Performance management entails fixation of organizational objectives in accordance to the employees’ skills, development plan, agreed measures, competency, skills and results delivery (Cardy and Leonard 2014). Employees and managers work hand in hand in monitoring, planning and reviewing the employees’ contribution to the firm and their work objectives. Performance management emphasizes on learning, improvement and development with an aim of meeting the desired goals in the organization by ensuring a productive labour force. This process dates back to six decades where its initiation was due to the need to justify payments and development of knowledge and skills. Conclusions were drawn that some people were getting paid more than their actual contribution to the organization whereas others were unfairly compensated.
Characteristics of a Good Performance Management System
An effective Performance Management process should be one that links the objectives of an employee to the strategic plans and mission of the organization and inform him/her on how to aid in achieving the objectives of the business (DeNisi and Smith 2014, p.133). Development plans should be clearly defined in the process so as to familiarize the employee with the objectives of the firm. These objectives and expectations that the firm desire to achieve should be set in conjunction to actions, results as well as the behavior of different employees.
Regular discussions should also be held throughout which would include mentoring, assessment, coaching and feedback on specific jobs out of the diverse jobs in the organization. An effective system should provide training to its employees through arranging seminars and workshops for them to develop their skills thus improvement of their general performance (Daniels, Tapscott and Caston 2011).
It should be inclusive of a constructive feedback whenever there arise need for improvement as well as a positive feedback in the event that a job is done well (Kearney 2018). Administrative decision-making should be supported by the system about termination, rewards, promotion and compensation. An organization that recognizes the efforts of its employees is guaranteed to have high returns in their production since the employees happen to be well motivated to work.
An effective Performance Management System should have indicators and objectives which meet a SMART test. They should be Specific such that they clearly show what to be done, who is assigned the task and the magnitude to be accomplished. They should be Measureable in that they are able to answer questions like; how many? How much? How will I know the completion date? Qualitative, quantitative, cost and time frame measures should be employed if possible. Objectives should be Attainable rather than them being mere speculations. They should be Realistic such that they match the complexity level of employee’s capability and experience. Finally, they ought to be Time-bound in that they time frame needed to achieve them is clear (Cardy and Leonard 2014).
Advantages of Performance Management
Performance management has been praised due to the benefits that it bestows to the employees as well as the organization. Correct implementation of Performance Management in relation to specific objectives of the organization will result to positive outcomes. Some of the advantages of Performance Management are;
Improvement of communication
Under an effective system, communication between an employee and the employer is more frequent. The two parties are able to agree on objectives that may be subject to change hence suiting priorities and conditions of the organization (Buckingham and Goodall 2015, p.42). The employee feels appreciated by being involved in decision making. Frequent communication will help the employee stay in context to the goals and objectives of the firm for timely and relevant results.
Some mistakes may happen to be small and negligible but exhibit great influence on the organization’s goals. Through Performance Management, these mistakes are easily noticed. Ignoring them would be detrimental to the performance of the company (Van Dooren, Bouckaert and Halligan 2015). Proper evaluation helps the employers acquire feedback on the subject and how to deal with it. Creation of awareness of existence of a problem faced by the company helps formulate solutions thus maintaining achievement of the organization’s goals.
Ensures Employee’s Progress
An organization is responsible for guiding its new employees into its system for them to acquire competence and efficiency (Daniels, Tapscott and Caston 2011). New employees hold little or no knowledge about how the organization operates. Performance Management ensures that inefficiencies of employees are observed and rectified via correct measurement thus aiding attainment of a successful organization’s planning.
Motivation of Workers
Recognizing the positivity of the workers cheers them up. Criticism accompanied by approval encourages and motivates the employees to do better. When conducting performance appraisals, explanation of all confusions prepares a platform for conducting proper researches on areas of difficulty so as to give relevant solutions to the workers (DeNisi and Smith 2014, p.140). Encouraging evaluations highlights the traits of an employee and avails his/her errors for rectification.
Identification and Removal of Insincere and Lazy Workers
There exists some workers who lack commitment to work under the required standards of the organization. These under-performance are usually identified by an effective system and removed if they consistently refuse to work under the availed guidelines (Shields, Brown, Kaine, Dolle-Samuel, North-Samardzic, McLean, Johns, O'Leary, Robinson and Plimmer 2015). Incorporating them would slow the progress of the company hence low productivity.
Compensation for Successful Employees
Bonuses and remunerations given to employees by their companies provide inspiration for a better performance (Van Dooren, Bouckaert and Halligan 2015). Workers will regard compensation with appreciation for their hard work by the company. With inclusion of encouragement words from seniors and managers, monetary incentives will encourage workers to establish better performance
Documented Performance History of the Employees
The existence of Performance Management in an organization enables the human resource department to store the employees’ history of performance for easy monitoring of their working progress. In the event of an employee’s decision to look for ‘greener pastures’, his/her documented progress record will be essential in presenting a good recommendation letter from the previous firm (Mone and London 2018).
Permits Worker Development
Evaluation of employees’ progress creates an interaction which encourages them and yields to new ideas which ensure the company’s progress (Podgórski, D., 2015, p.149). Performance management advocates for positive aspects of the employees such as professionalism and discipline. Organizations that flourish have a good Performance Management System.
Disadvantages of Performance Management
Performance management has been criticized for its disadvantages which it may tend to impose on the organization and its employees. Some of these disadvantages include:
Complexity and Length
It takes long to evaluate a department’s performance with evaluation of a single employee approximating to an hour. The larger the department, the longer the period of evaluation. After evaluation, managers have to hold discussion meetings to find solutions to errors and difficulties realized (Mone and London 2018).
Hinders the Employee’s Progress
An employee may feel dissuaded and discouraged in the event that the employer tends to emphasize so much on his/her mistakes and overlooks the achievements. When enough due for hard work is not given to employees, the experience of Performance Management becomes stressful and unpleasant hence hindering their progress (Buckingham and Goodall 2015, p.47).
Favoritism and Partialities
In the event that a company’s managers are partial and favors others, the process of performance management is hampered. A manager who exhibit preconceived notion evaluates employees’ performance based on bias (Shields, Brown, Kaine, Dolle-Samuel, North-Samardzic, McLean, Johns, O'Leary, Robinson and Plimmer 2015)
Employees Suffer Low Self-esteem
A faulty Performance Management System may cause frustrations to ethical workers and lose their sense of worth in the process where unethical means are adopted to succeed. People result to loss of faith in the company (Hervani, Helms and Sarkis 2005, p.332).
Misleading and Contradictory opinions in Performance Management file
In the event that the manager fails to keep proper records on employees’ performance, a gap is created between the manager’s report and the actual performance of the employee. This in turn will reflect a misleading and contradictory performance management report of the workers by the firm (Tarí, Pereira-Moliner, Pertusa-Ortega, López-Gamero and Molina-Azorín 2017, p.37).
Conditions and Standards with Flaws
When an organization commits errors in creating a Performance Management System, the system is regarded meaningless and insignificant thereof (De Waal, Kourtit and Nijkamp 2009, p.1247). The actual performance of employees should be reflected by effective standards. When there exist norms that enable an employee to adopt unethical advantages to achieve progress, the system is thus rendered ineffective and may lead to set-backs in the company.
How to Improve Performance Management
The following procedure should be adopted in order to improve Performance Management System:
Assessing the Current Situation
One should seek a diverging and converging insight on a subject in context from consultation with an organization’s senior management, employee representatives of various units, decision makers and executives of human resource (Kerzner 2017). Familiarization with the subject allows for easy handling of the task for efficient results attainment.
Sharing your findings
Everything acquired from assessment process should be presented to the senior management such that necessary recommendations may be approved. Superiors should have knowledge to what your research yielded for them to gauge its relevance to the company (Hersey, Blanchard and Johnson 2007).
Defining your Goal
You should be aware of the objective you intend to achieve. Many companies usually advocate for meaningful talks between employees and managers, support career development and better skills, foster collaboration, realizing employees’ full potential among others with an aim of improving the performance of the employee thereof (Tarí, Pereira-Moliner, Pertusa-Ortega, López-Gamero and Molina-Azorín 2017, p.37).
Creating an Action Plan
This involves deciding on changes and putting practices in place. Movement from current situation to a desired one should be actualized by application of changes, while needs addressed by previously consulted individuals should be addressed. These changes may be significant or not but what matters is improvement or refining of existing elements (Podgórski, D., 2015, p.150).
Communicating and Validating Changes
Communication ought to focus on the reason for change, new features, and objectives. Managers and employees should be trained accordingly and a date set for the changes to be implemented. In most cases, implementation is done at the beginning of the reference year (Kerzner 2017).
Implementation of the Plan
You should include at least one party from the project’s team as well as involve representatives of various department in the implementation where consent should be acquired from the senior management. The impacts implicated to the organization by the changes shouldn’t be underestimated (Kearney 2018).
Making a Follow-up
Find out whether the ongoing plan is producing results which boost performance and the overall organization’s success. There should be a need to refine, adjust and then improve where necessary.
A good Performance Management System is very vital to the operations of an organization. It creates a healthy relationship between the employer and employee whereby everyone performs their obligation for the betterment of the organization and maximization of others welfare (Hersey, Blanchard and Johnson 2007). While others may criticize its existence, it should be noted that only a poor Performance Management System would be detrimental.
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