Performance Management
Introduction
The overall 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 (Armstrong
& Baron ,2005)
Performance management: Evolution
The above diagram represents how the PMS have undergone major shifts through its competencies. Figure 1
Performance management process
Performance management helps improving the competency of
the teams and individuals and provides continuous achievement to the
organizations (de Waal, Hafizi, Rahbar, & Rowshan, 2010; Amerstrong &
Baron, 1998).
human capital, thus enhancing organizational capability and
the achievement of sustained competitive advantage. (Michael Armstrong, 2010).
The Performance management system does not mean to evaluate
employees’ performance at the end of year or any specified point of time, but
it is an on-going process, which starts from plan, Act, Monitor, and Review. (Armstrong
& Baron, 2005)
Plan : Agreeing objectives and competence requirements ,
identifying the behaviors required by the organization, producing plans expressed
in performance agreements for meeting objectives and improving performance ,
preparing personal development plans to enhance knowledge, skills and
competence and reinforce the desired behavior.
Act: carrying out the work required to achieve objectives
by reference to the plans and response to new demands.
Monitor : Checking on progress in achieving objectives and responding
to new demands; treating performance management as a continuous process – ‘managing
performance all the year round’ -rather than an annual appraisal event.
Review : holding a review meeting for a stocktaking assessment
progress and achievements, and identifying where action is required to develop performance
as a basis for completing the cycle by moving into the planning stage.
Performance Management in Action
Source - Armstrong, M. (2006).
Performance management: Key Strategies and Practical Guidelines
Performance management should not be treated as a
mechanistic system based on periodical formal appraisals and detailed
documentation. Thus there needs to be a declaration of intent, which states why
performance management is important, how it works and how people will be
affected by it. When developing and operating performance management it is
necessary to ensure that it is regarded by all concerned as a joined-up process
in which performance and development planning recorded in a performance
agreement leads to continuous monitoring of performance against plans with
built-in feedback ( Armstrong, 2006)
Pfizer Inc performance management process
Raytheon performance development process
There are several indices that denote an effective performance management system (CEBMA, 2016). First, it is important to have year-round conversations with employees rather than a single annual performance review. When managers actively engage in conversations, this prepares the employees for performance feedback and they are more likely to accept the feedback that they receive because they have discussed their continuous progress with their manager.
One of the most important
elements of effective performance review is that employees accept and react
positively to feedback, especially when the feedback includes constructive
criticism (Murphy & Cleveland, 1995).
The second feature of an
effective performance management system is the use of more than one rater
within the system (CEMBA, 2016).
Source : Explores the changing trends in performance management over recent years. (2017), Jonny Gifford, Senior Advisor for Organisational Behaviour at the CIPD
Mangipudi,Rao., Prasad, KDV. ,Rajesh ,W., Muralidhar , V. (2020). Evolution of Performance Management Systems and the Impact on Organization‘s Approach: A Statistical Perspective. International Journal of Management, 11 (5), 2020, pp. 935-947, accessed <http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=5>.
Michael Armstrong, Kagan page india private limited, Hand book of Performance Management an evidence –based guide to delivering high performance, 4th edition ,2010.
Murphy, K.R. and Cleveland, J. (1995) Understanding performance appraisal: social, organizational, and goal-based perspectives. London: Sage.
Rotolo, C. T., Church, A. H., Adler, S., Smither, J. W.,
Colquitt, A. L., Shull, A. C., Paul, K. B., & Foster, G. (2018). Putting an
end to bad talent management: A call to action for the field of I-O Psychology.
Industrial and Organizational Psychology: Perspectives on Practice and Science,
11, 1.
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Well, Nayomi, Furthermore adding to your post, 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).
ReplyDeleteYes Krishan , Performance management is an important part of the SHRM in contemporary organizations. Performance management is concerned with creating a culture in which organizational and individual learning and development is a continuous process. It provides means for the integration of learning and work so that everyone learns from the successes and challenges inherent in their day-to-day activities (Armstrong,2006).
DeleteI would like to add below note as well .
ReplyDelete‘Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors’ (Armstrong and Baron, 4-2000)
The 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. (Armstrong and Baron, 4-2000)
Armstrong, M. and Baron, A., 2000. Performance management. Human resource management, 69.
Performance management has developed from a very operational focus to a more strategically oriented concept, i.e. where it plays an integral role in the formulation and implementation of strategy (Scott-Lennon, 1995).
DeleteTop managers, line managers, employees in general, and HR professionals are four groups whose dedication to performance management is critical to its success. Top managers, line managers, employees in general, and HR professionals are four groups whose dedication to performance management is critical to its success. Top managers take the initiative, set the standard, serve as role models, and create and implement performance-related core principles. In terms of establishing and enacting HR policies and procedures, front-line management or leadership played a critical role. Every person in an organization, from the top to the bottom, is subject to performance management, even if it is not a formal process. It has an impact on their income and future prospects, and in more formal systems, they participate in the formulation of performance agreements as well as the measurement and review of performance. Performance appraisal schemes were usually sponsored and managed by the HR department (Armstrong,2006)
ReplyDeleteIt is this strategic impetus which differentiates it from performance appraisal. Performance management seeks to align a number of processes (e.g. performance related pay systems) with corporate objectives (McKenna and Beech, 2008).
DeleteArmstrong (2021) defines performance management as a “systematic process for improving organizational performance by developing the performance of individuals and teams”. It should be a continuous process of identifying, measuring, and developing the performance of individuals and teams, managers must ensure that employee’s performance are aligned with the organizations goals as it helps employers gain a competitive advantage (Aguinis, 2019).
ReplyDeleteArmstrong, M. (2021). Performance management.
Aguinis, H. (2019). Performance management for dummies. John Wiley & Sons.
It is suggested that performance management represents possibly the greatest opportunity for a human resource (HR) system to make a telling contribution to organizational performance (Sparrow and Hiltrop, 1994).
DeleteAgreed and "the goal is to create an environment where people can perform to the best of their abilities and produce the highest-quality work most efficiently and effectively" (CARLA TARDI, 2022).
ReplyDeletePerformance Management is further hypothesized as an integrated system where management and employees work together in setting objectives, assessing and reviewing how these are being met and rewarding good performance. This requires ‘the ability to interpret the more abstract goals and objectives at board level into more practical operational goals and objectives at employee level to meet them’ (Chase and Fuchs, 2008: 226).
Deletein order to gain performance in an organization, some objectives must be achieved in order to get employee’s engagement beyond the organization’s expectations. The financial and Non financial benefits, promotions, and continuous pieces of training are important for the performance of both parts (Salas, et al., 2017).
ReplyDeleteAccording to Armstrong (1999), there are four principal normative concerns of performance management. First, is that it aims to improve performance. Second, it endeavors to develop employees. Third, it seeks to satisfy the expectations of the various organizational stakeholders. Finally, communication and involvement is imperative due to the ideology of arriving at jointly agreed goals and objectives.
DeleteBoth organization and individual wants performance appraisal to meet their individual KPIs and organizational overall goals and objectives. In some cases, these objectives or goals are compatible, but in many cases, they are not. KPIs are important to business objectives because they keep objectives at the forefront of decision making. It's essential that business objectives are well communicated across an organization, so when people know and are responsible for their own KPIs, it ensures that the business's overarching goals are top of mind. (Patrick Gunnigle Anthony Mcdonnell, 2008).
ReplyDeleteLinking performance to pay is a market-based approach to gaining employee commitment, whilst simultaneously helping ‘to align managerial interests with shareholder value and shift downside risk’ to the employees (Gospel and Pendleton, 2005: 17).
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DeleteHi , Naomi According to Tripathy, (2014) Complete performance management systems are great for meeting corporate objectives and creating a high-performance culture, as well as developing an effective, yet rigorous performance management procedure that matches your business plan to achieve important goals.
Reference
Tripathy, Mr.S. (2014). Talent Acquisition a Key Factor to Overcome New Age Challenges and Opportunities for Human Resource Management. IOSR Journal of Business and Management, 16(12), pp.39–43. doi:10.9790/487x-161223943.
Hi Naomi,
ReplyDeleteIn my experience "Performance" is often misinterpreted in most instances.
Employee performance is often judged by the end result delivered by employees. Results are the actual outcome of the employee's behaviour.
Therefore it's the behaviour itself which depicts the performance.
Employees shall be evaluated based on their behavior, the effort they put in, the methods they adopt and the attitudes they display in their journey to drive results.
Obviously, it's challenging to assess such qualitative factors in contrast to assessing plan KPI vs actual achievement.
This requires a holistic understanding of the total process, coaching and mentoring skills and providing constructive criticism and active listing capabilities.
Performance means both behaviors and results. Behaviors emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviors are also outcomes in their own right the product of mental and physical effort applied to tasks and can be judged apart from results. Brumbrach (1988)
great introduction to the topic. Building on the points discussed by Armstrong (2014), one of the key focuses of performance management is making sure that the employees abide by the core values defined by the organization. At my current organization, the performance management is divided in to four key main areas as financial, client, process and people. Each of these areas have a focus on the alignment of the employee with the organizational values.
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