“Effective performance management is more than a once a year formal-appraisal event. It is an ongoing process with continuous review and feedback.” ₃I have already mentioned some key stages such as performance measurement, training and feedback. This whole process is often costly and time-consuming. Let’s compare a local entrepreneur, who owns five small grocery-stores in the north-west, to a large multi-national corporation such as Siemens, which is a market leader in various industries and has a workforce of over 400,000 people worldwide. It seems much more practical for Siemens to put into place an effective performance management system and to gain from it, whereas the aforementioned entrepreneur, with perhaps only 100 employees, is likely to benefit most from a tried-and tested appraisal scheme. So unless a firm has a lot to gain from a performance management approach and the benefits outweigh the costs then I would recommend that they concentrate on improving the methods, which they already have in place.
Many types of performance management systems have been used in the past. One procedure that can be used is an objective-based method. Both the appraiser and the appraisee can set objectives. When setting these, they must make sure that they are “SMART” (an appropriate acronym). That is;
S Specific Exact requirements must be understandable to both
employer and employee
M Measurable Assessable targets and outputs
A Agreed Agreement between management and employee
R Realistic Achievable and fair objectives
T Time-related Clear target dates ₄
It is an excellent idea – in theory that is, because in reality these objectives may be less workable; these measures and their subsequent descriptions simplify the process of performance management. Not all jobs have easily assessable outputs. Objectives which may be effortlessly realised by one employee may not be quite so attainable to another and an individual “may accept difficult targets for a quiet life [...] or to save face in a meeting.” ₅It is difficult to set objectives which take into account smaller, seemingly less important elements of the job, which are however still critical to the organisation. Qualities such as innovation or intuition, which an individual can bring to a job, may be overlooked in favour of short-term success even though they could greatly benefit the firm in the long term. This is another issue: short-term success in favour of long-term success. In a firm where there is a hierarchy and individuals must report to their superiors, facts, figures and short-term success may be much more important than long-term success.
The biggest problem with managing individuals is that every human being is unique. It is difficult – in some cases impossible - to find a motivating factor which is pleasing to everyone concerned. Of course, “the relationship between performance and award is self-evident.” ₆If used appropriately and in relation to performance rather than output it can be a strong incentive. However, money isn’t the only motivation factor and “linkage of pay [to appraisal] may affect the honesty of self-appraisal and interfere with development objectives.” ₆ When an individual is aware that an appraisal could affect his future salary or bonus, he may work harder in the weeks previous to it so that this work is taken into account when his performance is evaluated, and he may not admit weaknesses, even though he may be able to overcome them in the training and development programmes.
It is worth taking other factors into account. We each have a level of needs. It begins with ‘lower level needs’ such as a wage, however “the man whose lower level needs are satisfied is not motivated to satisfy those needs any longer.” ₇He will then want to satisfy his higher-levels needs, which include safety and independence. Some people are ‘underemployed’; that is, their talents may be going to waste. We each have “self-fulfilment needs – needs for realising ones own potentialities, for continued self-development, for being creative...” ₈It varies between individuals. The need for certain status is also a strong motivator. It is usually up to a supervisor to find out what motivates his group most and as you can see, this may be very difficult.
The ability of a supervisor to motivate his group is important, but performance depends on ability as well as motivation, and high motivation doesn’t always result in high productivity. However effective training, clearer job descriptions and clearer standards of performance being laid down can increase motivation. The supervisor has a difficult role. A successful evaluation requires an exceptional amount of knowledge about a job; otherwise an accurate judgement of the quality of performance cannot possibly be made. It is fair to say that no individual has perfect knowledge, so this task is impossible. This is another problem with performance management. We are prone to bias. An employee with a fantastic sense of humour may receive a better evaluation than his quieter, perhaps harder-working colleague, simply because they are in our favour.
We live in an increasingly competitive world. The media promotes wealth, and everybody wants a slice. In the United Kingdom borrowing has increased dramatically in recent years. We are no longer afraid to accumulate massive debts; loans, credit-card bills and overdrafts. People want a lavish lifestyle with large houses, flashy cars, the latest fashions, and the most up-to-date gadgets. Firms want us to spend our money in their stores; therefore they must provide something extra. If performance management can give them a little ‘extra’ then of course it should be followed. As I have already said, I believe that performance management is still a new concept; much work still must be done to increase its effectiveness. In the future when this is accomplished the potential benefits for improving employee ability and motivation are too great to avoid.
₁ http://www.q4solutions.com/articles/article43.html
₂ “Personnel Management – The Utilisation of Human Resources” Chruden and Sherman JR, P. 174
₃ “Employment Resourcing” Corbridge and Pilbean, p. 203
₄ “Employment Resourcing” Corbridge and Pilbean, p. 203-4
₅ “Supervisory Management – Principles and Practices” David Evans, p. 297
₆ “Employment Resourcing” Corbridge and Pilbean, p.208
₇ “Readings in Personnel Management” Chruden and Sherman, p.164
₈ “Readings in Personnel Management” Chruden and Sherman, p.163
