Introduction to Performance Management
Performance management is the process used to ensure an organization connects its mission with the work of its employees. The activities of performance management include performance appraisal, where managers provide feedback to employees. As defined by Aguinis (2019, p.4) 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.
According to Armstrong (2009, p.9) define performance
management is “A systematic process for improving organizational performance by
developing the performance of individuals and teams. Performance management is
a highly valued person who contributes to the realization of cultural change
and integrates it with other major human resource activities, particularly
human management capital, skills management, learning and development, and reward
management (Armstrong and Taylor, 2014).
Performance management is the result of an evolution based on the findings of different individuals over a century ago. Today, all companies use "performance management" to develop their human resources, skills development, skills requirements, and staff motivation to achieve their organizational goals. This will help the employer to identify employee degradation and complications and take appropriate action to avoid the situation (Armstrong and Baron, 2005). The primary goal of performance management is to establish a high-performance culture within responsible individuals and groups. It enables businesses and organizations to improve their business processes, improve the skills of their individuals and increase their productivity (Armstrong and Tylor, 2014).
Evolution of performance management system
The beginning of the evolution of “performance management”
is not certain, but World War 1 can be traced back to one of its turning points
(Harvard Business Review, 2016). The term “performance management” was first
heard around the 1970s. It was first published by Beer and Ruh in their thesis
(Armstrong and Baron, 2005).
Performance Management Cycle
The performance management cycle consists of several stages. This is based on the fact that the person is receiving and using feedback that is updated by the feedback orientation (London and Smither, 2002). Furthermore, an effective performance management cycle aligns the efforts of managers, supervisors, and workers with organizational goals (Russell and Russell, 2009). Many employers or managers now view performance management as a continuous cycle of activities that link an organization's culture, business goals, and strategies to individual performance and contribution (Mattone, 2013).
Figure 1.0: Performance Management Cycle
Source: (Armstrong,2014).
According to Armstrong (2014) figure 1.0 builds up according
to Deming’s Cycle and is described below.
PLAN – Performance planning is based on performance agreements. An important part of performance planning is the process of aligning individual goals with the strategic goals of the organization. Corporate employees are set up with SMART objectives that coincide with one or more corporate goals.
MONITOR – This is related to continuous feedback,
coaching, and dealing with under-performers.
REVIEW –
According to Harvard Business Review (2017) there are 5 stages of the performance management cycle. Those are,
Planning - Organization employees are set with SMART objectives which aligned with one or more company goals.
Developing - Increasing the capacity to perform through training, giving assignments that introduce new skills or higher level of responsibility, improving work processes or other methods.
Monitoring and Performing - Consistently measuring performance and providing ongoing feedback to employees and workgroups on their progress toward reaching their goals
Reviewing – Review is the evaluation of the performance of an employee or team based on the goals, criteria, and standards agreed upon during the design phase using multiple tools. Once identified, the focus is on the areas that need to be redeveloped, and the cycle returns to the planning stage.
Rewarding - If all intentions are achieved, it is time to reward employees. Giving incentives to employees and acknowledging their performance individually and as team members and their contributors. It helps to motivate them to get involved with other goals
References
Armstrong, M. (2006) Performance Management. 3rd edn. London: Kogan Page Publishers.
Armstrong, M. (2009) Armstrong's handbook of performance management: An evidence-based guide to delivering high performance. London: Kogan Page Publishers.
Armstrong, M. and Baron, A. (2005) Managing Performance. 1st edn. London: CIPD.
Armstrong, M. and Taylor, S. (2014) Armstrong's Handbook of Human Resource Management Practice, 13th edn. London: Kogan Page Publishers.
Business, H. (2017) HBR Guide to Performance Management (HBR Guide Series). Harvard Business Review Press.
Cappelli, P. and Tavis, A. (2016) The performance management revolution. Harvard Business Review, 94(10), pp.58-67.
Mattone, J. (2013) Powerful Performance Management. 1st edn. New York: AMACOM.
London, M. and Smither, J.W. (2002) Feedback orientation, feedback culture, and the longitudinal performance management process. Human Resource Management Review, 12(1), pp.81-100.
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.
Rewarding, which is a the final stage of the performance cycle in the Harvard Business Review (2017) ,act as a powerful motivator for employees, Through rewarding the employees will be recognized , advanced in career and their achievements acknowledged. According to Herzberg's two factor theory in motivation , motivators or intrinsic factors will increase employee satisfaction thereby decreasing the turnover intention. The existence of an effective performance management system will help organizations to reduce their employee turn over.
ReplyDeleteThis is another benefit to the employer from the rewarding stage in the performance management cycle.
Thank you Amal 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.
as stated in the SHRM Foundation, F F E C T I V E P R A C T I C E G U I D E L I N E S
ReplyDeletePerformance ( 2004) Performance Management Human resources management's "Achilles' heel" is performance management techniques, which typically involve performance appraisal and staff development. In many businesses, they have problems, with leaders and employers regularly criticizing their inefficiency. According to the SHRM Foundation Executive Briefing ( https://www.shrm.org/foundation/ourwork/initiatives/resources-from-past-initiatives/Documents/Four%20Questions%20the%20CEO%20Should%20Ask.pdf ) Only three out of ten workers feel that their company's performance management system helps them enhance performance, according to a Watson Wyatt survey. Less than 40% of employees stated their systems provide clear performance goals, provide honest feedback, or use technology to make the process more efficient.
Dear Upul, agreed with comment 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).
DeleteI have learned about valuable facts on performance management specially about the facts you present about performance Management Cycle. I thought evolution of performance management may go beyond world war 1 beacause pay for productivity has been practised over centuries ago which is "rewarding" an ultimate part of performance Management system where employees will encouraged to perform well.
ReplyDeleteBest Regards
Yea Indraneela, Adding to your comment, According to Chan and Lynn (1991), organizational performance criteria should include not only profitability, productivity, marketing efficiency, and customer satisfaction but also employee morale. In this perspective, employee performance is closely linked to organizational performance, and effective and efficient employee performance has a positive impact on organizational performance.
DeleteHi Krishan, Employee Performance Management is a key factor in Modern Strategic Human Resource Management. Adding to important facts you have given on Performance Management according to Smither and London ( 2009), Performance management is a "continuous process of identifying, measuring, and developing individuals' and teams' performance and aligning performance with the organization's strategic goals".
ReplyDeleteYes, Naomi. It is clear that performance management is a continuous cycle of activities, including planning, developing, monitoring, reviewing, and delivering benefits, building a link between corporate culture, organizational objectives, and strategies used to ensure individual performance (Mattone, 2013).
DeleteAgree with above points.Performance management is based on a well-established measurement system that includes tools, indicators, and procedures that have been carefully selected and tailored to individual conditions and organizational features (Jaksic, 2013)
ReplyDeleteThanks for the comment Theekshana, Adding to comment According to Kumar and Pansari (2015), performance management is the continuous process of managing staff performance 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.
DeleteAgreed that in order grab the maximum benefit of applying the principals of performance management for the success of the organization; it is vital to consider on key elements of Effective Employee Performance Management Review such as preparation, collaboration, positivity and action plan (Poole, 2013).
ReplyDeleteYes, Chathurika. Performance management is also a beneficial factor for all organizations, so at the beginning of the year the subordinates will clearly set out the desired goals of the organization so that the focus and effort of the organization can be subordinated and the benefits can be reaped by achieving it (Kureshi and Hassan, 2013).
DeleteYes, Hasara. The most effective performance results are when the goals are specific and challenging when it comes to evaluating performance and feedback on outcomes and building commitment and acceptance. The motivational influence of goals can be influenced by mediators such as ability and self-efficacy (Lunenburg, 2011).
ReplyDeleteKrishan, this blog has provided so much information and I have got a clear idea about performance management. Armstrong (2006), also stated that expectation management is at the heart of performance management. It establishes a shared understanding of what is required to improve performance and how it will be accomplished by defining and agreeing on what people are expected to do and how they are expected to behave and then using these agreements as the foundation for performance measurement, review, and the development of performance improvement and development plans.
ReplyDeleteAccording to Armstrong, M., (2021) Performance management can be defined as a systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results from the organization, teams and individuals by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements.
ReplyDeleteDear Krishan, as I agree to your comment, let me add something. The primary purpose of appraising and coaching employees is to instill in them the desire for continuous improvement. Yet the outcome of many performance appraisals is frequently a decrease rather than an increase in performance. Among the reasons for this decrease is the belief by employees that they are being evaluated on the wrong things, by the wrong person; that is, the person who is evaluating them lacks objectivity, and hence is not ‘‘fair.’’ Moreover, the feedback that is given to them is not seen as timely or constructive. Thus, it is not surprising that a performance appraisal often leads to legal challenges for the appraisers and the organization that employs them (Latham, G.P., Almost, J., Mann, S. and Moore, C., 2005).
ReplyDelete