Performance Management
1. There are many purposes of a Performance Management System and its relation to business objectives which include:
(i) Strategic
(ii) Administrative
(iii) Informational
(iv) Developmental
(v) Organisational maintenance
(vi) Documentation
(i) Strategic purpose: linking individual goals with the organisations goals and communicating the most crucial business strategic initiatives. This increases employee loyalty and retention, thereby improving the overall performance of the organisation.
(ii) Administrative purpose: providing information for making decisions regarding: salary adjustments; promotions; retention or termination; recognition of individual performance (Management Study Guide, 2013). This provides information to allow the company to plan effectively.
(iii) Informational purpose: communicating to employees; expectations, what is important, how they are doing and how to improve. This overcomes communication barriers in the organisation.
(iv) Developmental purpose: “Promoting a two way system of communication between the supervisors and the employees… providing a regular and transparent feedback for improving employee performance and continuous coaching” (Lockett, 1992); identification of individual strengths and weaknesses; causes of performance deficiencies; tailor development of individual career path. This encourages mutual trust between the employee and the company.
(v) Organisational maintenance purpose: plan effective workforce; assess future training needs; evaluate performance at organisational level; evaluate effectiveness of HR interventions. This provides employees with security and reassurance in the organisation.
(vi) Documentation purpose: document administrative decisions; help meet legal requirements to ensure that the organisation is compliant.
2. There are four basic components to an effective performance management system:
(i) Planning: identifying, clarifying and agreeing upon expectations; role definition;
(i) Strategic
(ii) Administrative
(iii) Informational
(iv) Developmental
(v) Organisational maintenance
(vi) Documentation
(i) Strategic purpose: linking individual goals with the organisations goals and communicating the most crucial business strategic initiatives. This increases employee loyalty and retention, thereby improving the overall performance of the organisation.
(ii) Administrative purpose: providing information for making decisions regarding: salary adjustments; promotions; retention or termination; recognition of individual performance (Management Study Guide, 2013). This provides information to allow the company to plan effectively.
(iii) Informational purpose: communicating to employees; expectations, what is important, how they are doing and how to improve. This overcomes communication barriers in the organisation.
(iv) Developmental purpose: “Promoting a two way system of communication between the supervisors and the employees… providing a regular and transparent feedback for improving employee performance and continuous coaching” (Lockett, 1992); identification of individual strengths and weaknesses; causes of performance deficiencies; tailor development of individual career path. This encourages mutual trust between the employee and the company.
(v) Organisational maintenance purpose: plan effective workforce; assess future training needs; evaluate performance at organisational level; evaluate effectiveness of HR interventions. This provides employees with security and reassurance in the organisation.
(vi) Documentation purpose: document administrative decisions; help meet legal requirements to ensure that the organisation is compliant.
2. There are four basic components to an effective performance management system:
(i) Planning: identifying, clarifying and agreeing upon expectations; role definition;
Bibliography: Businessballs.com, (2013), Adams ' equity theory [internet]. http://www.businessballs.com/adamsequitytheory.htm (accessed 17/03/13) CIPD, (2007), Rewarding Work: The Vital Role of Line Managers [internet], http://www.cipd.co.uk/hr-resources/research/rewarding-work-vital-line-managers-role.aspx (accessed 07/04/13) e-how.com. (2013), What Are the Purposes of Rewards & Recognition? [internet], http://www.ehow.com/info_8218329_purposes-rewards-recognition.html (accessed 15/04/13) Lockett J, (1992), Effective Performance Management, London: Kogan Page Management Study Guide, (2013), Objectives of Performance Management [internet]. http://www.managementstudyguide.com/objectives-of-performance-management.htm (accessed 25/02/13) Martin M, Whiting F and Jackson T (2010), Human Resource Practice, Fifth Edition, London: CIPD Mindtools.com, (2013), Herzberg 's Motivators and Hygiene Factors [internet], http://www.mindtools.com/pages/article/newTMM_74.htm (accessed 24/03/13) Provenmodels.com, (2013), Motivation-Hygiene Theory [internet], http://www.provenmodels.com/21 accessed (24/03/13) Simplypsychology.org, (2013), Maslow 's Hierarchy of Needs [internet], http://www.simplypsychology.org/maslow.html accessed (24/03/13) WorldatWork, (2013), Total Rewards Model [internet], http://www.worldatwork.org/waw/home/html/home.jsp (accessed 07/04/13)