A performance management system is a tool used by HR Managers to measure and analyze employee performance. Organizations use this system to help their workforce enhance productivity by improving their performance over time.
Performance management systems typically cover performance appraisals and employee development & are the “Achilles’ heel” of human resources management.
They suffer flaws in many organizations, with employees and managers regularly bemoaning their ineffectiveness.
A recent survey by Watson Wyatt showed that only three out of 10 workers agree that their company’s performance management system helps improve performance. Less than 40 per cent of employees said their systems established clear performance goals, generated honest feedback or used technology to streamline the process. While these results suggest that there may be poorly designed performance management systems in many organizations, it is typically not poorly developed tools & processes that cause difficulties with performance management. Rather, difficulties arise because, at its core, performance management is a highly personal and often threatening process for both managers and employees.
Possible Outcomes from Effective Performance Management
Q Clarifying job responsibilities and expectations.
Q Enhancing individual and group productivity.
Q Developing employee capabilities to their fullest extent through effective feedback
Q Driving behaviour to align with the organization’s core values, goals and strategy.
Q Providing a basis for making operational human capital decisions (e.g., pay).
Q Improving communication between employees and managers.
Component of Performance Management System adopted by industries in current time:
- Performance Planning: This is the first component of PMS which forms the basis of
performance appraisal which includes alignment of goals with the organization’s objective.
This is done at the start of the performance session and is mutually done by Reporting
Officer and employee on the goals and Key Performance Areas that need to be
performed and achieved during the year.
- Reviewing Performance: The performance review is done twice a year in the form of
mid-year review and annual review at the end of the year. In this process first self-assessment
is done by the employee himself based on goals and KRA’s achieved by him after that
assessment is done by the Reporting Manager and Reviewing Manager based on goals
and competencies of employee and rating is given which further goes under
normalization ( Committee Review in some cases) and the final score is given.
- Rewarding Performance: This step is the most vital step as rewarding the right employee in the right
way is very important to motivate employees to work done. Public recognition is given
for good performance, so Increment, Promotion and Recognition an important aspects of
- Development Planning: This is the last stage in the Performance Management System where
Planning for required development after assessing the employees is done based on
area or department in which they are lacking which is done by Training & Development,
Leadership Development, Succession Planning. The main motive of PMS is to assess
for improvement and better performance of employees through which efficient &
effectively organizational goals can be achieved.
Author: Dr Nakimuli Mariam – ONC Administrator.