HRM Essay 1 Performance Management

by theduke_jason (student)

University Degree Business and Administrative studies

Essay 1 Performance Management

Introduction

Performance Management is define by Armstrong and Baron as a strategic and integrated approach to delivering sustained success to organizations by improving the performance of people who work with them and by developing the capabilities of teams an individual contributors. (Millmore et. al., 2007, p.317). Performance management is important for individual, organization as well as the whole nation to met the set goals. Performance appraisal is one of the most important area in performance management and is essential to enhance the performance. As an overall, performance management will lead the organization strategy to be met. In this assignment, I will refer to website, book as well as the lecture note to obtain more accurate information and fact while will guide me along the way.

Body

Performance management is a system use by the organization to control and coordinate the input (workforce) to archive the optimum output. Effective performance management is to enhance performance, identify performance requirements, provide feedback relevant to those requirements and assist with career development. ( HAWKES, 1998).

The purpose of performance management included:

Translate the organizational vision and goal to fulfil the criteria of Specific, Measurable, Attainable, Relevant and Time-bound.
Provide a tool for accessing, managing and improving the organization health and performance system as an overall.
Assist employee identify and enhance their knowledge and ability to increase efficiency.
Evaluate and feedback regarding to the employee performance, and
Replace the existing assessment model with more consistent approach to performance management.

There are 5 step in performance management process:

Performance Planning, establishing the performance expectation for the employee as a guideline to archive the organization goals.
Monitoring Employee Performance, provides and recorded information regarding to the employee’s performance.
Employee Development, employee development is essential to increase the effectiveness of an organization.
Evaluating Employee Performance, evaluating employee performance and compare with the pre-describe elements and standards in an employee's performance plan and assigning a summary rating of record.
Recognition, appreciate the contribution of employee to the organization and hence rewards according to the performance and contribution.

Resources, capabilities and core competencies are organization’s foundation of competitive advantages. Resources are the source of firm capabilities and hence capabilities are the source of core competencies and core competencies contribute to a firm competitive advantage. A resource based approached is a powerful tool that can be use by an organization to determine the strategy resources that is available to a firm. The resources included tangible, intangible and human resources. Human resources play an important role to determine the success of failure of a company hence, performance management is essential to enhance the quality of the human capital.

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Performance management systems are designed to clarify objectives, assist in the management of individual employee performance and plan relevant training and development programs (Hawkes, 1998). It bare with the main purpose to improve the human capital in an organization and hence lead to efficiency and contribute in the productivity.

The performance management related to the implementation of the appraisal. Where the US Department of Commerce defined appraisal as the act or process of evaluating the performance of an employee against the prescribed performance standard(s). An effective performance appraisal system contains two basic system that is evaluation system and feedback system. Evaluation system uses to identify the performance gaps within the actual performance and the set goals while the feedback system used to inform the employee about the performance level.

McGregor (1987) stated that Performance Appraisal Objective can be classified into 3 types, which is administration, Informative and motivational. Administration means providing an orderly way of determining promotions, transfers and salary increases. Informative means supplying data to management on the performance of subordinates and to the individual on his or her performance. Lastly motivational means creating a learning experience that motivates staff to develop themselves and improve their performance. (DSP Kumar, 2005)

There are quite a numbers of performance appraisal that is available to be implemented. Different method focus on different factor such as behaviour based and resulted-oriented based appraisal.

Behavioural performance appraisal focus more on employee behaviour such as planning and organizing. Within behavioural method, employee can be evaluated based o organizational or department standard. (Anthony et al, 2002, p.367). Checklist refer to a list of descriptive statement and / or adjectives describing job-related behaviour. In simple words, checklist is a guideline listed down all the task needed performed by the employee. Critical Incident Method refers to highly effective or highly ineffective performance. Critical incident used to measures the performance of the employee. Evaluator will recorded the incident once it is happen and hence use for evaluation purpose.

Result-oriented performance emphasized on the result of the employee behaviour which refers to the extent of the employee reaches goals and objectives. Management by Objectives (MBO) is one of the common result-oriented performance appraisal. Peter Ducker designed a appraisal system by using result to improve the productivity, however research shows that the system highly depend on the commitment of the management and huge gap recorded which 56% of increment on productivity archive for management who support the implementation of MBO while only 6% recorded for firm’s management which pay less commitment. In MBO, goals and objective which fulfil the SMART criteria been set and published clearly to all the employee from top to bottom level, as to ensure it can be measured and quantified. The objective set come together with specific time period to accomplish and be determined by the supervisor of each employee. (Anthony et al, 2002, p.375).

O2 United kingdom (refer to appendix 1 for the company profile) may apply any of the appraisal systems as mention above such as MBO or Checklist as the company performance management system to develop the human capital and hence lead to the efficiency and productivity. This will directly improve the performance of the company as an end result.

Conclusion

As a conclusion, Performance Management is an important element in an organization as it will determine the success or failure of the organization. Performance management is often and highly related to the appraisal. A proper performance management system/ appraisal system is essential as this system play role to motivate the employee to improve and hence boost up the efficiency and productivity. However it is not easy to implement the appraisal system and appropriate manager should be appointed for the appraisal purpose to archive the best practice.

Referencing

Aberdeen Group Research Report, 2007. Enhancing Operational Results with Employee Performance Management. [Online] Available at [Accessed 22th April 2011].

Anthony, W.P., Kacmar, K.M. & Perrewé, P.L., 2002. Human Resource Management: A Strategy Approach. 4th ed. Thomson Learning.

Archer North & Associate, n.d. Performance Appraisal: Basic Purpose [Online] Available at [Accessed 22th April 2011].

Armtrong, M., 2006. A Handbook of Human Resources Management Practice. London : Kogan Page Limited.

Bergenhenegouwen, G.J., Ten, H.F.K. and Mooijman, E.A.M. (1996). Competence development a challenge for HRM professionals: Core competences of organizations as guidelines for the development of employees. Journal of European Industrial Training, 20 (9), 29-35.

Capko, J, 2003. 5 Steps to a Performance Evaluation System, [Online] Available at [Accessed 22th April 2011].

Chapman, A., n.d., Performance Appraisal. [Online] Available at [Accessed 22th April 2011].

Dessler, G, 2005. Human Resources Management. Delhi: Pearson Education.

DSP Kumar, D., 2005. PERFORMANCE APPRAISAL: The Importance of Rater Training. Journal of the Kuala Lumpur Royal Malaysia Police College, No. 4.
Hawkes, D.J., 1998, PUBLIC SECTOR EMPLOYMENT AND MANAGEMENT ACT:Employment Instruction Number 4: Performance Management, [Online] Available at [Accessed 22th April 2011].

Marr, B., 2006. Strategic Performance Management : Leveraging and measuring your intangible value driver, USA: Elsevier Ltd.

Millmore, M. et al., 2007, Strategic Human Resources Management: Contemporary issues. Pearson.

Salaman, G., Storey, J., Billsberry, J., 2005. STRATEGIC HUMAN RESOURCE MANAGEMENT : Theory and Practice. 2nd ed. SAGE In Association with The OPEN UNIVERSITY.

Schuler, R. S. & Jackson, S.E., Strategic Human Resources Management. 2nd ed. Blackwell Publishing.

United States Office Of Personnel Management, 1999. Evaluating Performance Appraisal Programs: An Overview .[PDF] Available at [Accessed 22th April 2011].