PERFORMANCE MANAGEMENT LINK WITH HRM

FUNCTIONS

QUESTIONS

1. Performance Management is Cyclic in Nature. Discuss

2. Performance Management is closely linked with other Human Resources Functions.
Discuss
1.1 Introduction to Performance Management
Performance management is an organization-wide approach, which aims to achieve business
success through the management and direction of individuals and teams. It is important not to
view performance management as a single tool or technique (e.g. a single, annual performance
review meeting), but rather as a range of methods (e.g. performance review meetings, 360 degree
feedback, informal feedback and personal development plans). Using a sole method reduces the
overall effectiveness of performance management.
Performance management aims at building a high performance culture for both the individuals
and the teams so that they jointly take the responsibility of improving the business processes on a
continuous basis and at the same time raise the competence bar by upgrading their own skills
within a leadership framework. Its focus is on enabling goal clarity for making people do the
right things in the right time. It may be said that the main objective of a performance
management system is to achieve the capacity of the employees to the full potential in favor of
both the employee and the organization, by defining the expectations in terms of roles,
responsibilities and accountabilities, required competencies and the expected behaviors. The
main goal of performance management is to ensure that the organization as a system and its
subsystems work together in an integrated fashion for accomplishing optimum results or
outcomes. (McAdam , & Casey , 2005 ).

1.1.1 Scope of Performance Management

The Performance Management should conform to broad organisational framework. It should
provide for managers and managees shared experiences, knowledge and vision. It encompasses
all formal and informal measures and procedures adopted by organisations to increase corporate,
team and individual effectiveness. Managees/ employees should be enabled continuously to
develop knowledge, skill and capabilities. Performance Management has got to be understood in
totality of the organisation but not in various parts. Performance Management is designed and
operated to ensure the interrelationship of each of these processes in the organisation.
Performance Managemnt assumes that the managers and team members share accountability for
performance by jointly agreeing on common set of goals i.e., what they need to do and how they
need to do it. They jointly implement the agreed plans and monitor outcomes. (McAdam , &
Casey , 2005 ).

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Performance management is an ongoing communication process that involves the manager and
the employee in:
Identifying and describing essential job functions
Developing appropriate performance standards and objectives
Linking them to the University's mission and goals
Giving and receiving feedback about performance
Undertaking effective performance appraisals
Planning education and development opportunities to sustain improve or build on
employee work performance. (McAdam , & Casey , 2005 ).
Performance management needs to take account of both under-performance and high
performance. The employee management effectiveness is one of the most important factors in
the achieving company success and its competitive advantage. Therefore, performance
management is the continuous process of the planning, monitoring and reviewing employees
work objectives and their overall contribution to the company.
1.2 Performance Management as Cycle
Performance management is an ongoing process of communication between a supervisor and an
employee that occurs throughout the year, in support of accomplishing the strategic objectives of
the organization. The communication process includes clarifying expectations, setting objectives,
identifying goals, providing feedback, and reviewing results.
Managing Employee Performance:The Cycle

Overseeing performance and providing feedback is not an isolated event, focused in an annual
performance review. It is an ongoing process that takes place throughout the year. The
Performance Management process is a cycle, with discussions varying year-to-year based on
changing objectives. (Aguinis , 2009)

The cycle includes Planning, Checking-In, and Review.

To begin the planning process, you and your employee review an overall expectation, which
includes collaborating on the development of performance objectives. Individual development
goals are also updated. You then develop a performance plan that directs the employee's efforts
toward achieving specific results to support organizational excellence and employee success.

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Goals and objectives are discussed throughout the year, during check-in meetings. This provides
a framework to ensure employees achieve results through coaching and mutual feedback.
(Aguinis, 2009)

Source: (Armstrong, 2008)

The performance management cycle includes three main stages:

1.2.1 Performance Management Planning
The planning stage of the performance management cycle involves both the employees and
managers. On this stage, the manager and employee agree what the employee must accomplish,
to what standard (for example, the sales goals) and identify how results will be measured. They
also negotiate about the competencies (such as product knowledge and customer focus) that are
necessary for effectively accomplishing the company's performance and define the development
and studying the employee needs to eliminate gaps in his/her competence. So, the first stage of
the performance management cycle is dedicated to identifying the employees job description

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and work plan and the company's goals and objectives, and strategic plan. (Salas , Burke , &
Fowlkes , 2006)
1.2.2 Performance Management Monitoring
The employee performance and progress should be continuously monitored. "Continuous
monitoring" doesn't mean watching every aspect of how the employee fulfills assigned tasks and
activities. Managers should focus their attention on the achieved results, individual and team
dynamics affecting the work environment.
So, on the second stage of the performance management cycle, the employee and manager track
the employees development and performance. If it is necessary, the employees performance
plan is corrected to meet the changed circumstances. (Cheng et al, 2005)

1.2.3 Performance Management Reviewing and Evaluating

On the last stage of the performance management cycle, the employees accomplishments and
standards that have been agreed at the first stage are analyzed by the manager and employee.
They also consider what new the employee has studied and how his/her knowledge can be
effectively used within the employees current position and in the future company's jobs. They
come to terms about how well the employee performed during the last period and what he/she
needs to consider for achieving the future work standards and goals. The manager conducts the
evaluation of the employees performance, especially if decisions about the employees
employment, compensation, or rewards must be made. Using performance management software
solution helps improving business and its results. (Cheng et al, 2005)
1.3 Link between Performance Management with Human Resources Functions
The establishment of an effective performance management system requires time and resources
and therefore, the support of the board, the executive director and other senior managers. When
developing a new performance management process, an organization can strike up a committee
made up of employees, managers and board members to increase buy-in, understanding and
support for the process.
Management support to act upon the outcomes of the performance management process is also
necessary to ensure that good performance is recognized, inadequate performance results in the
necessary support and/or training to improve performance and consistently poor performance

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results in a change of responsibilities or termination, as appropriate. (Nankervis & Compton,
2006 )
Job Analysis; Performance information may lead to redesign of jobs. Also accurate information
about jobs is key to develop criteria for performance appraisal. (Nankervis & Compton, 2006 )
Recruitment and Selection; Performance information lets managers know about the
effectiveness of alternative sources of recruitment and the effectiveness of their selection criteria
and procedures. Then ability to recruit and select employees may affect the types of criteria and
standards developed for performance appraisal. (Nankervis & Compton, 2006 )
Training and Development; Performance management systems provide information on
employees training and development needs; information on the performance appraisal systems
assesses the effectiveness of training. Performance appraisal tools may be designed to assess the
impact of training programs. (FMI Corporation, 2000)
Compensation; Compensation systems may be designed such that performance appraisal
information has an impact on employee compensation. A fair and equitable compensation system
may lead to higher levels of employee performance. (FMI Corporation, 2000)
Conclusion
An important aspect of performance management is the development of relevant appraisal
criteria for the employees position and the expectations of the organization. Appraisal data may
be gathered through a variety of mechanisms, including self, subordinate, team members, and
multisource or 360-degree feedback. Methods for organizing these data may involve a graphic
rating scale, ranking, a behavioral anchored rating scale, a behavioral observation scale, a critical
incidents record, and achievement of outcomes or objectives. The choice of approach is
dependent on the job; the organizational goals; and, perhaps most important, the culture of the
organization, particularly its readiness to confront performance issues honestly and openly.

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References
Aguinis , H. ( 2009 ). Performance management ( 2nd ed .). Upper Saddle River, NJ : Pearson
Prentice Hall .
Bennett , W. , Lance , C. E. , & Woehr , D. J. (Eds.) ( 2006 ). Performance measurement: Current
perspectives and future challenges . Mahwah, NJ : Lawrence Erlbaum Associates .

Cheng , et al, ( 2005 ). Towards a multidimensional competency - based managerial performance

framework: A hybrid approach . Journal of Managerial Psychology , 20, 380 396 .

FMI Corporation . ( 2000). Using performance reviews to improve employee retention:

Contractor s business management report , 2 , Denver , Colorado .

McAdam , R. , Hazlett , S. , & Casey , C. ( 2005 ). Performance management in the UK public

sector: Addressing multiple stakeholder complexity . International Journal of Public
Sector Management , 18 , 256 273 .

Nankervis , A. R. , & Compton , R. ( 2006 ). Performance management: Theory in practice? Asia

Pacifi c Journal of Human Resources , 44 , 83 101 .

Salas , E. , Burke , C. S. , & Fowlkes , J. E. ( 2006 ). Measuring team performance in the wild:
Challenges and tips . In W. Bennett , C. E. Lance, and D. J. Woehr (Eds.), Performance
measurement: Current perspectives and future challenges (pp. 245 272 ). Mahwah, NJ :
Lawrence Erlbaum Associates