This report will aim to demonstrate knowledge and understanding of what performance management is and its purpose. Key elements will be outlined for an effective appraisal and reward system and show how this links to business objectives.
What is Performance Management?
Performance management is, “A process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance”. (CIPD, 2009)
As explained by (Team Technology, 2009), Performance Management can be used as a “way of maximising performance of an individual, team or organisation and be a process for dealing with underperforming individuals (or teams).” This points towards HR being more involved in identifying top performers and those individuals not quite meeting company expectations.
Ultimately, performance management must be “consistent, fair and transparent.” (Sally Whittle, Personnel Today, 2008)
Key elements for performance management are based on planning, action, monitoring and review for an effective system as outlined in the diagram below provided by (Scottish Government, 2005)
The purpose of performance management is to keep the work process dynamic, flexible, and responsive. This helps to engage the workforce in the right direction to incorporate company objectives.
(McKenzie Consulting, 2009), also outlines that the purpose is, “to drive improvement in business results through individual, group, and enterprise goal alignment, measurement, performance coaching and performance information sharing”.
Tools associated with performance management are:-
* Dealing with absence management * Disciplinary and grievance * Strategic planning * Appraisal * Career learning and development * Pay and reward * 360 degree feedback * Coaching * Succession planning * Business targets
Performance appraisal is an important tool of performance management to manage performance. “The performance appraisal is often the central pillar of performance management. The performance management survey carried out in 2009 found that 81 per cent of organisations used individual appraisals.” (CIPD, 2010)
Performance management is managing individuals and teams effectively to achieve high levels of organisational performance. Performance appraisal differs from performance management as it concentrates only with the individual and their performance and development.
“Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.” (Archer North, 2009)
The appraisal process provides an opportunity for the individual and their line manager to discuss the individual’s performance, development and the support required from the manager. Past behaviour will be reviewed and reflected upon to establish a basis for development and improvement plans.
An effective appraisal will review an employee’s performance and potential. Some companies also link this process to the reward review by highlighting recognition of goals and achievements. “Hertzberg implies that recognition is a strong motivational tool.” (Chapman, 2009).
The appraisal will help identify strengths and weaknesses in the individuals work which will help assess areas to improve their job performance and measure development needs. The individual spends quality time with their line manager which builds stronger relationships. Self assessment and evaluation are a vital part of the appraisal and although the process is designed around two-way feedback, the individual should be encouraged to do the majority of the talking. “One