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The Use Of Performance Management In Hr Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 2315 words Published: 1st Jan 2015

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Performance management is a topic that cuts across traditional HRM boundaries, as it also has implications for employee development. Performance Management is seen as a dimension of employee resourcing and performance monitoring and review as part of the appraisal process. In many organisations, formal, systematic procedures are introduced to regularly assess employee performance, usually involving, at a minimum, an interview between a manager and an employee, with documentation of recorded performance.

One major reform being undertaken in the public service is the development of a performance management system. Its primary aim is to improve performance by focusing on key areas of activity of the Ministry/department, teams and individuals through on agreed framework of planned goals, objectives and standards.


Noe et al. (2008) define performance management as “the process trough which managers ensure that employees’ activities and outputs are congruent with the organisation’s goals”.

(This definition emphasises the need for performance management to be aligned to the strategy of the organisation).

Performance management can be defined as a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors (Armstrong and Baron, 1998).


Bates & Holton (1995) pointed that “performance is a multi-dimensional construct, the measurement of which varies depending on a variety of factors.”

They also state that it is important to determine whether the measurement objective is to assess performance outcomes or behaviour.

Kane (1996) argues that performance is something that the person leaves behind and that exists apart from the purpose.

Bernadin et al. (1995) are concerned that “performance should be defined as the outcomes of work because they provide the strongest linkage to the strategic goals of the organisation, customer satisfaction and economic contributions.”

The Oxford dictionary defines performance as “the accomplishment, execution, carrying out, working out of anything ordered or undertaken.”

Performance is about doing the work as well as about the results achieved. Performance can therefore be regarded as behaviour – the way in which organisations, teams and individuals, get the work done.

Campbell (1990) believes that: “Performance is behaviour and should be distinguished from the outcomes because they can be contaminated by system factors.”

For Brumbach (1988), performance means both behaviours and results. Behaviours emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviours are also outcomes in their own right – the product of mental and physical effort applied to tasks – and can be judged apart from results.

From this definition, we can conclude that when managing the performance of teams, and individuals, both inputs (behaviour) and outputs (results) need to be considered. This is the so-called mixed model (Martle, 1995) of performance management which covers competency levels and achievements as well as objective setting and review.


What, in your opinion, is the difference between Performance Appraisal and Performance Management?

Noe et al (2008) emphasises that Performance Appraisal is only a component of Performance Management as it involves the administrative and relatively isolated duty of measuring aspects of an employee’s performance. Performance Management is a broader concept than Performance Appraisal in that it provides not only for the measurement of performance, but the defining of performance according to organisational goals as well as the provision of performance feedback.

Performance Appraisal (Performance Measurement

Specification of Performance Criteria

Performance Feedback

Performance Management (Noe et al, 2008)


Feedback is a method of communication, usually face-to-face with another person where the desired outcome is normally:

Improved work performance.

A maintenance of performance.

A change of behaviour.

To make another person aware of one’s behaviour upon others.

Performance Management is strategic in the sense that it is concerned with the broader issues facing the business if it is to function effectively in its environment, and with the general direction in which it intends to go to achieve longer terms goals.

It is integrated in four senses:

Vertical integration – linking or aligning business, team and individual objectives.

Functional integration – linking functional strategies in different parts of the business.

HR integration – linking different aspects of HRM, specially organisational development

HR development and reward.

The integration of individual needs with those of the organisation, as far as this is possible.

Activity 1

(i) Differentiate between Performance Appraisal and Performance Management as you see it in the local context.

(ii) Discuss the importance of feedback in the management of performance.


“Performance Management is a means of getting better results from the organisation, teams and individuals by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements. It is a process for establishing shared understanding about what is to be achieved, and an approach to managing and developing people in a way that increases the probability that it will be achieved in the short and long term. It is owned and driven by line management (Armstrong, 2001)”.

Activity 2

(i) Based on your experience of performance management within the organisation in which

you work, what do you think is the purpose of Performance Management?

Performance Management has three essential purposes:

Strategic purpose.

Administrative purpose.

Developmental purpose.

Strategic purpose

A Performance Management system serves to link employee performance to the overall organisational strategy and organisational objectives.

However, research has shown that very few organisations utilise Performance Management in a manner which supports the strategy of the organisation.

The strategic purpose may be achieved through designing evaluation mechanism which define employee performance in terms of organisation’s strategy and goals.

Achievement of the organisation’s objectives.

Increased productivity.

Increased profit.

Motivation of employees.

Administrative purpose

Performance Management systems provide information which assists organisations with administrative decisions relating to issues such as salary administration (pay rises), lay-offs and promotion (Noe et al, 2008: 348).

Pay related pay (increment, bonus).

Developmental purpose

Performance Management systems provide information about employee strengths and weaknesses and in so doing, identify employee development needs (Noe et al, 2008: 348).

Identify Training Needs

Activity 3

(i) Discuss the purposes of performance management in your organisation.


Hereunder are the approaches to Performance Management:

The comparative approach.

The attribute approach.

The behavioural approach.

The results approach.

The quality approach.

The multi-rated approach.

Note: The different approaches to Performance Management have their own strengths and weaknesses.

7.8.1 The Comparative Approach

The comparative approach measures an individual’s performance by comparing his/her performance to the performance of others.

Three techniques adopt the comparative approach:

Ranking : Supervisor ranking his subordinates from best performer to worst performer.

Forced Distribution : Where employees are ranked in groups.

3) Paired Comparison : Where the supervisor compares “every employee with every other employee in the work group, giving an employee a score of 1 every time he/she is considered to be the higher performer”.

Activity 4

(i) Discuss the comparative approach to Performance Management in your organisational context.

7.8.2 The Attribute Approach

This approach focuses on the identification of employee attributes (knowledge, skills, attitude and experience) necessary for the organisation’s success. The employee is measured against these attributes.

This approach includes techniques such as:

Graphic Rating Scales : Where the supervisor rates the subordinate on particular traits and characteristics.

Mixed Standard Scales : Where the supervisor rates the subordinate against relevant performance dimensions.

Activity 5

(i) Describe the attribute approach to the Management of performance in your organisation.

7.8.3 The Behavioural Approach

The behavioural approach defines behaviours necessary for effective performance in a particular job. In assessing performance, managers identify the extent to which a subordinate has exhibited the required behaviours.

Example: (i) Behavioural Observation Scale.

(ii) Assessment Centres.

7.8.4 The Results Approach

This approach is based on the belief that results are the one best indicator of how a subordinate’s performance has contributed to organisational success.

Results-based techniques include:

Management by Objective (MBO) where goal setting is cascaded down throughout the organisation and the goals become the standard against which an employee’s performance is measured.

Productivity Measurement and Evaluation System (PROMES) which involves a process of motivating employees to higher productivity.

Balanced Score cards which may be used to manage the performance of individual employees, teams, business units as well as the organisation itself. The appraisal considers four related categories:





The balanced score card enables managers to translate organisational goals into business unit, team and individual employee goals for each of the above categories.

7.8.5 The Quality Approach

The focus of the quality approach is on improving customer satisfaction through a customer orientation and the prevention of errors.

The design of a quality-based performance management system should focus on:

The assessment of employee and system factors.

The relationship between managers and employees in solving performance problems.

Internal and external customers in setting standards and measuring performance.

Using a number of sources to evaluate employee and system factors.

Activity 6

(i) Enumerate the essential issues of quality based performance management system in relation to an organisation of your choice.

7.8.6 The Multi-Rated Approach

Many organisations adopt a 360-degree feedback approach to performance measurement where information on an employee’s performance is not only provided by the employee’s immediate supervisor, but by those people whom he/she deals with on a day-to-day basis (eg. customers, co-workers, subordinates, suppliers, contractors, consultants). (Snell & Bohlander, 2007: 343).

This approach allows employees to receive an accurate view of their performance as “different people see different things”. (Snell & Bohlander, 2007: 343). This approach usually involves the administration of a questionnaire to a number of people with whom the employee interacts, in which they indicate how well the employee performs in a number of behavioural areas. (Noe et al, 2008: 497). Strengths of the 360-degree Feedback Approach

As the employee is appraised from multiple perspectives, the approach is more comprehensive than other approaches.

The information produced is of good quality.

There is an emphasis on internal and external customers as well as the team.

Bias and prejudice is lessened as the appraisal is not dependent on one person’s view alone.

Feedback from people other than the manager contributes considerably to an employee’s development. Weaknesses of the 360-degree Feedback Approach

It is a complex system in that numerous appraisals need to be combined.

It can be intimidating, resulting in resentment on the part of the employee being appraised.

Appraisals from different individuals may be different and confusing.

Considerable training is required to ensure that the system works as it should.

Employees could undermine the reliability of the approach through colluding in terms of the appraisal which they are to give each other.



In this Unit, the definition and meaning of Performance Management has been explained. The purpose of performance management has been enumerated. The approaches to performance management have been discussed in details.


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