Managing the Performance of the employee is the most important function
of HR (Human Resource). Performance Management is “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 ability of the people” (Armstrong, 2014 p.331)
Performance management cycle
Figure 1: Performance management cycle
Source: https://www.toolbox.com/hr/performance-management/articles/what-is-performance-management/
Planning
– This stage entails setting
employees’ goals and communicating these goals with them.
Monitoring
– In this phase, managers are
required to monitor the employees’ performance on the goal.
Developing
– This phase includes using the
data obtained during the monitoring phase to improve the performance of
employees.
Rating
–Each employees performance must be rated
periodically and then at the time of the performance appraisal.
Rewarding
- full-scale employee rewards
program that regularly recognizes and rewards excellent performance in the
organization.
Performance Management
Objectives in HRM
· Employees
achieve the company goals
· It
helps to identify the skills and knowledge required to perform a job
efficiently.
· Important
factor to motivate employees and increase employee empowerment
· It
provides the goal setting process more transparent.
· It
identifies the issues which leads the low performance and also resolve the
issues by providing suggestion about development interventions.
· It
provides data for several important decisions such as promotions, strategic
planning, succession planning and performance based compensation.
Advantages of
Performance Management System
·
Helps to create a formal structure of
communication between supervisor and employee. It also supports bringing out
solutions for the improvement of employee performance.
·
Using the performance management system,
respective managers can clarify the performance and behavior expectations which
all employees should understand for achieving organizational goals.
·
The performance management system helps
to make concrete decisions regarding annual planning of hiring, training and
development practices, and also goal settings.
·
It helps employees to know the feedback
about their performance in the organization for further improvement.
·
Performance management system data can
be used to develop a comprehensive compensation strategy for motivating the
employees to get improved performance.
Disadvantages of
performance management System
·
The system can create a negative
experience for the employees, if the performance appraisal is not done in a
fair way and feedback is conveyed in a wrong way.
·
Time consuming activity for the managers
to evaluate and manage the performance of hundreds of employees working the
organization.
References
Armstrong, M and Taylor, S. (2017)Armstrong’s Handbookk o Human Resource Management Practice. London: Kogan Page
HrHelpboard. (2012). What is Performance Management Definition, Types, Objectives, Purpose in HRM. [online] Available at: https://www.hrhelpboard.com/performance-management.htm.
Toolbox.com. (2021).
[online] Available at:
https://www.toolbox.com/hr/performance-management/articles/what-is-performance-management/#lg=1&slide=0
[Accessed 11 Nov. 2021].
Dear Imashi
ReplyDeleteA very good blog post that is informative. As you discussed the justification of the performance appraisal is vital since it may result in communicative issues and I agree that it is a disadvantage of Performance Management System. My suggestion is that Morale and a retention mechanism need to be generated in such occasions by the organization.
Great post by the way! Cheers!
Thank you..
DeleteGood explanation. Would like to add some more disadvantages of performance management system. There is a risk of internal competition,favoritism and the process could be expensive and time consuming.
ReplyDeleteThank you..
DeletePerformance Management in HRM is very useful for every organization. As you explained there are few disadvantages as well. generally this is good concept to practice. good explanation with point outs. valuable one.
ReplyDeleteTrue, it is important to have a structured Performance Management and tracking process to maintain a high standard for your organization.
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ReplyDeletePerformance management can indirectly talk to the employee about what organisation expect from the employee.
ReplyDeleteVery true, Performance measurement is used to motivate managers to make decisions that benefit the corporation and themselves. ... This makes it easier to align the goals of the manager with those of the organization and to design effective performance measures.
DeleteIt has clearly explained about the theories of performance management in HRM and its advantages and disadvantages for an organization.
ReplyDeleteThank you.
DeletePerformance management supports employees' current and future, and future performance, and deals with what they can do to achieve their future goals. Performance management helps increase employee engagement and productivity ... Dedicated employees stay longer and actively participate in goals
ReplyDeleteYes, Together with goal setting, frequent feedback lets employees know they are valued, which increases their commitment and performance.
DeleteContinuous performance management fosters a ongoing dialogue and an atmosphere of trust, support, and encouragement. It also aids in the development of a relationship between the employee and the company. If an employee knows that their manager and the company care about what they are doing and are dedicated to help them do better and advance their career, they are far more likely to engage with the company.
ReplyDeleteAgreed, it is important to the success of an organization because employees help drive revenue. When employees are treated properly and given the proper guidance and tools, they can help reduce costs while also boosting sales and revenue
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