Performance Management System

Definition

Performance management systems can be the tool which can be used for communicating the organization goals for their employee as individually, allotments of individual accountabilities toward those goals & track the progress to achieve the goal assigned as well as evaluate the performances of individuals. The performances management system can reflect the performances of the individual or the accomplishments of each employee, which is evaluating and keeping the tracks of the whole employees of an organization. (Simons, 2010)

Importance of Performances Management Systems

This can be a tool that is helping the managers for managing those resources as well as eventually resulted from it the organization’s success. (Simons, 2010) Performance management systems can be broader as well as complicated activity of Human resources. This is including activities like joint goals settings, continuous reviews of progress, frequent communication, and feedbacks of their performances and rewards their achievement.

The actions consisted with the performance management system can be as following:-

• Provide career development supporting & promotion guidance for their employees.
• Helping to give the regular feedbacks and coach in the periods of performances delivering.
• Through the suitable process of selections, select the correct people.
• Make clear descriptions of jobs and the plan for the employee performances.
• Arrange the training & development program according to the evaluation of employees’ performances.
• Conduct the exit interview for knowing the reasons to the discontentment from an organization.

Benefits of Performance Management Systems

Many advantages of the performances management system, which is improving the performance of the company, can be listed as follows: (Armstrong & Baron, 2014)

·         Performances based conversations: It is enabling the manager for talking on the employees’ performances as individually. It can assist their employees if they cannot well perform, at the same time appreciating them if performed well. 

·         Performances management systems are also helping to find the opportunities to the employee's developments that can be a crucial part of their processes of succession planning.

·         This is rewarding their employees who can be the good performers since those employees deserved the promotion could be easily recognized.

·         Their under performers could be found or eliminated or helped to improve their performances with many programs of training & development.

·         Employees 'past performances record maintenance with the systematic orders that could be used to the future reference.

·         Employees themselves will gauge their performances and works upon that accordingly.

All those are showing the how performances management systems are boosting the output and productivity of the organization.

 Performance Management System's Components

Performance Management Systems are helping to ensure the high efficiency, quality, good productivity & constant performance monitoring, the typical performances management systems are having the following components as well: (Simons, 2010)

Figure 1 - Performance Management System's Components

1. Establish the Performance Standard

• Identification of relevant standard
• Selection of indicators
• Specification of targets and goals
• Communications of expectation

2.  Measurements of performances 

·         Refine the current indicators & define its measure

·         Develop the data system

·         Collect the data

3. Processes of Quality Improvement

• Make the decision by use data & improving the outcomes, policies & program
• Change management
• Creation of learning organizations

4. Progress Report

• Analyze of data
• Providing feedback to their, policy makers, managers, etc.
• Establishment of appropriate & regular cycle to report

Purpose to implementing Performance Management System

Manage the performances of the employee can be the main objective to establish this systematic Performances Management system in a firm. (Armstrong & Baron, 2014)

• Strategic – aligning with the whole organization's goals followed by the goal of department & individual.
• Administrative – setting the determination factors such as promotions, demotions, salary increments, transfers & termination.
• Communications – This can be the effective channel of communications for informing the employees regarding that goal, job responsibilities, key deliverables & performance standard. Moreover, this can be also the structure tool for indicating the major area to be improved by an employee for improvising their performances. That means it is providing a platform for learning & improving their skill, & knowledge to get better performances & results.
• Developmental – this can be the structural method to communicate the positive feedback, improvement area, & plan of development. The managers will use many methods such as mentor, training, coach etc. For getting better performances from their employees. (Armstrong & Baron, 2014)
• Maintenance – Performances management systems can be the yardstick to measure their employees, departments & achievements of organization & evaluate the performance gap by different techniques and tools. So, this is maintaining the organization's health as well as their performance standard.
• Documentation - The performance management reviewing, feedbacks and form must be maintained & documented regularly by all organizations. This can enable the organization for looking forward, setting the new target, designing the developmental requirements, designing the program for training & learnings, and career progressions of their employees & departments. So, this can help to drive the organizational requirements for its desired objective.

References 

Armstrong, M & Baron, A (2014), managing performance: performance management in action, CIPD, London

Bouckaert, G. and J. Halligan (2008). Managing performance: international comparisons. London: Routledge

Furnham, A. (2014), Performance management systems, European Business Journal, Vol. 16, Nr. 2, 83-94

Helm, C.,Holladay,  C.L.,&Tortorella,  F.R.  (2007). the performance management system:  applying and evaluating a pay-for-performance initiative.  Healthcare Management.

Holloway, J., Lewis, J. & Mallory, G. (2005), Performance Measurement and Evaluation, Sage, London.

Bhattacharjee  S.,  Sengupta  S.,  A  study  of  performance  Management  System  in  a Corporate Firm, VSRD-IJBMR 1(8)

Simons, R. (2010), Performance measurement and control systems for implementing strategy: text & cases, Prentice Hall, Upper Saddle River, NJ