de Waal, A. and Kourtit, K. (2013) Performance measurement and management in practice: Advantages, disadvantages, and reasons for use. International Journal of Productivity and Performance Management.
Mattone, J. (2013) Powerful Performance Management. 1st edn. New York: Amacom.
Russell, L. and Russell, J. (2009) Ultimate performance management: training to transform performance reviews into performance partnerships. 1st edn. USA: American Society for Training and Development.
Sahoo, C.K. and Mishra, S. (2012) Performance management benefits organizations and their employees. Human Resource Management International Digest.
It can be concluded that the Organizations that have enforced a performance management system, perform each financially and non-financially higher than organizations that are not using any performance management system(Radu,2009).
ReplyDeleteAgreed with the above comment. As discussed by Kumar and Pansari (2015) performance management is the continuous process of managing the performance of individuals to achieve the desired results. High-performance organizations need effective performance management systems to promote and develop the values, principles, and capabilities needed to maintain optimal results.
DeleteThe second paragraph of this article is further supported by Paauwe and Boselie (2005) with several other factors added to it as; "a real contribution to performance (in its multidimensional meaning) will happen only once we approach HRM from a more holistic and balanced perspective, including part of the organisational climate and culture, aimed at bringing about the alignment between individual values, corporate values and societal values. This will be a unique blending for each organisation, which is difficult to grasp by outsiders (including competitors) and thus contributes to sustained competitive advantage."
ReplyDeletePaauwe, J. and Boselie, P., 2005. HRM and performance: what next?. Human resource management journal, 15(4), pp.68-83.
Yes, Ruwini, More adding to your comment, Performance management can play a key role as employees can be recognized and rewarded for their excellent performances and also identify the skills that are lacking in the organization that will help to boost the organization’s performance (Armstrong and Taylor, 2014).
DeleteAgreed with your comment Hasara. By Rewarding encourages employees to perform well as they see a direct link between performance and rewards. This keeps the employee motivated to perform beyond their capabilities. Effective incentives can be provided for employees who perform well, promotions…etc. (Bhattacharyya, 2011).
ReplyDeleteAdding to your points, “Performance management is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization”. These are some of the advantages of performance management outlined by Aguinis (2019), Motivation to perform is increased, Managers gain insight about subordinates, Self-insight and development are enhanced, Employees become more competent, Employee engagement is enhanced, Motivation, commitment, and intentions to stay in the organization are enhanced.
ReplyDeleteAguinis, H. (2019). Performance management for dummies. John Wiley & Sons.
Employees are performing an activity for its own sake rather than from the desire for some external reward. The behavior itself is its own reward (Scott Snell, George Bohlander, 2012).
ReplyDelete