Performance Management

 

Definition of Performance Management.

According to Tardi. C. (2019) Performance management is a corporate management tool that helps managers monitor and evaluate employees' work. Performance management's goal is to create an environment where people can perform to the best of their abilities to produce the highest-quality work most efficiently and effectively. "Performance management is a process for establishing a shared understanding about what is to be achieved, and how it is to be achieved; an approach to managing people which increases the probability of achieving job-related success" (Brumbrach, 1998).

Figure 1: Performance Management System.
Source: (Techfunnel, 2020)

Purpose of a performance management system.

• To improve the company's profit margin: Performance management improves business performance by reducing staff turnover, which helps increase the company's profit margin, thereby generating excellent business results.

• To guide staff along an appropriate career path: In accordance with global best practice in performance management, staff performing a supervisory function are expected to guide staff who depend on it along a career path clearly defined and progressive.

• To provide staff with valuable progressive feedback: Fast real-time feedback makes performance management systems managed by HR more engaging and proactive.

• To ensure that the personnel reaches their SMART objectives: the personnel of the company can reach the objectives fixed for them and exceed the expectations only when it is absolutely clear on what exactly is expected from them. Goals that are regularly set, short term and that are discussed frequently are often more effective.

• To ensure that employee goals are linked to and advance organizational goals: Human resources use performance management systems to help staff see the link between individually assigned goals and overall organizational strategy. This gives the meaning and purpose sought by employees in their careers (Techfunnel, 2020).

How Performance Management Works

Performance management programs use traditional tools such as creating and measuring goals, objectives and milestones. They also aim to define what effective performance looks like and to develop processes to measure performance. Instead of using the traditional end-of-year exam paradigm, performance management turns every interaction with an employee into a learning opportunity.

Managers can use performance management tools to adjust the workflow, recommend new action plans, and make other decisions that will help employees achieve their goals. In turn, this helps the business to achieve its goals and operate optimally. For example, the manager of a sales department gives his staff target revenue volumes that they must reach in a given period. In a performance management system, with the numbers, the manager would offer calibrated advice to help salespeople succeed (Tardi. C.,2019).

Importance and effectiveness of Performance Management

Performance management is very important for the employer and the employees who contribute to the organization's goals. It has recently attracted more attention due to a highly competitive business environment. A good PMS will allow the organization to undertake a systematic assessment of the training needs of its employees, establish development plans and give them the opportunity to use the results of the performance management process to influence the reward of an individual.

Reference.

Tardi Carla (2019) Performance Management [Online] Available at: https://www.investopedia.com/terms/p/performance-management.asp [Assecced on: 9th February 2020]
Brumbach, G. B. (1998) ‘Some ideas, issues and predictions about performance management’, Public Personnel Management, Winter, pp. 387–402.
Figure 1: Techfunnel (2020) Performance Management System [Online] Available at: https://www.techfunnel.com/hr-tech/performance-management-system/ [Assecced on: 9th February 2020]