PERFORMANCE MANAGEMENT

Performance Management

Performance Management

Introduction

The performance management process is a method of management architecture to assure that the organization and its entire resources are working collectively to optimize the organizations goals. Performance management provides a wide spectrum of understanding about performance drivers enabling an organization to compel for highest performance and better decision making. It highlights the importance of integration of human resource, process and information to the organization's goals and objectives.

Armstrong (2000) stressed that PM has become more and more important from the formally widely used performance appraisal scheme to today's an integrated and continues approach. PM in today's human resources (HR) practice is no longer depends on the merit rating form as the only measurement. However, PM defines strategic goals, and identified outputs to achieve strategic goals. Managers and employees are committed to achieve the identified outputs, and monitor outcomes. Furthermore, (Armstrong and Baron,1998; Schiemann and Lingle,1999) prove that, firms that adopted PM fares better in terms of financial, and non-financial factors than those firms that do not practice PM. Hence, the understanding of PM and its processes for today's firms is essential in determining and assuring its competitive advantage in the ever changing business environment.

Static And Dynamic Performance Appraisals

For effective performance management, performance appraisal should be dynamic. It should emphasise employee growth and development and the setting of new goals, not just judgemental decisions about performance. The evidence suggests that this kind of performance appraisal is 'more likely to be effective, credible and sustainable'. Yet, in practice, the evaluation of current employee performance remains the dominant purpose of performance appraisal.

Characteristics of a dynamic performance appraisal program

Dynamic performance appraisal programs are characterised by three key qualities:

goal establishment

performance feedback

performance improvement

Good performance measurement is an absolute necessity for effective feedback. Feedback in ture is also necessary for a quality goal-setting program because it allows employees to see hwo well they are performing and helps them to set new goals. Setting goals without establishing a way of measuring achieement if useless(Erdogan, 2002). Nevertheless, it is critical that there is not an overemphasis on quantity at the expense of quality. If well designed, goal-setting programs can be powerful tools for inceasing employee motivation and performance.

Performance Management Process

Through PM process, employees' talent, strengths, as well as areas which require improvements are clearly identified. (Mwita, 2000)This will ensure that employees are well prepared for career advancement. The process of performance management consist of mainly five major steps as illustrated in the summary of the performance management process (UCSD Human Resource Department).

Performance planning is the initial stage for Performance Management Process (PMP), manager are highly involved goal setting and job defining (Lock and Latham, 1990). Definition of job responsibility for all levels of staffs is identified during this initial stage. Thus, employees are cleared of their task and they have a better understanding towards the direction of the organisation. Through the high involvement and participation of employees, standards of performance are then identified. As a result, both the managers and employees are able to establish the ...