Performance management is a set of actions aimed at bringing together departments, employees and processes to contribute to the achievement of the organization’s goals and objectives (Bacal 1999). Executing a performance management involves setting goals that support an organization’s objective and promote adequate performance. A clear understanding of an organization‘s objective before setting up a performance management plan is crucial. This is because the direction of the organization’s development is determined by the ability of managers and supervisors to elaborate effective employee management plans to achieve the planned results. Bacal, (1999) asserts that performance management from its inception has been seen a standalone process which has since become an approach that has created a shared vision with the goals and objectives of the organization. This has encouraged each employee to distribute and share workloads to ensure organization’s attainment of its goals.
Types of Performance Management
There are three main types of performance management levels in the organization.
Employee Performance Management
This is geared towards appraising the performance of employees, by measuring their contribution towards achieving of the organization’s goals and objectives. The success of any employee performance management depends on proper planning in terms of matching work, and employee competence and consistency in relating to goals and objectives to be achieved. Employee reward and recognition systems can create and boost the morale of employees and impact positively on the organization. Performance appraisal systems and fair reward programs which are effectively designed enhance the motivation and make employees desire to exceed their performance targets at the workplace (Moore & Walker 2011).
Assessing the Individual Performance of Employees
Different parameters are normally used to assess the performance of the employees in their places of work. Some of these parameters include enthusiasm, customer orientation, technical expertise and team loyalty. The performance of the regular non- managerial employees is normally assessed annually at the end of the year. The test scores of the employees on the overall training are also normally considered as some of the parameters in evaluating the performance of the employees (Sonnentag, 2002). In addition to the programs in place to enhance performance in the organization, the management should institute a policy on promotion that encourages the performance of the employees in the corporation. In the same vein, the recognition of employees who demonstrate exemplary performance should be enhanced in the organization through the various means.
In cases of employees who do not perform their duties up to the expectations, care should be exercised in addressing their concerns. There should be dialogue with each one of them to establish why they are not coping with their job. After all that is done, those who cannot be sustained by the organization should be dismissed.
Compensation and Benefit Packages for Employees
According to Ivancevich, (2010), compensation is both diverse and challenging functions in the human resource field since organizations have to constantly investigate the best methods of rewarding employees for performance. It is probably the single most important motivating factor to an employee as it provides the means for livelihood, either in monetary or non-monetary terms. Organizational compensation programs and benefit packages must be clearly explained to employees. This helps them understand what they should expect from their employers in terms of monetary and non-monetary rewards. This, in turn, aids in the process of conducting the performance appraisal exercise.
Benefits constitute a greater percentage of an employee’s total compensation package. Though benefits are not direct cash rewards, they do have monetary value and are meant to attract, retain and motivate employees. In most developed countries, such benefits are non-taxable to the employee and consequently deductible by the employer. Benefits or incentives are given to employees either on individual or team performance.
According to Dessler, (1991), the combinations of effective performance appraisal systems with fair and equitable compensation benefit packages result into improvement of employees performance. This is attributed to the fact that employees are more informed and knowledgeable on the objectives which they are expected to achieve. This also increases the chances of attaining the goals set by the employer because employees are motivated to work knowing that an award will be given at the end of an accomplished task. Performance appraisals and fair reward systems show recognition to employees by exemplifying those with outstanding abilities and enhancing on their personal development. Employees feel valued by the organization and this reflects on their improved work performance (Perry-Smith & Blum 2000).
In tandem with the path-goal theory of motivation, fair appraisals and equitable reward systems will enhance motivation by keeping the employees goal oriented. Such systems will also instill a feeling of self-worth in the individual thereby making employees want to achieve and exceed their set targets (Baldwin 1999). According to Kinne, (2000), equitable and fair reward systems coupled with objective appraisal processes psychologically influence the behavior and attitude of employees towards their work, colleagues and the organization. Additionally, they also provide lucrative conditions and terms of employment.
Provision of meaningful rewards and benefits to employees also creates a sense of respect by promoting employee ownership of organizational programs. It also cultivates a feeling of employee responsibility and emotional involvement since they will be fairly and objectively appraised, and consequently equitably compensated (Ivancevich 2010).
Individual Performance Management
This type of management is conducted at the strategic level with an intention of improving the overall performance of employees. In addition to making vital decisions, performance management holds the responsibility for checking the performance of line and divisional managers (Armstrong 2006).
Divisional Performance Management
This revolves around analyzing the performance of departments in different periods, with the intention of identifying each department’s contribution to the organization. Departmental performance management also helps the organization to identify and scrap off inefficient departments (Bacal 1999).
The strategic human resource plan of the company as related to employment is in the development of a culturally and socially diverse group of workforce. That would provide the company with the needed human capital for its present and future growth plans. The plan is divided into the six main components:
- The restructuring strategy itself, where the work of each employee of the firm is reviewed on the basis of his/her merits before he/she is up for any dismissal.
- The job groups shall also be selected in such a way that they will provide the human resource management team with the opportunity to assign tasks to any diverse group.
- The company shall implement training and development programs that should allow any new or existing staff member to take on any new roles with ease.
- The company’s recruitment strategy will have to consider the inclusion of a diverse group of recruits.
- The company has to open up some tasks to other individuals through outsourcing. Apart from helping the business to save money, this will also provide it with an opportunity to work with a diverse group of individuals.
- Finally, the human resource department will need to work collaboratively with different organizations, so as to benefit on skill sharing opportunities.
The training programs will ensure that those, working under the firm, will not become redundant in their duties. The company may, therefore, avoid any lawsuits connected with the discrimination due to the age group. The talent pool that the company will select will cater for any discrimination according to age, race, color or religious orientation (Bandt & Haines 2002). This will be best achieved by using the various media sources in order to advertise for any open position in the firm. The collaboration gives the company an opportunity to tailor the courses that are taught to staff, both management and workers, so that the content taught is in line with the Equal.
Basically, any attempts to change are usually faced with resistance. The status quo options can threaten employees who are interested in their normal way of doing the job. When employees are well motivated, they also perform well in their service delivery to an organization. Motivation can be in a form of monetary rewards, trainings and staff trips that expose employees to better office practices and management. Much acceptance will also not be increased by the attempt aimed at good performance as done by the status quo. Proactive firms try to overcome these problems being the chiefs of the changes. Through resourcefulness, alternatives that are cost effective can be provided to the status quo; with inspiration and determination being perceived to be very essential in ensuring that the alternatives are seen through to the final acceptance (Camm et al. 2001).
Using Incentives to Provide Right Behavior Motivation
Behavior can be stimulated by the metrics if connected to the incentives. Based on the organization culture, teams, individuals, or firms are usually targeted by the incentives (Camm et al. 2001). These could either be the monetary or the non-monetary incentives. With such offers, the action importance taken across the business is expanded. For the success of the realization of change, there must be the capability of obtaining the services and goods while performance is allowed, in a case where the performance methods should not be dictated (Spitzer 1996). This will demand tutoring employees together with their ability to act.
Communication in All Directions
The information on status and goals is essential for the realization of change. To enhance success, information should be designed in order to; communicate the knowledge concerning performance wholly; convey the responsibility of the senior leadership; ensure it is a reflection of the strategic goals; to maintain the change momentum; to promote active information exchange and communication of the information (Hartmann & Khademiah 2010). Due to cooperation between the GE and the state partnership, the use of permanent communication helps improve the work practice. The value of communication is quite crucial for realization of the common goals.
Methods of Measuring Performance
Ascertaining the level of customer satisfaction
In order to achieve customer satisfaction, organizations should use ways that are cost effective. For example, they can develop effective channels for customers to provide their feedback concerning their products and services (Davison et al. 2010).
Internal comparisons help an organization to compare the productivity levels of different departments, and provide vital information for any declines or improvements in performance levels. Besides, internal comparisons help in the identification of the most productive units (Davison et al. 2010).
The Importance of Performance Management
- Performance management helps in the division of labour among employees, and in prioritizing jobs in terms of urgency of completion (Cardy 2003).
- In addition to ensuring an effective planning processe, shareholders have a surety that their resources are properly invested in organizations (More Business 2011).
- Through performance management, employees are able to undergo training and development programs, which will improve the quality of goods and services and enhance customer satisfaction (More Business 2011).
The importance of performance management cannot be underestimated and must be efficiently implemented. The drivers of performance management should maintain proper and transparent communication systems that inform an employee of the intended goals and expectations.
In conclusion, the performance management process is an integral part of most organizations. When it is properly developed and implemented, the performance management process can immensely help an organization in achieving its goals and improving productive levels. Just like the water is vital for the fish, performance management is the ‘oxygen’ of any organization.