Elements in the Performance Management, Management by Objective Approach - Coursework Example

PERFORMANCE MANAGEMENT {Insert university’s name} {Insert instructor’s name} {Insert student’s name} April 29th, 2012 PERFORMANCE MANAGEMENT 1. The main key elements in the performance management include planning and expectation setting, monitoring, development and improvement, periodic rating and rewards and compensation. The aforementioned five key elements encourage success as well as nurtures true sense of worth among the employees. Let us examine each of the key elements a little more in detail. 1. Planning and Expectation Setting It is important for the organization to set goals as well as identify how the set goals will be evaluated. The evaluation process should be clear and a timeline set and adhered. This is because a successful performance management needs a clear goal setting (Cascio & Aguinis, 2005). 2. Monitoring It is important to keep record of the employees’ performance as well as enable the employees to do so to. This will enable them to owner their development an aspect which is an essential quality in ensuring effective employee. 3. Development and Improvement After periodic monitoring of the employees using different means, it is important to encourage further improvement s well as development. Effective performance manager will not stop after an employee has met the outline goals but rather encourage a number of ways that will assist to attain greater success (Cascio & Aguinis, 2005). 4. Periodic Rating It is essential to provide some kind of rating or feedback in order for the employees to gauge whether they are on track in attaining the set goals. Some employees are in a position to see their development progress clearer than others while some wait until the last minute to be in a position to do so. This is because they over estimate their capabilities and hence fail to plan ahead an aspect that makes them not to attain the set goals. The mentioned outlines the importance of successful manager providing periodic rating between target evaluation and goal setting. 5. Rewards and Compensation In evaluating performance management success, rewards and compensation are crucial aspects. This is because for an effective employee to continue developing and achieving, they need to feel not only recognized but also appreciated. Therefore, it is important for the management to adopt various rewards and compensations systems to offer the employees when targets are or not met in appreciating their efforts (Cascio & Aguinis, 2005). Importance of well designed performance management system There are a number of benefits of a well designed performance management system not only for the organizations but also for the employees. Performance management is perceived as a strategic tool that is holistic in nature. This is because performance management pervades in every activity of the organization which is not only concerned with management of the team but also of the individual and the organization as a whole. Performance management is essential for the organization due to the fact that it is concerned with creating a culture whereby the team and individuals are in a position to excel by improving in terms of business processes and skills. Consequently, performance management results into improvement of relationship quality among the employees and the management by ensuring that expectations are shared and as a result builds an environment of mutuality and openness. Accordingly, in the recent past, the importance of performance management has been of significance and hence most organizations have emphasized the importance of talent management and employee development. The cotemporary organizations have ensured that they have groomed the employees’ competencies so as to ensure that they have a competitive advantage in the existing market and perform outstandingly. Therefore, organizational performance results into financial gain whereby organizational costs are reduced and there is growth in sales. Additionally the organization is aligned directly to the goals set up by the CEO. Organizational performance is further beneficial to the organization as project overruns are stopped. Finally, in terms of financial gain, the time taken to create operational or strategic changes are decreased as there is communicating the changes via new set of goals (Cascio & Aguinis, 2005). Organizational performance also leads to motivated workforce. This is because, employee engagement is improved an aspect that makes the employees to have a better understanding of how they contribute to high level goals of the organization. Consequently, transparency is created in attaining all the set goals and there is optimization of the incentive plans to certain goals for over achievement, not just the usual business. Finally, organizational performances results into motivated workforce because professional development programs are aligned in a way that they lead to achievement of all business level goals. Finally, organizational performance leads to improved management control. This is because it is responsive and flexible to organizational needs. Additionally, communications particularly of strategic goals are simplified making planning to be easy (Cascio & Aguinis, 2005). 2. Rating Scales Rating scale is one of the performance evaluation methods. Some of the commonly used rating scales are behavioral and graphic rating scale. The behavioral scale relies on the actual behaviors. Rating system has been regarded as both ineffective and effective. Advantages of the rating system Rating systems results into creation of a channel of standardization process. Additionally it is helpful to individuals as it identifies the strategic outlook from the existing scenario associated with performance level. Rating further assist in the management aspects to consider the cons and pros as well as compare other forms of performance evaluation. Any form of rating is usually characterized by a silver lining. Individual esteem is usually raised by performance rating an aspect that can raise the performance bar. Additionally, rating system provides a better way to communicate not only areas of weaknesses but also strength. Many employees and managers are so familiar with them. Disadvantages of the rating system One of the disadvantages of the rating system is that it posses the danger of accuracy. Consequently, the human bonding is not the key aspect. This is because it establishes a work culture and environment that climbing the success ladder is the key aspect. Moreover, employees’ expectations are likely to be hampered due to the fact that rating system can be so different from actual expectations and rating. Lastly there is an assumption that rating system is directly linked to employees’ bonus or raise. The mentioned is likely to result into inflation. There is likelihood of managers developing negative biasness towards the employees (Cascio & Aguinis, 2005). Management by Objective (MBO) Approach This is the commonly used performance evaluation system. The approach focuses on the performance goals that the manager and an individual not only identifies but also agrees with. The approach can be conducted using a four stage process: job review and agreement, performance standards development, objective setting and continuing performance discussion (Bratton& Gold, 2007). Advantages of MBO The approach makes the managers to think and be concerned and as a result plan purposefully for results and not merely for work or activities. Additionally, the approach makes managers to clarify organizational structures and roles. MOB further encourages individuals to be committed to their established goals and as a result they do not depend on instructions and guidelines from the management. The mentioned enable them to include their ideas into planning programs. Consequently, due to the fact that MBO results into effective planning it also assists in putting in place effective controls. Controls entail not only measuring results but also taking action with an aim of correcting deviations from existing plans so as to attain the set goals and MBO helps in attaining this. Set targets assists in attaining MBO, there its objective should be specific, measurable, achievable, relevant and time specific (SMART). Consequently, objectives require monitoring and quantifying an aspect that can only be attained using MBO as an evaluating tool. Lastly, the approach emphasizes and clarifies the objectives and provides suggestions for improvement an aspect that is essential for both the organization and the employees. This is because there is greater commitment from the employees (Cardy & Dobbins, 1994). Disadvantages It takes considerable long time to implement an aspect that can be costly to the organization. Moreover, the approach is associated with excessive paper work as well as challenges in measuring main operations. Employees are likely to be frustrated if the organizations adopt high targets that cannot be attained easily. Moreover, the fact that organizational appraisal sometimes is made in terms of personality traits and not performance, employees can be discriminated against (Bratton& Gold, 2007). 360 Feedback Another performance evaluation strategy is called 360 feedback strategy. This is whereby employees are not only evaluated by customers and subordinates but also with colleagues and other interested parties such as supervisors. Advantages The approach makes employees to be in a position to have clue of how other people perceive their performance in various relationships that are essential to work. It also enables a possibility to make comparison of distinct perspectives in the evaluation process. The approach enables team development as well as improved customer care service n aspect that is beneficial to both employees and organization as a whole. It results into organizational and personal performance development. The employees are at an advantage due to the fact that there is reduced risk of discrimination from the management. It is beneficial for the organization for there is improved feedback emerging from different sources. Lastly it is responsibility for career development (Cascio & Aguinis, 2005). The disadvantages The approach seems to focus on weaknesses and negatives an aspect that is disadvantageous to the organization and employees. There is generation of insufficient information and exceptional expectations for the whole process. Lastly, poor goal alignment, biased evaluators as well as negative employee feeling are disadvantageous to both the organization and employees (Cardy & Dobbins, 1994). Critical Incident Method This is evaluation method that focuses on questionable and outstanding behaviors. This method is based on the company’s manager taking some time to not only observe but also gather data on the behavior of the employees while paying extra attention to critical incidents. At the end of the year all the critical incidents are not down and categorized as either positive/satisfactory behavior. Advantages It is based on direct observation of the employees’ performance. It is time tested as well as providing more face time. This makes the managers to spend more time with the employees an aspect that makes them to provide more guidance, coaching and feedback about organizational development. Disadvantages The approach results into delay in giving of feedback. Additionally, all unsatisfactory and unsatisfactory behaviors are not equal. Even though it is important for managers to get involved by moving around, the approach can cause them to spend more time on the floor. However, if they spend more time doing so, they can feel they are micromanaged (Maloa, 2001). Cardy, R. & Dobbins, G. (1994). Performance appraisal Alternative perspectives. Cincinnati Ohio SouthWestern ;College Publishing Cascio, W.F. & Aguinis, H. (2005). Applied Psychology in Human Resource Management. New Jersey: Pearson Education Inc. Maloa, F. (2001). Employee perception of a performance management system. Unpublished Masters Dissertation. Pretoria University of South Africa. Bratton, J. & Gold, J. (2007). Human Resource Management: Theory and practice. London: Palgrave MacMillan. . Read More