Performance Management System Outcomes and Links to Other Management Functions - Coursework Example

Table of Contents Table of Contents 1 Introduction 2 PMS Outcomes and Links to other Management Functions 2 Approaches to Performance Appraisal 3 Rating Scales 3 360-Degree Feedback 5 Management by Objectives (MBO) 6 Training and Support for Managers 7 Conclusion 8 Bibliography 9 Introduction A competitive business needs to be able to ensure the attraction, development and retention of productive employees (Dowling & Welch, 2008). Performance management involves setting of joint goals, continuous review of progress, communication, coaching and feedback aimed at improved performance and employee development. A Performance Management System (PMS) consists of employee development and performance appraisal where there is the creation of job descriptions, performance indicators and standards, identification of training and development needs, evaluation of employees and establishment of effective reward systems (Mitchell, 2007). This report explains the various issues and options regarding the adoption of a PMS. PMS Outcomes and Links to other Management Functions A PMS leads to the clarification of expectations and responsibilities of everyone in the organization. In addition, it will enhance productivity at the individual and group levels. It will ensure the maximum development of employees through facilitating effective coaching and feedback measures. The PMS will provide a basis upon which effective decisions relating to human capital for instance pay structures can be made (Seiden & Sowa, 2011). For the PMS to be effective, all line managers need to have the skills, tools and understanding to manage their employees’ performance effectively. According to Mitchell (2007), this is because it is no longer simply a tool for determining pay objectives, but rather extends to organizational issues such as management style, talent management and facilitation of change. A PMS therefore requires the cooperation of managers in all departments as they are in charge of the activities within their areas. In case they consider performance management to be valuable in ensuring better management of their staff and achievement of objectives and targets, there is a greater likelihood of them being positive. There is currently a movement away from past performance management in which development-led structures were totally distinct from pay-led ones. There is also a blurring of the differences between usual HR functions such as training and development, rewards, recruitment and selection and performance management, and line managers recognize the need for an integrated way of handling performance. The crafters of PMSs are also increasingly aware of its role, leading to its alignment with the strategic goals of non-Human Resource departments such as sales and marketing, finance, administration and operations management (Foot & Hook, 2008). Approaches to Performance Appraisal Rating Scales Here, the management will come up with a performance grading system. Its scale is applied in the evaluation of the employee’s performance within various aspects for instance technical skills, communication and teamwork. There is the setting of a minimum score which employees have to meet if the appraisal is to be said to be successful. Whoever does not attain the score will be referred to a Performance Improvement Plan (Paladino, 2006). According to Armstrong & Baron (2005), rating scales are advantageous as they are standardized and structured. Ratings can therefore be compared and contrasted easily even across the entire organization. Every employee also undergoes the same rating and appraisal criteria and the same range of respondent feedback being provided. This leads to the enhancement of equal treatment among all the appraises, while also imposing standard measures that can be applied across the organization. Lastly, the basic idea behind a rating scale is obviously sensible, as both the managers and employees for instance intuitively appreciate the efficient and simple logic behind a bipolar scale. Because of this, there is the likelihood of widespread popularity and acceptance hence effectiveness. The approach however has disadvantages, one of which relates to trait relevance. Paladino (2006) explains that within a fixed and standardized system, some traits will tend to be more relevant for some jobs as compared to others and it might therefore appear that a person lacks a certain trait while in reality his job offers fewer opportunities for displaying the traits. Rating scales also tend to have systemic disadvantage as they try to cover all employee performance aspects. It is assumed that all the true performance indicators are included, yet this assumption is not provable as an individual’s performance might rely on factors beyond them. A subject might therefore end up having a rating which is not a true reflection of his value. Rating scales are exposed to perceptual errors. An appraiser might for instance not share an opinion regarding the meanings of the language and selected traits applied. There might also be rating errors which arise from the appraiser’s motive and judgment, and might therefore be deliberate, for instance central tendency in which a busy appraiser is tempted to record many neutral and passive ratings such as ‘adequate’ or ‘satisfactory’ to a subordinate regardless of their actual performance (Foot & Hook, 2008). 360-Degree Feedback In this case, the manager will interview employees and their peers. According to Liviu et al. (2009), he or she will gauge each employee’s set of technical skills, job performance and acquire a deep feedback regarding the employees’ behavior. Through measurement of subjectivity areas such as leadership skills and character, the employer is able to manage worker development much better. The approach is advantageous as the company can use it to monitor existing weaknesses amongst employees across the organization then come up with training programs to address shared weakness areas either across the organization or within certain departments (Seiden & Sowa, 2011). It is the best in ensuring individual growth as it will help workers see if there are any consistencies in the ways in which different managers view them. In addition, some employees might feel bothered when they think that they have been critiqued unfairly by managers who do not have much regular direct contact with and getting direct feedback from customers and colleagues generally helps employees to accept the information’s reality (Liviu et al., 2009). There are however weaknesses such as dishonest feedback, where respondents are not comfortable enough to give honest feedback especially in employee-to-employee evaluations due to possible colleague or supervisor retaliation (Mitchell, 2007). There might also be a lack of consistent interpretation as different employees have different forms of interactions with the persons being reviewed. While it is possible to get information on the perceptions of employees, it remains difficult to have a consistent interpretation of negative or positive behaviors (Liviu et al., 2009). Management by Objectives (MBO) In MBO, employees and managers are supposed to agree on achievable and specific objectives that they are to attain within a given time period. Once they have set the goal, the manager has the responsibility of directing his efforts towards attaining the objective. In this manner, failure or success is defined (Armstrong & Baron, 2005). MBO has the advantage that within it, the clarification of objectives is emphasized while suggestions that lead to improvement are sourced from every possible level of management. In addition, every manager is provided with a clear idea on the standards and crucial aspects of their work (Paladino, 2006). Under MBO, it will be possible to assess staff improvement needs and therefore highlight weakness areas. The high level of participation further improves communication and morale and because managers have to engage in planning so as to achieve results, profitability and growth for the company is facilitated (Dowling & Welch, 2008). MBO has the limitations that its start up consumes a lot of time, it has a lot of paperwork and usually faces challenges in the measurement of key operations. Further, the achievement of objectives in the process might occur at the expense of some organizational goals for instance a cost. In case company targets are too high, there is the possibility of employees becoming frustrated and demoralized (Mitchell, 2007). Implementers might also be ineffective and a number of employees might not be willing to take responsibility, with any goals that are imposed on them leading to the creation of ill-feeling and in case those giving the appraisals happen not have adequate motivation, they might end up handling it mechanically (Seiden & Sowa, 2011). A 360 Degree Feedback process is the most recommended for this case. This is because it is more extensive and comprehensive. It will involve the collection of anonymous and confidential feedback gathered from between eight and twelve people regarding a wide range of competency areas. Its extensiveness will enable the understanding of weaknesses and strengths, and its utility applies to both managers and non-managers in equal measure. Its weaknesses are also less significant and can be controlled greatly by checking on the development of the tools used. Training and Support for Managers Managers need to be motivated and enabled to effectively use the PMS. This can best be done through training. The format adopted will depend on how experienced managers are in performance management and the resources that the organization will be ready to commit (Armstrong & Baron, 2005). According to Foot & Hook (2008), classroom training will be best where the training content needs interactive discussions or hands-on practice. The managers’ efforts can be supported through the use of performance management checklists. For instance, this can show the key responsibilities of the manager and the times when his assigned activities need to be completed. The company can also have a performance management hotline through which everyone can call and inquire on the process (Foot & Hook, 2008). On its part, web-based training can help because it is capable of allowing the participants to accomplish programs at their chosen speed. The application of advanced kinds of Web-based will further offer practice exercises. The only major shortcoming of this approach is that it is easy for it to be ignored by both employees and managers, with a lot of policing being needed in order to facilitate participation (Dowling & Welch, 2008). Conclusion Performance management is a proactive system through which individual employees’ performance is influenced towards desired results. A PMS therefore seeks to achieve an alignment between the individual and organizational goals towards performance excellence. The value of a PMS at this point in time is great in the business’ attempt to seek competitiveness. PMS tools and processes which are administered and developed well will enable the creation of a user-friendly and attractive system to all managers and employees. In this way, both the employees and managers will use PMS in a way which will bring about tangible value-added benefits in feedback, performance development and result achievement. Bibliography Armstrong, M and Baron, A, 2005, Managing Performance: Performance Management in Action, Chartered Institute of Personnel and Development: London Dowling, P and Welch, D, 2008, International Human Resource Management: Managing People in a Multinational Context, Thomson/South-Western: Mason Foot, M and Hook, C, 2008, Introducing Human Resource Management, Prentice Hall: New York Liviu, I, Emil, C and Delia, B, 2009, The Use of 360-degree Feedback Method, Economic Science Series, Vol. 18: 4 Mitchell, D, 2007, Performance Management, Kogan Page: London Paladino, B, 2006, Five Key Principles of Corporate Performance Management, John Wiley & Sons: Hoboken Seiden, S and Sowa, J, 2011, Performance Management and Appraisal in Human Service Organizations: Management and Staff Perspectives, Public Personnel Management, Vol. 40 (3): 251-64 Read More