Key Elements in a Performance Management Process - Coursework Example

Performance Management Introduction Performance management is defined as an activity that involves all practices, information, and systems that managers use to establish strategy, develop plans, monitor execution, project performance, report organizational results, and make informed decisions (Axson 2010: 25). It can also be defined as a holistic approach and process towards the effective management of individual groups to ensure that their shared objectives, as well as the organization’s strategic objectives, are attained. The aim of this paper is to discuss this concept in detail, including the key elements in a performance management process, and why a well designed performance management system is important for both employees and organizations. The paper will also discuss four methods used in performance and their pros and cons. Purposes of performance management Generally, the aim of performance management is to contribute to the attainment of high performance by both the organisation and its employees. Sono and Werner (cited by Craythorne, 2006: 121) state that there are three major purposes of performance management, that is: it is a process for implementing strategy; it is vehicle through which culture change can be implemented; and it offers input to other systems such as remuneration and training development. Performance measurement enables judgment of past performance by providing a basis for reward allocation, providing a basis for promotions, layoffs, transfers and so on, identifying high-potential employees, validating selection procedures, and evaluating previous training programs. It also enables development of future performance by fostering work improvement, identifying training and development opportunities, developing ways to overcome obstacles and barriers to performance, and establishing supervisor-employee agreements on expectations (Griffin & Moorehead, 2011: 156). Key elements in a performance management process The key elements in a performance management process are performance planning, performance coaching and mentoring, and performance measurement and evaluation. These are discussed next. Performance planning Performance planning involves setting the direction of the performance planning process and defining expectations, determining the goals and objectives of employees, determining the people to be engaged in the evaluation process as well as the method to be employed, and developing an action plan. The purpose of performance planning is therefore to accomplish two critical tasks: (1) to establish measurable objectives for the outcomes or results that the efforts of the people involved will produce (that is the what of the job); and (2) to analyze the way in which the people involved will go about attaining those results or achieving the desired goals (that is the how of job) (Grote, 1996: 21). These tasks are then taken into consideration by way of having them reflected in an action plan. Performance coaching and mentoring Performance coaching and mentoring encompasses conducting interim checks on progress, exploring causes of bad performance, and providing coaching and mentoring. In mentoring relationships, performance measurement does not exist or is very informal whereas in coaching relationships, performance management is a formal and documented process (MTD Training, 2010: 10). In a coaching relationship, the job requires specific performance goals and the job’s doer is evaluated based on those goals. There is documentation to support the person’s knowledge and understanding of the stated goals and documentation to show how the individual’s supervisor rates his or her performance. The process also involves formal penalties and rewards based on the outcomes of this rating (MTD Training, 2010: 10). In order to be effective, the coaches involved in performance management should possess certain attributes. They should be inspiring – helping each employee to reach his or her true potential; energizing – able to use effective communication to energies others; facilitating – able to do the required task in partnership with employees; performance-oriented – able to reach greater efficiency or effectiveness; learning – able to learn new ways of looking at issues; and development-oriented – willing to help others increase their abilities (MTD Training, 2010: 12). The coach must be in a position to first understand an employee’s level of performance in order to perceive any barriers that are keeping them from achieving their best level of performance. The coach then has to make the poor performance of an employee his or her own responsibility. The coach looks at poor performance as a failure to provide some information. Some of the common reasons for poor performance include lack of the required capabilities due to insufficient mental ability or education or insufficient job knowledge, lack of adequate challenge in the job, poor management, an unsatisfying job, emotional problems and so forth (MTD Training, 2010: 13-14; Dubrin, 2008: 548). Performance measurement and evaluation This stage involves measuring the performance, rating it, providing feedback, and recording and communicating the performance results. Performance evaluations may be used as a foundation for discussions of training, development and improvement. Performance evaluation information forms the basis for providing job performance feedback (Griffin & Moorehead, 2011: 155). Performance evaluation may also be necessary for validating selection devices or appraising the impact of training programs (Griffin, 2007: 32). Significance of a well designed performance management system A well designed performance management system offers an outline of an organization’s human resource weaknesses and strengths. This information in turn helps human resource managers in making decisions regarding which employees to promote, those to be laid off, those who need further training and development, and so on. A well designed performance management system also facilitates succession planning, that is, the planning that an organisation does to ensure that it will have adequate well-trained management staff in future operations (Kleyhans et al. 2006: 144). Methods of performance evaluation, their pros and cons There are many techniques developed for evaluating performance. The HRM department of an organisation or an organization’s higher-level management normally dictate which type of evaluation system to use. Four of the performance evaluation techniques are discussed below. Graphic rating scale The graphic rating scale (GRS) is the simplest most poplar method of evaluating performance. There are two types of GRS systems in use today and they are sometimes both used in evaluating the same person. The first one and which is most commonly uses a list of job criteria (for instance quality of work, quantity of work done and so forth). The second type is more behavioral, and uses specific behaviors that are listed, and the effectiveness of each is rated (Sims, 2002: 88). The GRS system presents evaluators with a list of traits that are regarded pertinent to successful job performance, such as maturity, adaptability, motivation and cooperativeness. Each trait in the list is accompanied by a 5- or 7-point rating scale. The assessor goes down the list and rates each on incremental scales (Sims, 2002: 88). For a scale that uses five points, the attribute will be rated based on the 5 points; for instance a factor such as level of job knowledge may be rated 1 indicating that the employee is poorly informed about his or her work duties, or 5 if the employee has a complete mastery of all phases of the job. Although GRSs do not offer the depth of information that other performance evaluation techniques do, many organizations prefer to use them due to the fact that they are practical and can be developed at relatively lower costs and this is one strong advantage of the GRS system. The second advantage is that HRM can develop evaluation forms quickly, and since the traits and anchors are written at a general level, one form can be used in evaluating more than one job in an organisation. Third, the GRS system is relatively easy to use, and the scores provide a basis for making a decision on whether an employee has improved in certain areas (Sims, 2002: 89). Some of the obvious disadvantages of the GRS technique include the point that separate factors or traits are grouped together, and the evaluator is only allowed to check one box. In addition, some of the descriptive words used in GRS scales may have different meanings to different evaluators (Sims, 2002: 89). For instance, terms like cooperation and initiative are subject to many interpretations, especially when they are used together with words like poor, average and outstanding. Behaviorally anchored rating scales (BARS) Behaviorally anchored rating scales (BARS) are a more detailed and refined version of the conventional rating scale. The execution of BARS starts with a detailed analysis of a job followed by a precise identification of effective and unproductive job behaviors. Once each job factor has been classified, descriptive statements for each level are assigned for every job factor. Each factor’s set of descriptive statements is then arranged using a ranking method. Typically, the scale offers seven descriptive statements for each performance attribute. An example is a case where an employee’s performance is rated as “very poor” (1) if the employee is indifferent to customers’ needs, or “clearly outstanding” (7) if the employee gives an explanation of company services to customers and tries to cross-sell services whenever possible (Caruth, Caruth & Pane, 2008: 238-239). There are several advantages of BARS. First, it is job-based since each job must be carefully studied to identify particular behaviors that will be used to evaluate performance. Second, it is more objective than other techniques since it uses behavioral statements rather than vague descriptions of performance. Third, its validity is superior to techniques that depend on personality factors or traits; and fourth, it offers an easier communication of job expectations to employees since these expectations are specifically highlighted in advance (Caruth, Caruth & Pane, 2008: 238-239). The demerits on BARS include: (1) the system is expensive and time-consuming to develop since each job must be analyzed in detail; (2) its development normally requires professionals because of the extensive detail; (3) there is normally little or no backup information to support the assessor’s assessment; and (4) problems of evaluator prejudice are not eliminated since judgment plays a key role in the evaluation (Caruth, Caruth & Pane, 2008: 240). Essay method Using the essay evaluation method simply involves writing a narrative that describes an employee’s weaknesses, strengths, potential, past performance, and suggestions for improvement (Sims, 2002: 91). Assessors can ask questions such as “What are the major strengths of employee XYZ?” and “What capabilities need to be improved to enhance this employee’s productivity?” – to which they can get answers by assessing the employee. The advantages of the essay method include: (1) the focus an assessor must give to writing a report that truly reflects an employee’s position; (2) the wide leeway accorded to the evaluator to cover items that may not be included in a set of identified evaluation factors; (3) the focus on citing particular examples of demonstrated performance so as to come up with an accurate essay; and (4) the kind of details provided to employee that may assist the individual to improve his or her performance (Caruth, Caruth & Pane, 2008: 242). Disadvantages of essays include: (1) the quality of the evaluation can be regarded a function of the evaluator’s ability to write well rather than of the employee’s capacity to perform a job well; (2) the method can be time-consuming if given the attention it requires: (3) appraisers may be inclined to perform them as a formal process if many employees are being evaluated at once; and (4) the evaluator tends to pay attention to behavioral extremes rather than examples of day-to-day performance (Caruth, Caruth & Pane, 2008: 242). Critical incidents method This method focuses the assessor’s attention on those behaviors that are critical to making the difference between performing a job well and doing it badly. That is, the evaluator notes down anecdotes that explain what the employee did that was particularly ineffective or effective. The main point here is that only explicit behaviors, not vaguely defined personality traits, are highlighted. A good example is by administering a questionnaire, where each member in a group of job experts is required to write as many critical incidents as he or she can (Gatewood, Field & Barrick, 2010: 267). The key advantage of using the critical incidents technique is that it leads to a great deal of remarkable, specific, job-related information. The information that is assembled is behavioral in nature, not based on traits. The described behaviors are the critical incidents; hence the information most likely represents significant aspects of the job. In contrast, it is not clear whether the reported incidents represent the full scope of the job, meaning that dimensions based on these critical incidents may not actually reflect the details of the entire job (Gatewood, Field & Barrick, 2010: 268). Conclusion In conclusion, performance management can be defined as a holistic strategy and process of managing individual groups to ensure that their shared goals, and the organization’s strategic goals, are attained. The performance management process involves performance planning, performance coaching and mentoring and performance measurement and evaluation. A well designed performance management system is expected to provide an outline of an organization’s human resource strengths and weaknesses. Several methods are used in evaluating performance, four of which have been discussed in this paper: the GRS method, the BARS method, the essay method, and the critical incidents method. The advantages and disadvantages of these methods have also been discussed. References Axson, D. A. J. (2010). Best practices in planning and performance management: Radically rethinking management for a volatile world (3rd ed.). New York: John Wiley & Sons. Caruth, D. L., Caruth, G. D., Pane, S. S. 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R. (2002). Managing organizational behavior. Westport: Greenwood Publishing Group. Read More