General Purposes Of Performance Management Commerce Essay Example

By leveraging this information to bolster strengths and strategize developmental assignments in deficient areas, one can anticipate enhancements in morale, motivation, and productivity (Mani 2002: 141). Nevertheless, if employees are discontented with the performance management system, it can result in diminished motivation, perceptions of inequity, and potentially even employee attrition. A study encompassing numerous employees across various departments revealed a robust correlation between employee satisfaction with the performance management system and job satisfaction.

The performance of an organization is directly linked to the performance of its employees. Implementing an effective performance management system is a challenging aspect of performance management. A successful performance management system is crucial for measuring and improving productivity. It is widely recognized that documenting, communicating, and targeting areas of performance are valuable.

According to Cederblom and Pemerl (2002: 131), many employees feel frustrated with the limited practical value of performance management in their organizations. The performance management process can serve as a tool for managing employee performance and as a precaution against expensive lawsuits.

According to Martin, Bartol, and Kehoe (2000: 379), performance direction plays a significant role in influencing the actions of employees within organizations. The increasing use of management practices in performance has resulted in greater consideration for employee legal rights. Other researchers also acknowledge that performance management practices are subject to employment laws. Performance management is an integral part of management, as employers aim to utilize it to manage employee performance and link outcomes to promotion, termination, salary, and layoff decisions. Employees are more likely to accept performance evaluations if they perceive the system to be fair and equitable (Roberts 2002: 334).

Charges of bias and favoritism between employees and employers are

often resolved in a tribunal. Measuring performance and deciding which measures to use in an incentive contract is a major issue in business organizations. Holmstrom (1979) studied the use of performance measures in incentive contracts and established criteria for improving a second-best contract based on the employee's objective by including additional performance measures. However, Holmstrom's paper and most subsequent research assume that the employee's objective is always a measurable performance measure. This assumption may not hold true in many organizational settings. Many organizations (e.g.

Non-profit houses or authorities bureaus lack a clear aim and therefore require the usage of other public presentation steps to induce undertaking. Some houses lack traded residuary claims, so their aim (total value) cannot be used in incentive contracts. In large publicly traded houses, the total house value may fluctuate drastically, making it almost useless as a public presentation measure for risk-averse employees. Previous research has shown that contact employee performance is crucial for achieving customer satisfaction. However, little has been done to analyze which employee behaviors influence customer satisfaction and which behaviors influence relationship satisfaction. (Dolen, W.)

, et al., (2004) analyze the key dimensions of employee performance in relation to two different types of satisfaction. Performance Management Process is considered one of the most complex and controversial human resource techniques (Roberts 2002: 333). According to DeNisi (1992: 71), performance management has always been and continues to be a crucial part of management. A reliable and valid management system provides employers and employees with valuable information about the employees' strengths and areas for development (Mani 2002: 141). In an ideal scenario, management offers employees specific steps they can take to achieve

success within their organization.

An effective performance management system is a crucial tool for measuring and improving organizational productivity (Mani 2002: 142). However, most management systems are developed by specialized personnel without input from directors or employees. Typically, these systems only focus on past employee performance and do not consider the organization's current or future direction (Cederblom and Pemeral 2002: 132). Nevertheless, assessment systems in organizations often share common goals of providing feedback to employees, recognizing superior performance, and addressing poor performance (Johnson 2000: 3). Accurate feedback on performance is seen as vital for an employee's ability to perform effectively in an organization" (Nathan, Mohrman, and Milliman 1991: 352).

Performance feedback is the means by which assessment influences employee behavior and can fulfill important growth and development needs. However, if employers are unable to provide useful feedback, performance appraisals are less credible. Employee satisfaction with the assessment system is linked to the perception of fairness.

The importance of understanding and evaluating job performance goes beyond simply completing specific tasks. It involves a wide range of organizational activities, as stated by Arvey and Murphy (1998:162).

Purpose of Performance Management System

The use of performance management in employment settings is widespread, according to Kleiman and Durham (1981:103). It is important that everyone involved understands the connection between performance management outcomes and their use, as mentioned by Martin and Bartol (1998:226). The following are the purposes of performance management and criteria that contemporary business organizations can adopt.

Administrative performance management is focused on employment decisions such as promotion, retention, transfer, layoff, and termination. Its purpose is to reward and advance employees who exhibit desired organizational behaviors. To achieve this objective, the performance management system

must establish criteria for selection, classification, and placement processes; provide input in personnel decisions like promotion, job assignment/transfer, and termination; and influence outcomes such as promotion, salary increases, and bonuses (Feldman 1992: 10-11).

Developmental performance management aims to provide feedback to employees, support their training development needs, and clarify role expectations. It serves as a communication channel between employers and employees.

The intent should be constructed so that measuring organisational intercessions such as preparation and end scene are conducted. Formal and informal feedback to subsidiaries, act uponing non merely behaviour but besides feelings of competency and self-efficacy is encouraged. Employees are educated in the norms, values, and aims (Feldman 1992: 10-11).

Incentive
Performance direction implicitly assume that wage is an inducement associated with public presentation. Specifically, when public presentation is high, higher wage additions should be available ; when public presentation is low, small or no wage addition should be provided (Kellough 1999: 663). Harmonizing to Roberts (2002) inducement systems are effectual because they operate to develop, keep, and heighten employees' desired behaviour. Mani (2002: 158) positions, wage as a incentive and an inducement for employees to better productiveness and remain with the organisation. '' An effectual inducement system must provide criteria so that evaluations can be validated and enough support (Mani 2002: 158). Be perceived as distributively just (Gabris and Ihrke 2001:162).

Performance direction involves a systematic effort to direct organisational behaviour toward overall goals (Burstein 1983:184).

Organizations typically use direction for managing employee performance, which is important for employee satisfaction in the management system. Employee perception of fairness and trustworthiness is crucial (Mani 2002: 158). According to Gabris and Ihrke (2001: 158), public organizations need a method for evaluating,

measuring, and scoring individual employees' performance if they intend to reward them based on performance. There are arguments both for and against implementing a performance management system in contemporary Australian business organizations.

Arguments against Implementing Performance Management System

Implementing a performance management system requires a significant capital investment, particularly in terms of fixed costs like installing HRIS throughout the organization (Kaplan, RS, 2001). Additionally, employees lack knowledge about how the system operates, necessitating expensive training from experts in the field.

Benefits of Implementing a Performance Management System

A well-designed performance management system has several advantages for employee development. This system enables managers to identify their team's strengths and help create personalized developmental plans (Derekstockley, 2004). By implementing it effectively, managers can track employee performance and differentiate between those who achieve goals and those who do not. As a result, employees receive valuable feedback to enhance their skills in areas where they are lacking proficiency. The various components of the performance assessment process play a crucial role in the overall assessment system.

The text discusses the components of a performance appraisal system. These components include formal written policies, goal setting, performance planning, employee involvement, documentation of appraisal, rater training, and support from top-level management. It is important for a performance appraisal system to meet the needs of both the organization and employees as many decisions rely on it (Martin and Bartol 1998: 223). Employee participation in system development enhances understanding of job demands and establishes consensus on important aspects of the job and how performance is measured (Roberts and Pavlak 1996: 390).

Shipley Associates uses the formula Performance = Competence + Motivation + Opportunity to analyze the performance of sales assistants (Brennan

JN, 2003). This formula indicates that performance is influenced by competence, motivation, and opportunity.

All of the public presentation beginnings of sales assistants are independent from each other. This means that a sales assistant may be highly motivated, competent, and opportunistic at the same time, or they may not possess these qualities. Shipley Associates evaluates the performance of sales assistants based on the aforementioned factors. According to Brennan JN, competence is assessed by examining their knowledge about products, sales procedures and policies, the company, and the industry as a whole. In addition, motivation is another essential factor in measuring performance, although it is more subjective in nature.

Shipley Associates evaluates the motivation level of sales representatives by assessing their dedication, attitude, and success celebration. They also offer development opportunities to enhance performance.

Performance management equity assessment

An effective performance management system encompasses policies and procedures, managerial support, training, employee goal setting, performance standards, performance monitoring, and performance evaluation. The subsequent sections discuss each category.

Policies and Procedures

Policies and procedures establish the process of evaluating performance, including employee goals and performance standards. These documents also outline the frequency of assessments and designate the responsible party for administering the system.

Lastly, the theoretical model necessitates the explanation of evaluation standards and required certification, as well as the definition of appeal processes. Managerial support can be seen in a public presentation assessment system through the accountability of raters in administering the system. Additionally, managerial support should also involve providing additional compensation/benefits to employees who meet or exceed standards. The assessment model mandates that all employees receive training on the performance assessment process and conduct self-appraisals. Raters must be trained in establishing employee goals and

performance standards. Moreover, rater training should also involve offering continuous performance feedback and involving employees in the steps of the assessment process.

Employee objectives are customized to the specific occupation of each employee. These objectives should be prioritized and established collaboratively by the rater and employee. Additionally, the objectives should always be documented in writing. Performance criteria are utilized to assess the achievement of the established objectives by employees.

Like discussed in the old subdivision, it is important to set public presentation criterions together with the rater and employee, and to document them in writing. In an effective public presentation assessment system, ongoing feedback should be given by raters to employees throughout the assessment period. Additionally, raters should write down their observations of employee performance and encourage employees to do the same.

Measuring Performance

Both the rater and employee are required to complete a written assessment of the employee's performance. They then have a meeting to discuss the evaluations. Raters should always provide specific examples to justify their evaluations.

State forces manual ( 2007 ) defines the public presentation direction system as follows:

• The public presentation director is responsible for overseeing the administration of the public presentation direction system to ensure that it aligns with the organization's strategy.
• The organization must assess its public presentation direction system within a specific time period to determine how effectively the system is meeting its objectives and take necessary steps to improve it, if needed.
• Performance directors must be objective and unbiased when evaluating employees' performance.