Importance of a Well-Designed Performance Management System - Coursework Example

Running head: Performance Management Student’s name Institution Course Professor Date Introduction Performance management is the general approach or means towards ensuring there is effective human resource management to ensure the organization goals and strategic objectives and the employees’ goals are realized. Performance management involves a wide range of activities to ensure the intended purpose achieved. The process entails activities like: monitoring and measurement of individual and group performance; aligning individual and group goals; communication process in the organization; coaching and mentorship; review of performance; identification and reporting of deviations ; staffing among other activities. There is a great difference between performance management and performance appraisal. According to Dessler et al, (2007: 314) performance management is the process that identifies, evaluates and develops employee performance to meet his goals and those of the organization. On the other hand, performance appraisal is the process that consolidates goal setting, performance appraisal and employee development into unified system thus ensuring the achievement of the organization goals. Performance appraisal is thus a subset of performance appraisal. Since performance management is a wide area it thus need to have some branches that supplement it towards the realization of the intended purpose. It thus have some elements that built it up. The key elements of performance management thus include the following: Performance planning Performance coaching and mentoring Performance measurement and evaluation Performance feedback and documentation Performance planning Performance planning as an element of performance management entails setting the direction and stating the expectations, determining both employee and organization goals and objectives, determining how they will be evaluated, and lastly designing the guiding process and control process. Setting direction involves the communication of the goals of the organization and the strategic means of achieving those goals. The management clarifies the target goals for each division or department of the organization. Their expectations are also stated to ensure they know them and hence will work towards achieving them. The support and guidance to be offered to employees is also communicated to them (Cardy &Leonard, 2011). Departmental or division goals are set also to be aligned to those of the employees, this will ensure there is job satisfaction while working towards the achievement of the organization goals. The employee goals and objectives are thus taken into consideration during the performance planning stage. This stage also involves the management staff of the organization weighing on the available evaluation methods to be used. Planning for the best method to use in the evaluation of performance is discussed and a suitable method to both the organization and the work force is decided. Measures necessary and then put in place waiting to use the method when time comes (Cardy &Leonard, 2011). The last area in performance planning involves on planning for formal checks in the system and how they will be corrected. This all-planning ends with the documentation of how the process will run. The people involved in the carrying out of the various activities are then informed on their roles and responsibilities. The necessary materials are then put in place to avoid inconveniencies. Performance coaching and mentoring This key element of performance management involves three areas: conducting interim checks, exploring causes of poor performance and providing the necessary coaching and mentoring. The various managers at each stage of the running of the organization are suppose to carry out checks on how the employees are carrying out their duties to make sure that they perform according to their expectation. Checks are carried out more frequently to ensure the mistakes of the workers are early noticed and corrected so as not to cost the organization high losses. Checks are more important than waiting for the annual performance review. Causes of poor performance should be studied in case the organization is not running as intended. There are various reasons why the organization may underperform and those reasons should be studied. This will help the management in coming up with the means of solving the problems thus ensuring the organization runs as in tended. Human resource training and development should also be offered (Cardy &Leonard, 2011). The organization should put in place means of educating and coaching its workers to ensure they improve their performance and cope with the existing and current technology. Coaching and mentoring ensures workers are satisfied with their work and thus contribute towards achieving good performance. The coaching should be a continuous process and both on the job and off the job training. This ensures there is continuous and progressive human resource in the organization (Aguinis, 2012). Performance measurement and evaluation The organization should have suitable means of performance measurement and evaluation. There should be relative and absolute measurement of employee performance. Measurement of employees’ performance can be compared among the employees themselves or according to the set standards for each of them. Raters and the rating methods can do measurement of employee performance. The means chosen should be both suitable to both the employer and employee and should be acceptable to both parties. After measuring, the performance there should be ranking and evaluation of the performance. This helps the organization to understand the levels of performance of different types of employees and will thus help in implementing measures on salaries, wages, education/training, promotions among other measures (Cardy &Leonard, 2011). Performance feedback and documentation A timely feedback should be given to employees. All relevant assessment records should be discussed with the employees to ensure they understand how they were assessed and the results of it. Appropriate setting of the manner and place of giving the feedback should be suitable for both parties. Employees should be given support on what they have done well and encouraged on how to perform well in the failed areas. In case of very poor performance and there is need for dismissals, they should be conducted professionally (Aguinis, 2012). Importance of a well designed performance management system Well-designed performance management systems usually have many benefits to both the organization and its employees. The various advantages of the system can be grouped into direct financial gain, motivated workforce and improved work force. Good performance management system ensures there is increase in sales of the organization since each employee tries to achieve a certain goal. The costs of production are reduced since there is good management of the various activities going on in the business and hence wastages are reduced while producing at the lowest costs and within shortest time. The project or organization overruns are also stopped or reduced (Aguinis, 2012). Workers in the organization also work towards the achievement of the CEO’s goals which mainly is profit maximization and increasing the net worth of the organization. Workers of the organization are motivated due to the various aspects offered by a good performance management system. There is a lot of incentives plans to specific goals, for over achievement hence workers feel motivated. There is improved employee engagement because they all understand their contributions towards the achievement of the overall goal of the organization. Employees are valued as part of the organization and not just means of achieving certain goals. The various human resource training, development, coaching and mentoring activities offered by the organization also motivate the workers. This hence makes them to attain job satisfaction (Cardy &Leonard, 2011). Good performance management system ensures there is improved management control in the organization. It ensures there is flexible, responsive to management needs, displays in data relationships, helps in audit of employees and the communication process is efficient and simplified. Improved management control ensures no more resources are put in management. Method of performance evaluation The key methods of performance evaluation include the following: The raters This method depends on who carries the evaluation and what method they use. They can thus be classified as: The immediate manager rater: The managers of the workers assess the workers and give the report. It is can be used in the accounting sector where the chief accountant assesses the assistant accountant. It is advantageous since immediate manager knows more about the worker. It disadvantage is that there might be favourism or hate rate hence not giving good results about the worker. Peer raters: peers of workers give report concerning the workers for example in law and sales department colleagues can be used to assess the counterparts. It is advantageous since they know more about their peers but there might be friendship bias. Subordinates appraisals: Also called reverse appraisals. Workers supervised give an assessment about their manager. It can be used in Production Company where an expert supervises the production activities. Efficient since subordinates know how managers communicate, delegates, plans, supervise, directs among other things. The disadvantage of this method is that the manager may feel demoralized by being appraised by subordinates (Breakwell & Millward,1995). Self-appraisal involves a worker assessing himself. Can apply in many organizations. It improves the employee motivation and reduces defensiveness during evaluation process. It is however, prone to be lenient, less variable and biased. Customer appraisals involve clients giving their feedback about how they were served by a worker. It is mainly used in the service industry and where there is high contact between workers and clients. They provide customers perspectives about their satisfaction from the company. It cannot however, correspond entirely with individual or the organization concerned. 360 degrees appraisal involves the combination of the above means. It can be used in the sales industry. Provides holistic perspective of employees, key performance areas are emphasized and gives strengths and weakness of employees. It is however very expensive to use given the very many means and methods used (Cardy &Leonard, 2011). Rating the performance Uses techniques; forced ranking, forced distribution, paired comparisons among others. Forced ranking involves ranking employees from best to worst. Compares each employee to the rest to come up with the ranks. Forced distribution on the other hand involves assessing each worker whether he achieved the set standards for example whether exceeds expectations, meets expectation or does not meet expectations. These methods are advantageous in that they help in creating and sustaining high performance and eliminating underperforming workers. It also informs workers about their performance. It is however detrimental to morale, individualistic, promote competition and invites legal action (Aguinis, 2012). Paired comparisons involve comparing each worker with every other worker in certain selected group. Certain aspects of each worker are noted and the final ranking is obtained by how many times is better than others. This method may involve: essay method, critical incidents method, forced choice, graphical rating and behaviorally anchored rating scales. Its disadvantages, is that this method is cumbersome when large number of employees are being assessed (Cardy &Leonard, 2011). It is also demotivating to employees, introduce individualistic ideas in the organization and promote unhealthy competition among workers in the organization. It can however be used to improve individual piece rate performance especially where regular activities are common and does not require much supervision. The various types of performance evaluation use the following appraisal techniques: 1) Overall assessment technique, this is where an overall judgment about the worker is given. This may be not the same in criteria, areas of assessment, and not convey clear judgment. 2) Guided assessment, assessors comment on various characteristics concerning the worker. This technique is more precise and can be used for comparisons. 3) Grading, different levels of grades or degrees are given to workers by the assessors depending on their perspectives concerning the workers. 4) Behavioral incident method, workers attributes are measured depending on how they respond when faced with different situations other than generalizing the workers behavior. 5) Results oriented schemes, analyze workers depending on their output in a given production or business activity. This can be done to each worker or in groups or teams of workers. Performance evaluation is thus a wide area and carried out using different methods and techniques depending on the type of organization and type of work performed. Reference Aguinis, H. (2012). Performance Management. Boston: Prentice Hall PTR. Breakwell,G.M.& Millward, L.(1995). Basic Evaluation Methods: Analysing Performance, Practice and Procedure. San Francisco: Wiley. Cardy,R.L. &Leonard, B. (2011). Performance Management: Concepts, Skills, and Exercises. New York: M.E. Sharpe. Read More