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Importance of performance management for the organisation
Characteristics of an ideal performance management system
Strengths and weaknesses of performance management process
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Organizations derive competitive advantage by outperforming rivals in the execution of activities required to ensure optimum operational effectiveness in providing products and services to customers (Porter, 1996). Operational effectiveness depends largely on the extent to which the organization’s performance management system (PM) is capable of developing the knowledge, skills, and abilities of its people (Allan, 1994). Thus, knowledge of developing and implementing an effective PM system plays an essential role in achieving competitive advantage. Using the table provided in Case Study 1-1 (Aguinis, 2009, pp. 24-25), this paper analyzes the content and efficacy of the PM system being used by Aeternus Life Insurance Corporation (renamed to comply with confidentiality agreements) to develop its people. An effective analysis of a PM system begins by comparing the characteristics of the actual system with those of an ideal system, then assessing the capability of the system for identifying, measuring, developing, and aligning performance with organizational goals (Aguinis, 2009).
The Value of an Effective PM System
In general, an effective PM system contributes to the achievement of organizational strategy, administration of employee transactions, communication of organizational performance expectations, human resource planning, and employee development (Aguinis, 2009). In addition to elements corresponding to the conduct of performance appraisals, the ideal PM system addresses several key characteristics that contribute to the alignment of performance with strategic objectives. Overall, an effective PM system represents a “. . . systematic, data-oriented approach to managing people at work that relies on positive reinforcement a...
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...rmance management (2nd ed.). Upper Saddle River, NJ: Prentiss Hall
Allan, P. (1994). Designing and implementing an effective performance appraisal system. Review Of Business, 16(2), 3.
Daniels, A. (1989). Performance management: Improving quality and productivity through positive reinforcement. Tucker, GA: Performance Management Publications.
Hopkins, S., & Weathington, B. (2006). The relationships between justice perceptions, trust, and employee attitudes in a downsized organization. Journal of Psychology, 140(5), 477-498.
Porter, M. (1996). What is strategy? Harvard Business Review. Retrieved from http://hbr.harvardbusiness.org/1996/11/what-is-strategy/ar/1
Scott, S. G., & Einstein, W. O. (2001). Strategic performance appraisal in team-based organizations: One size does not fit all. Academy Of Management Executive, 15(2), 107-116. doi:10.5465/AME.2001.4614990
Miller, C. E., & Thornton, C. L. (2006). How Accurate Are Your Performance Appraisals? Public Personnel Management, 35(2), 153-162.
The performance assessment and appraisal forms are crucial within the performance management system (Aguinis, 2014). However, the appraisal form within the case study provided is designed for the supervisor’s use thus missing one vital factor throughout the entire process, employee participation. Thus, questioning the validity and reliability of the process. This is especially concerning as the bottom 10 per cent of employees are being fired and the top 20 per cent are being rewarded with $5,000.00 based on what their supervisor records on the form without consultation with employees. Thus, supervisors may not provide accurate scores as they do not have to justify their responses (Aguinis,
The Mayo Clinic (Mayo) provides a compelling and instructive example of the critical role of performance measurement in managing performance behaviors. An analysis of the Mayo approach offers insightful understanding of effective performance management practices. Accordingly, this paper reviews the Mayo performance management system from four perspectives (a) leadership strategy, (b) performance measurements, (c) human resources management, and (d) the alignment of performance with strategy. The discussion concludes with an assessment of the alignment of the elements comprising the Mayo performance management system with recommendations for strengthening those alignments.
“Using PM System doesn’t improve the performance of an organization. PM system incorporates of not only evaluating performance appraisals but also rewards. As quoted by Sheridan (2009) and Latham (2005), “the cultural maturation of performance based can take decades to implement and requires the organizations to allocate the required resources”. Technology plays a pivotal role in future of PM systems where e-monitoring of performance of employees in Hilton and other entities respectively can change the evolution of performance management thus bringing necessary and important changes to stay competitive in the market as well increasing an individual’s productivity in the company (Sheridan & Latham, 2005)”.
Jules, P, & Holzer ,M. (2001). Promoting the Utilization of PerformanceMeasures in Public Organizations: An Empirical Study of Factors Affecting Adoption and Implementation. Public Administration Review, 61 (6): 693 – 708.
The author and his supporters have an incredibly resource full website that provides more information, over 1000 relevant articles, tools, assessments and more. You can dig in at www.performance-appraisals.org. No information, registration or costs required for this site.
Performance appraisal is perceived by most as a tool to reward or penalize employees for their good or bad work respectively by the end of a year. This notion is a challenge in itself to deal with. The whole exercise becomes dull for both supervisors and their subordinates and they tend to look at it as an additional responsibility which they have to finish. In the end, there is little or no value addition for either the employee or the organization. There are, however, better ways of looking at and conducting performance appraisals. It can give much needed feedback to both performers and laggards to improve upon and if done properly can even boost their motivation. More importantly, they provide a chance to employees to have a say in their goal setting and thus aligning it with the departmental and organizational goals. Also, the process itself has a value in team making.
To what extent are the pervasive characteristics of organisational performance management essential for ensuring organisational effectiveness?
Banner, D. K., Graber, J. M. (1985). Critical issues in performances appraisal. Journal of Management Development. Issue 4. Pp. 27-35.
When implementing a new performance management system in an organization there are both advantages and disadvantages that need to be taken into consideration by the design team. However, one of the best ways to know if a performance management system is effective is by implementing the system within the organization and then continuously monitor and reevaluate if the system is still relevant to the organizational
Performance management is a management tool used to value, monitor and measure a company’s strategies that ensure the efficiency and effectiveness of its product delivery. This management tool does not focus on the organisation and on its employees as well as stakeholders. It is a continuous process that entails that managers make sure that organisational and employee values are corresponding (Aguinis, 2005,p.1/2-1/5). Performance Management brings about the competencies in the employees, increases self-esteem by giving feedback to employees, there is a low number of lawsuits because it helps understand the company better (eThekwini Municipality, 2008,p.10-11). According to Pride, Hughes and Kapoor (2011, p.288) performance management creates motivation for employees; one theory of motivation is of Expectancy, which stipulates that employees satisfaction is driven by expectations of what an organisation will offer in return.
Performance management is a useful and powerful tool that can be used by managers to identify what areas of their organisation they need to improve to increase the organisation’s overall performance. The idea of a balanced scorecard enforces a sensible distribution of resources and effort across all aspect of performance an organisation is, or should be, concerned with.
Although performance is a major objective at top organizations, successfully addressing poor performance is also a key focus. Although many employees feel or dread performance appraisals they are directed to enforce clarity with individual employees day-to-day work-load, performance appraisals develops responsibility while making employees accountable for performance expectations, reinforces future career planning, helps the organization with determining training needs, and provides a stem of documentation for legality purposes. Performance management in detail is much broader than many employers, and employees assume and necessitates so much more. Proficient appraisals should represent a summary of on-going dialogue. Focusing only on an annual performance evaluation leads to misrepresentation of the performance management process in its
Grubb, T. (2007). "Performance Appraisal Reappraised: It's Not All Positive." Journal of Human Resource Education. Vol. 1, (No. 1,): 1-22.
Performance management is a continuous process that creates a working culture to encourage employees to improve their work performance and reach their full potential during their stay of employment. Performance Management also provides strategic direction, develop competency in employees and instill organization value. This paper will identify methods and affects that performance management plan has on the organization and their employees.