Purposes of performance management system
According to Armstrong and Baron (2005, p.2) the purpose of
performance management is to contribute to the achievement of high performance
by the organization and its people. “High performance” means reaching and
exceeding stretching targets for the delivery of productivity, quality,
customer service, growth, profits, and shareholder value. The main purpose of
performance management is narrowly defined as the achievement of the strategic
objectives of the organization through three basic principles. These are
administrative functions such as enhancing individual employee performance,
employee development, and compensation (Maley, 2013).
Performance management systems serve a variety of purposes.
The information gathered by a performance management system is widely used in
payroll administration, performance feedback, and identification of workforce
strengths and weaknesses (Aguinis,2013). In general, performance management
systems can serve six purposes. Those are strategic, administrative,
informational, developmental, organizational maintenance, and documentation
purposes (Aguinis, 2019).
Strategic Purpose
According to Aguinis (2019, p.6) The purpose of performance management systems is to enable top management to achieve strategic business goals. By linking organization goals with individual and team goals, the performance management system strengthens behavior in line with achieving organizational goals. The strategic purpose of performance management systems is that they play an important role in the onboarding process (Cascio and Aguinis, 2005). Performance management stimulates onboarding because it allows new employees to understand the types and outcomes of value and rewarding behavior, and to gain an understanding of the organization's culture and its values (Bhattacharyya, 2011).
Administrative Purpose
A performance management system provides valid useful
information for making administrative decisions about employees (Aguinis,
2019). Such administrative decisions include salary adjustments, promotions,
employee retention or termination, recognition of superior individual
performance, identification of high-potential employees, identification of poor
performers, layoffs, and merit increases (Mattone, 2013).
Informational
Purpose
Performance management systems serve as an important communication tool. Educate employees on how they do and provide them with information on specific areas for improvement. Provide information about the organization and the supervisor's expectations and aspects of the work that the supervisor believes are most important (Aguinis, 2013).
Developmental
Purpose
Feedback is an important component of a performance management
system (Aguinis, 2019). Feedback allows you to identify strengths and
weaknesses as well as the causes of performance deficiencies. Managers can use
feedback to train employees and improve performance continuously. Organizations
should strive to create a "feedback culture." Employees receive
information about themselves that can help them personalize their career paths (Aguinis,
2019). Feedback allows you to identify strengths and weaknesses as well as the
causes of performance deficiencies. Managers can use feedback to train
employees and improve performance continuously. Organizations should strive to
create a "feedback culture." Employees receive information about
themselves that can help them personalize their career paths (Armstrong and
Taylor, 2014).
Feedback is an important component of a performance
management system (Aguinis, 2019). Feedback allows for the identification of strengths
and weaknesses as well as the causes for performance deficiencies. Managers can
use feedback to coach employees and improve performance on an ongoing basis.
Organizations should strive to create a “feedback culture”. Employees receive information about themselves
that can help them individualize their career paths (Aguinis, 2019). An agreement on the provision of performance feedback and a personal development plan and a learning agreement as to the basis for field integrated analyzes of strengths, weaknesses, and improvements. (Armstrong and Taylor, 2014).
Organizational
maintain purpose
The performance management system is the provision of
information to be used in the design of the workforce. Workforce planning
consists of a set of systems that allow organizations to anticipate and respond
to manpower needs, set priorities, and allocate human resources at the right
place and at the right time (Aguinis, 2019). Performance management systems
include assessing future training needs, evaluating performance achievements at
the organizational level, and evaluating the effectiveness of human resource
interventions (Cascio and Aguinis, 2005).
Documentation
Purposes
It provides data that can be used to assess the predictive accuracy of newly proposed selection tools as well as important administrative decisions. Performance management systems allow you to document important administrative decisions, such as terminations and promotions. This information can be especially helpful in litigation (Bhattacharyya, 2011).
An example from the company I work
for:
When all the objectives of the performance management system
I have explained are taken into account, it is implemented within our
organization. At the end of each weekly production meeting, when we consider
the development purpose, information purpose, and documentation purpose,
we should present our daily product, including all the work we did throughout
the week and its outcome. For example, hourly production rate, machine pick-up
hours, rework report, customer complaint attendance report, waste report, and
orders on hand. Then our General Manager will give us feedback accordingly.
This helps us to identify our mistakes and identify the right path. This helps
us to get an idea of what management expects of us and allows us to speak for
ourselves from the employee's point of view, letting them know in which areas
we need help from management to complete tasks that we find difficult. Through
this collective data, they take the necessary action accordingly. For example,
if we do not have human resource management skills, they will organize training
programs. This information gathered is very important when evaluating
performance. Furthermore, quarterly meetings are held every three months,
taking into account our strategic, administrative, and organizational
objectives. Here, through quarterly presentations, management gains a clear
idea of whether or not the company's goals are being achieved in a way that
demonstrates all the output of our work. Based on the information, management will
make strategic decisions and, if necessary, will come up with a solution that
should be implemented to achieve the company's objectives. Further,
administrative decisions will be made regarding the performance management of
the individual, such as incentives, promotions, rewards, and the awarding of
prizes on the performance of employees through special offers. Through the
corporate vision, they identify the need to improve internal as well as
externally to take the company to the next level.
Conclusion:
Through the establishment of a proper performance management
system, there will be better coordination and understanding between the various
levels of the organization, in which the strategic goal of the organization
will be achieved and the objectives of the employees will be fulfilled.
References:
Aguinis, H. (2019) Performance Management. 4th edn. Chicago: Chicago Business Press.
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.
Bhattacharyya, D. (2011) Performance Management and Strategies. 1st edn. New Delhi: Pearson Education.
Cascio, W. Aguinis, H. (2005) Applied Psychology in Human Resource Management. 6th edn. Upper Saddle River, New Jersey: Prentice-Hall.
Maley, J. (2013) Hybrid purposes of performance appraisal in a crisis. Journal of Management Development.
Mattone, J. (2013) Powerful Performance Management. 1st edn. New York: Amacom.
ReplyDeleteKrishan, adding further to your article on benefits of Performance management , I have listed out the possible outcomes from Effective Performance Management according to Pulakos(2004).
• Clarifying job responsibilities and expectations.
• Enhancing individual and group productivity.
• Developing employee capabilities to their fullest extent through effective feedback and
coaching.
• Driving behavior to align with the organization’s core values, goals and strategy.
• Providing a basis for making operational human capital decisions (e.g., pay).
• Improving communication between employees and managers.
Thank you, Naomi, 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).
Deletein order to gain performance in an organization, some objectives must be achieved in order to get employee’s engagement beyond the organization’s expectation. The financial and Non financial benefits, promotions and continuous trainings are important for performance of both parts (Salas, et al., 2017).
ReplyDeleteYes, Harshani. According to Armstrong (2010) performance is the key and reward can make a significant contribution to achieving high performance by enhancing engagement.
DeleteShields(2007) talks of four folds of purposes of PMS.
ReplyDelete1 Strategic communication – convey to people what doing a good job means and entails.
2 Relationship building – create stronger work relationships by bringing managers and those they manage together regularly to review performance achievements.
3 Employee development – provide performance feedback as a basis for the joint analysis of strengths, weaknesses and areas for improvement and an agreement on a personal development plan and learning contract.
4 Employee evaluation – assess the performance of employees (performance appraisal) as a basis for making decisions on job reassignment, promotion or performance-related reward.
Armstrong, M., (2021) says that he overall aim of performance management is to establish a high-performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership. Its key purpose is to focus people on doing the right things by achieving goal clarity.
ReplyDelete