Performance Management System Development For an Organization

Subject: Management
Pages: 5
Words: 1620
Reading time:
7 min
Study level: PhD


Performance management is a plan of action that originated from North Carolina. It requires an organisation to have operative performance management system. As a generic phrase, performance management system may mean effectively utilizing interconnected strategies and events to advance the performance of various individuals, organisations and teams. A successful performance management system would put together and support organisational, business and individual setting up and performance. It also helps give way in which good performance will be recognised and compensated and to deal with deficit performance of staff (Bacal, 1999).

According to Rao, T and Rao, V (2004) supervisors and managers are required to manage performance of their employees to ensure employees are focusing their energy in a manner that leads to achievement of organisation’s mission. Performance management is comprised of three steps: (a) coming up with performance and rating actual performance in comparison with performance expectation (Rothwell, 2001).

Statement of point of view

According to Redman and Wilkinson (2006) organizations develop a performance management system that is suited to the organizational culture, structure, competitive strategy and key performance requirements because of the longing to attain an effective performance system. Mostly effectiveness is attained when organization’s values and code of conduct are upheld and followed by the bosses. In the same way, employees are required to uphold organizational values and act in accordance with the code of conduct (Armstrong & Appelbaum, 2003).

Constitutes a performance management system

A performance management system is a tool that helps to measure the organization performance, employee performance, and even long-term assets performances. Murphy and Cleveland (1995) believe that it provide guidance in measuring the level of performances in any given organization or company. Performance management system involves three steps: (a) setting of employee performance expectation, (b) ensuring communication exist between supervisor and employer to make sure performance is as planned and (c) comparing actual performance attained to performance expectation (Schneider, et al, 1995).

Richard (1996) suggests that supervisors and managers are required to be in charge of performance of the employees under their jurisdiction. Every organisation set policies that help to identify and guide the activities and conduct of performance management. Therefore, each organisation must develop policies that dictate how the three phases of employee performance management will be conducted (Ashton and Felstead, 1995). Organisation ought to acquire performance management patterns that in line with the demands of labour laws and company’s strategy. This will ensure that the company achieves its mission and objectives without contravening labour laws and its own policy (Armstrong, 2000). The steps followed in developing employees’ performance management system are discussed in detail below:

Setting employee performance expectations

Fundamentally, the managers and employee supervisors are mandated to identify and respond to the concerns raised by employees concerning their duties. This will eventually guide them in setting up employee performances expectations. There are three steps used to set employee expectations. The first one is to involve employees in the process. The managers and supervisors fix meetings with their employees at the beginning of the work cycle. During the meeting, employees are shown clearly how their actual performance will be rated and achievements measured. Employees are told that if they achieve their individual goals, the organization will also achieve its overall goals. The employee managers and supervisors move ahead and set goals for each employee. The second step in setting employee expectation is to write and document employee expectation as per the company’s work plan. The third and final step requires the supervisor and employee to append their signatures and the dates as per the work plan (Ab. Aziz, 2003).

Sustaining the current performance dialogue

In Dessler’s (2000) view, attainment of performance expectation is the responsibility of the employees. Therefore, they are encouraged to meet requirements as rated. In addition, employees should report and record their level of performance at all times in their work cycle. This will help both the employees and the supervisors to track down performances in their departments. Supervisors should be proficient in their supervisory skills in order to handle their employees well. Therefore, they need to be professional and emotionally intelligent to be able to guide employees successfully in the performance appraisal. Supervisors are also required communicate with their employees during the work cycle. Consequently, supervisors should inform employees about the changes affecting them and their work as they happen. Finally, the supervisor and employee must sign and date any alteration made to the performance evaluation system.

Carrying on yearly performance appraisals

When the work cycle ends, Emma and Bryman (2003) point out that supervisors are required to evaluate performance of employees’ under their jurisdictions for the past year. Employee evaluation is conducted by comparing actual performances with the planned performances set earlier in the performance management system. Supervisors should then use affirmable data collected and recorded all over the work cycle to gauge the level of performance of their employees. Evaluation is recorded in a standard form as stated by the organization (the number of standard appraisal form chosen by an organization is based on nature of work being). The organization annual performance appraisal uses a 5-level Likert rating scale to give an account of overall performance. Rating at midpoint of the scale shows that employee’s performance met the set goals. While ratings that fall to the far left indicate that the employee performed below expectation. The organization requires the supervisor to consult next level manager for review to make sure ratings are suitable and in order before discussing a completed performance appraisal with an employee. Thereafter, both supervisor and employee talks about the appraisals. Finally, the finished performance appraisal showing discussion that took place is signed and dated by relevant persons (Atkinson, 1997).

Effectiveness of a performance management system

According to Thomson and Steve (1997), it is important to address poor performance, in case employee’s performance does not meet the set expectation at the period of performance cycle. Next, the supervisor records the performance inadequacy and the rightful action is taken and if necessary disciplinary action will be carried out to ensure performance expectation is met within the required period. It will involve documenting performance that is below expectation by creating a corrective action plan. The documentation will state (a) Performance problem (b) period set for betterment of performance (c) the aftermath of failure to improve and date is set for follow up. When employee’s actual performance has become better and expectations are met, a corrective action plan is taken to be successfully accomplished (Bratton & Gold, 2001). The organization performance management plan is important as it states the action of connectedness between disciplinary plan of action and performance management. Therefore, performance inadequacy that happens during the performance cycle will be cited in the yearly performance appraisal (Kaplan & David, 1996).

Therefore, employee performance system is important because it will point out areas of employee weakness and thus help in developing appropriate curriculum for employee refresher courses if it needed. The system will also assist the supervisors to manage the employees of the company under their jurisdiction with a lot of ease. The system will require organization to train managers and supervisors on management of employee’s performance and that obligation for coordinating the fundamentals of the performance management system be distinctly allotted. As a result, the managers will be able to administer the performance system. The performance system dictate to a greater extend the actual performance of company employees (Brown 1996).

The performance management system shall define the roles of key personnel and committee who shall be responsible for ensuring that the system is working as planned. As a result, there shall be a performance management committee mandated to monitor the performance management system in addition to complying with the company’s policy and country’s labour laws. In addition, the human resource director shall report to the company’s management board after every six months on the activities of the performance management systems. This will ensure that the performance management system is supported from the top before it trickles down to the supervisors and employees in the organization. Every department shall evaluate own management system every eighteen months to determine if it is efficient and effective. Incase of inefficiencies, remedial measures shall be taken to improve the performance management system. The departments shall also offer recommendation to the managing board as to how the system shall be improved. The findings from evaluation would be reported to the company’s managing board annually (Arthur, 1994).


The performance management system shall provide clear and concise way of setting employee performance expectation, sustain present performance discussion as well as carry out yearly performance appraisals. In addition, the performance management system shall be able to calibrate employee performances in accordance to company’s policies and expectations. The system will provide clear guidelines to the employees about the quality and quantity of work they are expected to deliver to the company. In addition, the employees will have the capacity to evaluate their own performances and determine whether they are performing as per the required standards. Consequently, the employees will be able to rectify inefficiencies and ineffectiveness present in them at any given time in their duties. The system also helps the employees to identify their area of weakness during discharge of their duties and provides suggestion for further training to correct the anomalies that exist in them. Therefore, employees shall have their opportunity to improve knowledge and skills in their area of engagement.

The performance management system has clear guidelines on when and how the employee shall be rewarded for their service to the company. This assures every employee fair distribution of monthly rewards and increments to their monthly earnings in line with their efforts and productiveness to the company.


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