Advantages And Disadvantages Of Performance Measures

Performance measures have been a widely accepted managerial practice that has become a central and indispensible part of human resources management for many organisations, (Cole 2010). The overall goal of performance measurement is to ensure that all of the subsystems within the entity are working to optimum efficiency to achieve the goals outlined by the organisation (Castka, Bamher & Sharp 2003). Performance measures have been widely implemented and there is a commonly held belief amongst organisations that view performance measurement as an accurate and efficient way of linking rewards to organizationally desirable values. Additionally there is a perception amongst organisations that see performance measurement as an effective way of increasing efficiency and the human capital of the entity, (Cravens 2010). For this reason interest surrounding the use of performance measures has increased considerably over recent years and research has revealed that while measuring performance accurately, is vital and has played its part in the success of many organisations, it also suffers form significant drawbacks. These drawbacks include the biased nature of obtaining the data, reducing employee motivation and creating a stressful work environment where employees are driven to fulfill only qualitative goals.

PERFORMANCE MEASUREMENT AND ORGANISATIONAL COMMITMENT/ VALUES

In a study conducted by (Eccles 1991) it was concluded that performance measurement is an important tool that provides an official way of coupling an organisations values and cultures to rewards. His research suggest that through performance measurement organisations can actively reward employees whose values and behaviours reflect that of the organisations. This idea was t...

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...nal and job satisfaction. On the other hand research conducted by (Kerr 1975), (Campbell 1976) and (Ahmad 2010) reveal that performance measures can negatively impact an employees motivation and self efficacy if the measures are conducted with bias on or only quantitative indicators are used. It is therefore clear that while performance measurements have significant advantages it also suffers from major drawbacks. Since performance measures are such a widely used managerial tool that are commonly perceived to be an accurate indication of both an organisations and employee’s performance, it is important that management look at both sides of the picture when implementing measurement systems. This includes ensuring that both quantitative and qualitative measures are used and to ensure that employees are made aware of what tasks or behaviours are being measured.