PERFORMANCE MANAGEMANT IN ORGANIZATIONS

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What is performance

Performance is the Behaviour that accomplishes results (Brumbach 1988, cited in Armstrong 2014, p.334).

Performance Management (PM)

PM is the function of aligning the performance of the individuals and teams towards the organization’s strategic goals. This is a continuous process which identify, measure and develop their performance (Aguinis,2013).

Underpinning Theories

Goal Theory -  supports the emphasis in PM on setting and agreeing objectives against which performance can be measured and managed (Latham and Locke 1979, cited in Armstrong 2014, p.335).

Control Theory – priority is given on feedback, aligning the behaviour of employees towards the organizational goals. Through feedback, discrepancies are identified and corrective measures are taken to rectify same (Armstrong, 2017).

Social Cognitive Theory - Social cognitive theory was developed by Bandura (1986).  Developing and improving positive self-confidence in employees has been identified as an important PM objective.

 

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Principals of Performance Management 

The following are the principals stated by Armstrong (2017),

·        PM should have clear organizational goals which is aligned with measurable success criteria.

·        Be simple and focus on performance improvement with clarity of roles. Further it should be designed and implemented with the involvement of employees.

·        Be aligned with learning and development initiatives and regularly assessed themselves against success criteria.

·        Be transparent and equitable and explain the rationale which links them to rewards.

Success story of Implementing the Performance Management System

Merrill Lynch is one of the world’s leading financial management and advisory company, with offices in 36 countries and private client assets of approximately UD$1.1 trillion. The company has implemented a PM system where managers and employees have regular conversations and feedback is exchanged. Coaching is given if needed. Frequent reviews of the goals are met overcoming the deviations. Further they have developed a website which contains all information about the aspects of PM for the reference of managers. The new PM system clearly defines the organization’s expectation from the employees, their development path in career and how they will be judged relative to compensation (Aguinis, 2013).

At Toyota Motor’s Lexington, Kentucky, Camry plant, teams of employees monitor their own results, individual daily performance metrics is updated. With regular meetings, they continuously align those results with the work team’s standards and with the plant’s overall quality and productivity needs. Team members who need coaching and training receive it, and procedures that need changing are changed (Dessler, 2013).

References

Armstrong, M., 2017. Armstrong's Hand of Human Resource Management Practice. 13th ed. Philadelphia: Kogan Page.

Aguinis, H., 2013. Performance Management. 3rd ed. USA: Pearson Education, Inc.

Bandura, A.,1977. Social Learning Theory. Englewood Cliffs, NJ, Prentice-Hall

Dessler, G., 2013. Human Resource Management.13th ed. USA: Prentice Hall.