12 Apr Performance Management Overview
Effective performance management is often cited as the most vital component of organisational success, and hence ensuring it takes place is very important to any company. Whether it is ensuring targets are reached, deadlines are met or quality is maintained at a high level, ensuring your employees maximise their performance is crucial for the output of the organisation. It is important to recognise and emphasise the link between an individual’s performance and the effect this has on the organisation. This helps to align everyone’s goals and objectives with the organisation and acts as useful motivation and engagement tool.
Armstrong and Baron (1998) define performance management as a “systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results from the organization, teams and individuals by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements.”
Towards the end of the 20th century performance appraisal, where the output of employees would be compared with their objectives and their peers, started to gain popularity. It is now common for a cycle of activities to exist within an organisation, aimed at aligning individual and organisation goals, monitoring performance and improving performance. The key models of performance management (Torrington and Hall, 1998) agree that expectations should be determined at an early stage and should be supplemented by support, review and appraisal stages, before finally a re-assessment.
Armstrong and Baron (1998) outline what they believe to be the five key aims of any performance management programme.
1. Shared vision – all members of the programme should share the same vision and this should align with the organisation’s objectives.
2. Expectations – it is important to outline exactly what is expected of employees, as this gives them direction and purpose.
3. Define high performance – often employees aim to improve performance, but are not aware of what high performance actually is and how it can be achieved. A clear explanation can be helpful here.
4. Motivation and engagement – clear performance management objectives should act as a motivation tool for employees and improve their levels of engagement. Employees are more willing to work hard when they understand exactly what is asked of them and why it needs to be done.
5. Ownership and responsibility – once individuals have been given specific targets they feel more responsible for their work and this can produce higher quality output.
Despite having seemingly very positive implications for an organisation, performance management strategies can also cause problems. One of these is their complexity. Any performance management strategy will involve a number of different actors and a number of rounds of review. This can lead to a long process that absorbs many resources and hence an inefficient strategy will cost an organisation greatly. A lack of senior management involvement, an underlying poor performance culture and individuals unwilling to give honest reviews can also have negative implications.
There is a wide range of components involved in a complex performance management strategy, ranging from self-appraisals, 180/360 feedback, balanced scorecard and performance related pay, to name a few. They will all be examined in great detail throughout this module.
It is a common mistake of managers to believe poor performance will be entirely eliminated by a performance management strategy. Due to poor health, motivation or skills some level of low performance is inevitable, and it is important to accept and plan for this. Poor performance should be spotted as an opportunity to learn and improve, rather than a reason for criticism.
An efficient and effective performance management strategy is vital for maximising employee performance and subsequently bring an organisation success.
Armstrong, Michael, and Angela Baron. (1998). Performance Management. London: Institute of Personnel and Development, 1998. Print.
Cave, A and Thomas, C. (1998). The Reward Portfolio. The Training Directory, 1998. Print.
Torrington, Derek and Laura Hall. (1998). Human Resource Management. London: Prentice Hall Europe, 1998. Print.