Performance Management and Human Resources Efficiency

Subject: Employee Management
Pages: 5
Words: 1155
Reading time:
5 min
Study level: Master

Performance management is a fundamental aspect of the human resource (HR) department. In modern organizations, it is essential to create a work environment that supports and enhances the most qualified worker’s productivity. A systematic approach is formed to engage with personnel throughout their employment and maximize the use of human capital for the company. The following research will explore key concepts of a performance management system focusing on employee improvement and its implementation in a non-profit human services organization.

Key Components

Performance management at its core seeks to maximize employee efficiency in any given organization. It is a continuous process that gives management means to strategize, monitor, and evaluate the completion of occupational objectives. In order to establish an effective performance management system, an organization should have an appropriately selective hiring process, comprehensive training, competent supervision, and a supportive work environment.

The system can be modified to fit most professions and roles within an organization. As a human resource concept, it is heavily employee centered. A hiring process that is fair, considerate and unbiased is crucial. Once an employee is hired, he receives extensive training and staff integration. In the beginning and throughout the employee’s career, their needs and health should be respected (includes creating an appropriate work-life balance). At all points, there should be administrative support as well as financial and career improvement opportunities for all staff members (HRCouncil, n.d.). A dedicated support system within an organization leads to positive work performance in its staff.

Strategic performance management can create sustainable advancement in organizational performance and output. It is the driving force behind the human capital utilization of a company. This is done through employee guidance, team cohesion, improving work process, and competent supervision. The entire process of performance management consists of setting goals, developing strategy, forecasting workforce efficiency, and finding meaningful means of review and incentive (De Waal, 2013). Annual reviews are a common method of employment evaluation. However, a more efficient performance management system is continuous and cyclical. The three stages consist of planning, monitoring, and reviewing.

The first phase of strategic planning is collaborative, as employees communicate with their supervisor. It begins with identifying the most basic responsibilities and expectations of the position, particularly to inexperienced employees. A plan is developed for the work that must be achieved in a set period. This can be individual or among specific teams. Each employee’s talents and contributions should be maximized in their respective assignments. While such approaches are short-term, there should be more long-term objectives on key performance, contribution to the organizational mission, and career development. It is important that these be specific, realistically achievable within a set timeframe, and measurable in some way so that there is an indicator of achievement (HRCouncil, n.d.).

The second phase focuses on monitoring progress, both on projects and overall development. Managers should avoid micro-management, but rather observe and support. This phase focuses on increasing productivity and eliminating any obstacles. Feedback regarding short-term goals is appropriate through the concept of continuous coaching. Finally, the third phase encompasses review and evaluation. It is critical for making conclusions about a fixed period (usually a year) that the employee worked in the organization. There are several aspects to this step, beginning with self-assessment.

This gives the manager a distinct perspective and indicates where an employee may struggle. During this period, an evaluation of the set objectives and measured indicators occurs. Accomplishments in performance may lead to career growth. There should be a strict documentation and peer-review procedure to avoid any possible bias should an issue arise. This stage is critical to employee growth, as a comprehensive overlook gives perspective to professional development. Constructive feedback gives highlights potential areas improvement. Meanwhile, incentives have a psychological effect of inspiring work ethic moving forward.

Overall, the review part of the cycle should be conducted on a constant basis. The focus should be on employee improvement rather bonuses and corporate rankings, which are often detrimental to personal worth. Also, studies suggest that shorter (quarterly or project) reviews have more positive effect on productivity. This allows to make improvements immediately rather than waiting for a prolonged time before any major changes are made (Buckingham & Goodall, 2015). Constant development is necessary for the company growth.

Implementation in Non-profit Organizations

Non-profits compromise a diversified sector of human services. Most organizations have a specific core or mission which allows to focus on a niche population or social issue. They are small organizations that have deep community roots and engagement. This is something that is openly reflected on the employees. Non-profits are responsive to employee needs and vision while giving the staff a sense of satisfaction and growth. Nevertheless, it is still an organization which has similar operations and obstacles to that of the private sector.

Performance management is a critical aspect for non-profits. Human capital expenditures consist of more than 75% of total costs in comparison to 15% in profitable companies. Establishing an effective system would allow for more efficient finance allocation and dramatically increases employee productivity which has the most impact in non-profit operations. A key implementation would be to determine and monitor a measured rate of function and performance.

Staff in such organizations often has close personal relationships driven by the fundamental mission of social change. However, data sets allow a more objective analysis to determine the conversion of inputs (such as money and materials) into products or services on certain projects. In addition to these outputs, non-profits must also evaluate their mission progress based on met commitments and attracted capital for future investment (Macpherson, 2001). A non-profit organization must be flexible to change with its operations and always seeking to improve. This is done through accurate measurement of objectives, making necessary reports, and learning from the process.

Short-term outcomes are needed for daily function, but that gives the organization the ability to continue operations over a prolonged period. In turn, it can implement its mission usually focused on social change which takes decades to come to fruition. Changes that can occur over the cyclical periods of performance management can include changes in organizational leadership, varying strategies of approach to target populations, modifying models of offered service. Therefore, in a non-profit work environment, it is crucial to develop and preserve a culture of continuous improvement, collaboration, and complete dedication to find systematic solutions to operational functions (Root Cause Social Impact Research, 2012).


Performance management systems take a strategic approach to HR operations by maximizing human capital utility. It is a comprehensive method of planning, setting objectives, and enhancing productivity. These systems are centered around the employee, seeking to enhance their skill and give constructive feedback on their performance. In non-profit organizations, a performance management system is necessary to grow and achieve its mission through establishing a culture of continuous operational evolution. Through the achieved organizational capacity, a human services non-profit can efficiently work to serve the population and resolve social issues within its scope.


Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review, 93(4), 40-50. Web.

De Waal, A. (2013). Strategic performance management. Basingstok, England: Palgrave Macmillan. Web.

HRCouncil. (n.d.). Keeping the right people: Performance management. Web.

Macpherson, M. (2001). Performance measurement in not‐for‐profit and public‐sector organisations. Measuring Business Excellence, 5(2), pp.13-17. Web.

Root Cause Social Impact Research. (2012). Improving non-profit performance. Web.