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Introduction
Grades are an essential part of almost every university class. What would happen if there were no grades ? Would your individual performance improve or decline? Similar issues take part between employees concerning their performance. Performance management involves assessing and communicating employee contributions. Rating employees performance is similar to giving them grades. In the employment context, important questions include the following : Do employees improve their performance when their contributions to the organization are measured? Is it helpful to give feed- back so that employees know how they are doing? Does effective measurement of individual contributions help in improving organizational performance?
Measuring performance and giving feedback does indeed improve employee performance. And improvements in individual performance trans- late into better organizational performance. Organizations have higher productivity when top management encourages supervisors to set goals, assess performance, and provide feedback to employees.One reason is that trust in management increases when performance is accurately measured and adequately rewarded. It can, in fact, play a major role in providing for an integrated and coherent range of human resource management processes which are mutually supportive and contribute as a whole to improving organizational effectiveness.
Performance Management Systems
Performance management systems involve numerous activities, much more than simply reviewing what an employee has done. These systems must fulfill several purposes. Moreover, theyre often constrained by difficulties in how they operate. It is a way to get better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements. A system that helps in measuring and evaluating the connection between the efficiency of the work performance and the duties and responsibilities of the job it occupies , in a way that helps to identify the strengths and weaknesses in the past performance and determine how its possible to avoid the weaknesses and invest the strengths at the present and in the future .
Aims of performance management
Monitoring and evaluating individuals and organization performance is an essential part of handling human capital . It has several key aims.
- Identifying the learning/development and performance enhancement needs of individuals
- Identifying challenges or performance obstacles which require intervention
- To identify people with potential for future promotion, supporting succession planning
- Providing the basis for incentive decisions: qualifications for results-related rewards, competency-related promotions, merit awards and so on.
- Improving contact between managers and team leaders on job problems, success and growth opportunities.
How Is Performance Management Strategic?
Although identifying high and low performers is an important part of performance management , it might not be the best approach for other organizations. In some cases, encouraging people to stand out from the crowd may discourage teamwork and harm employee motivation. Like other HR practices, then, performance management practices are most effective when aligned with an organizations competitive strategy.
Emphasizing Either Merit Or Parity
Organizations tend to follow one of two approaches in measuring performance . Some organizations create a merit-based climate that emphasizes performance differences among employees. In other organizations, the system encourages parity, or a sense of equality, among employees.
Merit-Based Systems
The basic objective of a merit-based system is to create and recognize high performance in order to achieve superior outcomes. This is the approach with the underlying purpose of performance management being to encourage employees to perform at the highest possible level. Employees who produce the highest outcomes, or results, are given high marks. this is usually done through the use of relative measures that compare employees with each other. Success at work is defined not just as meeting a certain standard but as doing better than others. With a merit-based system, managers are also frequently required to place a certain percentage of employees in each rating category, which is called a forced distribution. Only a few can be given the highest rating, and at least some must be given the lowest rating. In summary, merit-based systems focus on bottom-line results and use relative measures and forced distributions to ensure that high and low performers are clearly identified.
Parity-Based Systems
The basic objective of a parity-based system is to encourage cooperation and allow everyone who meets a certain standard to be classified as a high per- former. Parity-based performance measures frequently focus on processes rather than outcomes. High performance is defined as following guidelines and performing behaviors assigned by supervisors. This usually involves absolute measures that compare employees with an established benchmark rather than with each other. Most parity-based systems also adopt a free distribution, which allows any percentage of employees to be placed in a particular category. For example, any employee who assembles a certain number of cell phones without error can be given a top performance rating, regardless of how many cell phones others assemble. Every employee can thus be a top per- former. In general, parity-based performance systems do not separate people into categories of high and low performance but rather encourage all employ- ees to perform above a certain standard.
Functions of Performance Management
The performance management is especially concerned with individuals , processes, and organizational performance . To achieve this objective performance management performs a spread of functions.
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