Performance Management Cycle

This report has been prepared to analyze the performance management in a company. This report depict about the performance of a human or employee in an organization. It shows the significance of performance management in general life and in an organization. This report also tells the user about the factors which are affected by the performance management or which are affecting the performance management. The effect of performance has been analyzed in an organization. Problems and methods of performance management have also been analyzed. This report depicts the user about performance management.

Performance management is a procedure by which employees and managers work together to make strategies and plans, monitors and reviews the objective of employee and overall contribution in the organization. Performance management is a fundamental goal which is used to promote and enhance the effectiveness and efficiency of employees (Smith, Smith & Verner, 2006). It is a continuous procedure. Performance management cycle is as follows:

This depict that the process of performance management never stop and it starts with making the plans and ends with review and evaluation. In between, the process of monitoring goes on. Performance management is essential for an organization to evaluate the employees and their contribution in enhancing and achieving the objectives of the organization.

Performance management is essential for every organization to analyze the performance of employee and make decisions about the changes in the organization. Some of the significance of performance management is as follows:

Involve employee in planning stage:

The planning of strategies all alone would not be helpful to run the business smoothly. Planner must also look for the ways through which task could be accomplished in a better manner in less resources. Performance management offers the employers to include the employees in the planning process so that a good planning could be done.

Monitors the process of employees:

Revision of business plans and strategy is important to ensure the growth of the business. This process points out the performance of employees and depict about the efficiency of employees. Performance management offers the employers to monitor the efficiency and effectiveness of employees with monitoring the growth of task.

Performance management provides you the tools and techniques to make sure entire development of employees. The development of employees is not only limited to the employees, it covers the entire team and that development directly makes an effect over the overall performance of the organization (Kusic et al, 2008).  

Significance of Performance Management

Individual performance evaluation:

It is essential for an organization to offer ratings to the employees according to their performance. It offers a clear picture about the employee to the management of the organization. Performance management helps the company in giving the rating to the employees.

Employees Reward:

It is essential for an organization to offer rewards to the employees according to their performance and ratings. It motivates the employee to do their work effectively. Performance management helps the company in offering the rewards to each employee according to the rating and performance.

Performance management system is getting affected through many factors. Some of them are as follows:

Manager’s ability to mobilize the organization:

A manger’s ability to organize the entire aspects of association affects the company’s performance management. Managers are the main persons who evaluate the company’s performance management and thus because of their knowledge and working style, company’s performance management get affected (Berry, Broadbent & Otley, 2005).

Simplicity and Transparency:

Performance management must be simple and transparent so that other employees could also know about the performance of an individual or a team and could work accordingly. It motivates the employees to work effectively.

Participation and practicality:

Performance management must be simple and transparent so that other employees could also know about the performance of an individual or a team and could work accordingly. It motivates the employees to work effectively (Ferreira & Otley, 2009).

Equality and objectivity:

Performance management must apply the equality principle and it is helpful to achieve the objectives of the company. It motivates the employees to work effectively. And it also give a sense of equality to all the employees so that they could do their best at workplace.

The responsibilities, duties and roles of employees:

The responsibilities, duties and roles of employees depict that performance management give a sense of roles, responsibilities and duties to employees so that they could do their best at workplace. It motivates the employees to work effectively.

Performance management system is affected through many factors. Some of them are as follows:

Effectiveness:

Effectiveness is the main element which could be affected by the performance management as performance measurement evaluates the effectiveness of employees and give the performance result to the employees so that they could enhance the effectiveness of the employees.

Objectives:

Objectives are the key part of an organization which is decided firstly. It is affected by the performance management as performance measurement evaluates and analyzes the achievability of objectives. The objectives of organization offer a result to the employees about their performance.

Factors Affecting Performance Management

Monitoring process:

Performance management monitors every aspect of the organization and employees. It offers a report of performance of employees and organization on a continuous basis so that every issue of organization could be resolved on time.

Evaluation process:

In order to evaluate the organization and employee’s performance, performance management gets exaggerated. It provides a report of employees and organization’s performance on a continuous basis so that every issue of organization could be resolved on time. This process is also used for enhancing the growth of the business.

Appraisal process:

Appraisal process is essential for motivate the employees so that the efficiency of their work could enhance. This process is affected by performance management as it becomes easy for the managers to appraise the employees on the basis of their performance (Moynihan, 2008).

Thus it could be said that there are many factors which is affected through the performance management of the company. Thus the performance management of a company must be quite effective.

Performance management is a wider concept which effects over the organization’s performance on a enormous basis. Some of the effects of performance management over organizational performance are as follows:

 Pay for performance compensation:

Performance compensation is the amount which is offered to the employees according to their efficiency and effectiveness to achieve the task. Performance management helps the organization to decide the compensation which an employee deserves in the organization. It also assists the management in analyzing the total compensation of an employee.

Defining goals:

Performance management helps an organization to define the goal for every employee, team and organization as whole so that the steps could be taken accordingly. And employees can meet with their goals effectively and efficiently.

Monitoring the process of achieving the goals:

After deciding the goal, performance management also helps the organization into monitoring the entire process of achieving the goal. And take further steps accordingly. So that employees can meet with their goals effectively and efficiently.

Process of offering the incentive to the employees:

Incentive is the amount which is offered to the employees for their extra task or qualitative work. Performance management helps the organization to decide the incentive which an employee deserves in the organization. It also assists the management in analyzing the total incentive of an employee.

There are many issues which are related to Performance management and have to face by organization on continuous basis. Some of them have been described below:

Effects of Performance Management on Organizational Performance

Business moves quite rapidly for annual goals to stay static:

Due to performance management, an organization have to make so many changes into the process to meet the goals of the business and due to it, the whole organization have to suffer with this issues. As the scenario of the market changes on the daily basis and even in that condition, management expects the employees to be the same energetic and maintain the rating which is not possible.

It takes too much time to offer performance feedback:

Performance management is an ongoing process which helps the organization into analyzing the employee performance. But it actually take a lot time that the feedback becomes of no sense for the employees.

Traditional review and method don’t help the employees grow and develop:

The techniques of performance management are quite old which are not helpful to analyze the exact effectiveness of an employees and thus performance management fails to make an employee grow and develop.

Ranking and rates actually demotivated the employees:

In real life, the rates and rating make an employee’s more de motives and due to it the performance of employees also get reduce. Employee starts to comparing his or her skills with other employees and thus an negative impact implies on the employee performance.

Rewards do not treat people as an individual:

The rewards offered by the organization to its employees actually make them to work like machine. They start expecting more from the employee and thus an individual starts work like a machine (Noe et al, 2006).

Performance management is a process which implies on some of the following methods:

Assessment centre method:

This method depict that the assessment of managers must be done so that it could be evaluated that how would they treat to their sub ordinate and how their performance could be evaluated.  

Behaviorally anchored rating system:

This is a modern technique which is a combination of many techniques such as essay evaluation. It guarantees the effectiveness and precision and it is also quite expensive than other techniques.

Critically incident technique:

This technique is something like essay evaluation. This technique depict the negative and positive side of an employee and according to that the performance of an employee is analyzed.

Essay Evaluation:

It is an affordable and effective technique. This technique involves a descriptive essay about every employee which consist their strength, weakness etc.

In this technique every employee is treated as an asset of the organization and according to that their performance is measured (Pollitt, 2005).

Performance Management Issues

Management by objective:

This technique focuses over the strength of the employees to deliver the work on time and with 100% quality.

Rating scale:

Performance management has been analyzed according to a scale of rating in this technique. Many factors are rated according to the employee performance (Scheer et al, 2005).

Paired comparison method:

In this technique, colleagues help is taken to analyze the performance of an employee.  

360 degree feedback:

In this technique, colleagues, team, organization etc’s feedback is taken and according to that the performance of employee is analyzed.

Conclusion: 

Through this report, it could be concluded that performance management is essential and used by every organization to analyze the performance of their employees and organization as whole. Significance of performance management in general life and in an organization has been analyzed. Performance management is a procedure by which employees and managers work together to make strategies and plans, monitors and reviews the objective of employee and overall contribution in the organization. Performance management is a fundamental goal which is used to promote and enhance the effectiveness and efficiency of employees.

This report also tells the user about the factors which are affected by the performance management or which are affecting the performance management. The effect of performance has been analyzed in an organization. Problems and methods of performance management have also been analyzed. This report depicts the user about performance management.

References:

Aguinis, H. (2009). Performance management. Upper Saddle River, NJ: Pearson Prentice Hall.

Berry, A. J., Broadbent, J., & Otley, D. T. (Eds.). (2005). Management control: theories, issues and performance. Palgrave Macmillan.

Cascio, W. F., & Aguinis, H. (2005). Applied psychology in human resource management.

Ferreira, A., & Otley, D. (2009). The design and use of performance management systems: An extended framework for analysis. Management accounting research, 20(4), 263-282.

Kusic, D., Kephart, J. O., Hanson, J. E., Kandasamy, N., & Jiang, G. (2008, June). Power and performance management of virtualized computing environments via lookahead control. In Autonomic Computing, 2008. ICAC’08. International Conference on (pp. 3-12). IEEE.

Moynihan, D. P. (2008). The dynamics of performance management: Constructing information and reform. Georgetown University Press.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2006). Human resource management: Gaining a competitive advantage.

Pollitt, C. (2005). Performance management in practice: A comparative study of executive agencies. Journal of Public Administration Research and Theory, 16(1), 25-44.

Scheer, A. W., Jost, W., Heß, H., & Kronz, A. (2005). Corporate performance management. ARIS in der Praxis, Berlin/Heidelberg/New York.

Smith, N., Smith, V., & Verner, M. (2006). Do women in top management affect firm performance? A panel study of 2,500 Danish firms. International Journal of productivity and Performance management, 55(7), 569-593.