3. Performance Management

Introduction

Definition

Performance management is a set of processes and systemes which aim at developing the employees in an organization allowing them to perform their job to the utmost ability. It is a way of building skills, motivating them to boost their success and reach their potential while also accomplishing the stratergic goals of the organization (Vulpen, 2024)

Performance management goals

The main goal of performance management is setting perfoemance expectations so the employees have a clarity that what is expected and what they have to do and what will be the rewards of achieving those targets. Performance management process is also a continuos real time feedback which allows the employees to identify thier weeknesses and grow to a higher standard.

Companies using performance management program effectively, are 1.5x likely to outperform their competitors and 1.25x higher in productivity (Watson, 2022). 

Performance management also allows the employees to align their personal goals with the goals of the organization and to understand how they can contribute to achieve them effectvley.

How performance management contribute to achieve organizational objectives

• Promotes continuous improvement in the organization.
• Increases the motivation and commitment of the organization.
• Enables individuals to develop their abilities.
• Increases job satisfaction.
• Enables setting of "SMART" targets.
• Act as alever for change.
• Employee's work can be evaluated.

Performance management cycle

"The performance management cycle is the model that allows the employees and organization to better achieve organizational goals through a structural process of employee development" (Andreev,2021).

The cycle consist of four main stages as; Planning, Monitoring, Reviewing and Rewarding. The model usually run for a complete year and end with performance review.

Performance Management Cycle

Performance Management vs Performance Appraisal

Performance appraisal is usually an annual evaluation of past behaviors and outcomes, on the other hand performance management is more like a continuous, dynamic process rather than once a yera event. It involves regular dialouges and real time feed back between employees and managers.

There are two main types of appraisals;

1. Formal appraisals - Scheduled appraisals based on performance that were specified in advance.

2. Informal appraisals - Unsheduled appraisal of ongoing progress and areas for improvement.

Continuous Performance Management Process

Conclusion

It is very clear that performance management is extremely important in the success of a business. When designed and implemented, the performance management cycle has the power to; Clarify responsibilities and accountabilities, Align goals under organization's vision and mission, Engage and retain top performers, Develop and grow employees personally and professionally etc.

Performance management is crucial for an organization in many aspects such as productivity, employee engagement, trust, professional development, training needs, retention, organizational success etc.  

References

1. Vulpen, E. 2024. [ Online] What is performance management : A complete guide. Availbale at : https://www.aihr.com/blog/what-is-performance-management/  Accessed [10.04.2024].

2. Watson, W.T. 2022. Employees are reshaping performance management and pay programs.

3. Andeev, I. 2021.[Online] Performance management cycle. Available at : https://www.valamis.com/hub/performance-management-cycle . Accessed [10.04.2024].

4. Stange, J. 2023. [Online] What is performance management : The ultimate guide foe building a stratergic approach. Available at : https://www.quantumworkplace.com/future-of-work/performance-management.  Accessed [10.04.2024].