Nowadays, performance management (PM) plays an essential role in every company’s development, especially for those providing services. The main task and advantage of establishing an appropriate performance management system (PMS) lays in its ability to increase an organization’s effectiveness. This essay is aimed to present and discuss the primary information on PM in terms of what it is, which tasks it covers, and how to establish a healthy PMS.
What is performance management? Performance management is an ongoing process of interaction between staff members and HR managers aimed to ensure that current outputs and activities are efficiently aligned to the organization’s goals (Ashdown 3). PM does not consist only of HR programs, which, in practice, are parts of the integrated system. The PM process should be strategic in perspective, instead of being event-driven; thus, all actions should be brought to an agreement with organizational objectives.
Which tasks does it accomplish? Managers usually seek to increase a company’s performance in order to increase revenues and decrease costs. The ideal PMS should deliver such outcomes: goal alignment, employee awareness of required outputs and inputs, high motivation and contribution, and performance intensification (Ashdown 8). In other words, PMS sets goals to meet organizational objectives, precise requirements for managers and workers, performance, and training plans.
How to establish healthy PMS? The first step is standards establishment and setting of goals, which can be measured by supervisors. The next step requires raters who are prepared and non-biased to assess actual performance. Then the documented results should be compared with standards the company set before. After that, the appraisal outcomes should be discussed with individuals. To be ideal, PMS should be company-specific, set to deal with individual strategic priorities. One of the best appraisal methods is BARS, which requires a special behavioral rating scale. HR managers have to apply rater training programs to decrease the number of typical errors such as the halo effect and central tendency (Gorman et al. 2). The company can choose from four main training programs: performance dimension, rater error, behavioral observations, and frame-of-reference training.
To conclude, a performance management system is a tool used by managers to align employees’ goals with the organization’s ones, as well as to assess and improve staff performance. The main task of PM is to highlight the underperformance and devise the change, which will improve the company’s effectiveness. A sound performance management system should be company-specific what requires clear individual goals and trained raters.
Ashdown, Linda. Performance Management: A Practical Introduction. 2ed ed., Kogan Page Publishers, 2018.
Gorman, C. Allen, et al. “Current Trends in Rater Training: A Survey of Rater Training Programs in American Organizations.” Trends in Training, edited by Brian J. O’Leary et al., Cambridge Scholars Publishing, 2015, pp. 1-25.