Performance Management Systems

Introduction

Performance management systems are effective when they are based on goals that are jointly set and are driven by an organization's business strategy. The use of competency models that are based on business strategy is strongly associated with organizational effectiveness. When they drive salary increases and bonuses, they are executed better. Often absent but critical to the success of performance management systems is senior management leadership and ownership, much less important is ownership by HR. Additional keys to effectiveness are training managers to do appraisals, holding them accountable for how well they do appraisals, and using measures of how results are achieved (Lawler III, Benson, McDermott, 2012). Though this statement proves mostly correct, there is some inconsistency with the authors claim. Within every organization, there needs to be a driving force that is committed to not only the organization but also its administrative process. Human Resources is that driving force and amidst all other functions they facilitate, one of the more important obligations is to the employees themselves by way of their performance appraisal system. The information collected from performance measurement is typically used for compensation, performance improvement or management (e.g., personnel decision making), and documentation. Performance data are often used for staffing decisions (e.g., promotion, transfer, discharge, layoffs), and this is where the entire PM system may fall under the scrutiny of the courts. PA is also used for training needs analysis, employee development, and research and program evaluation (e.g., validation research for selection methods) (Bernardin, 2011). Like every system in place, there must...

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