The need for performance management was never as important as it is today, the world of business is witnessing immense change, with the focus of Business, Employees and Customers seeing a transformation. Business wants their employees to be on the peak of their performance in serving the customers. Performance management is based on the principle of management by agreement or contract rather than management by command. It emphasizes development and the initiation of self-managed learning plans as well as the integration of individual and corporate objectives.
In a nutshell, Performance management is an HRM process that provides the basis for improving and developing performance and is part of the reward system in its most general sense.
The main objective of Performance Management is to work towards improving the Organizational performance by managing the performance of the individuals and teams with in the organization. Performance Management offers the means whereby Management of the organization tries to get better results by getting an understanding of the employee performance and the enhancing the performance within an agreed framework of planned goals, standards.
Performance management could be defined as
'A process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success.’ Weiss and Hartle (1997)
Performance Management System
Performance management is concerned with:
Bringing inline the individual objectives with organizational objectives and encouraging individuals to uphold corporate core values. The idea behind Performance Management is that individuals are completely focused towards Organizational objectives.
Enabling expectations to be defined and agreed in terms of role responsibilities and accountabilities (expected to do), skills (expected to have) and behaviors (expected to be);
Providing opportunities for individuals to identify their own goals and develop their skills and competencies. as the performance management processes would offer individual to have insight on their performance.
Difference Between Performance Appraisal and Performance Management
There are significant differences in Performance Management and Appraisals, where Performance Appraisals were Formal assessment and rating of individuals by their managers at or after a review meetings, it has been described to operate as a top down and bureaucratic system. It is sometimes referred to as a dishonest annual ritual. Whereas in contrast Performance Management is a continuous and much wider, comprehensive and more natural process that clarifies mutual expectations, emphasizes the role of managers who are expected to act as coaches and the focus is on the future.
Performance appraisal can be defined as the formal assessment and rating of individuals by their managers at or after a review meeting. It has been discredited because too often it has been operated as a top-down and largely bureaucratic system owned by the HR department rather than by line managers. Armstrong and Murlis (1998) asserted, performance appraisal too often degenerated into a dishonest annual ritual’.
In contrast performance management is a continuous and much wider, more comprehensive and more natural process of management that clarifies mutual expectations, emphasizes the support role of managers who are expected to act as coaches rather than judges and focuses on the future.
Armstrong, M (2006) Performance Management, 3rd edn, Kogan Page, London.
Armstrong, M and Murlis, H (1998) Reward Management, 4th edn, Kogan Page, London.
Weiss, T B and Hartle, F (1997) Re-engineering Performance Management, Breakthroughs in achieving strategy through people, St Lucie Press, Boca Raton, FL