Problems of Performance Management - Essay Example

In view of this information, the Systems Model of Performance Management is adapted. The paper is concluded with a discussion and recommendations for future research. By definition, Performance Management generally includes performance planning, i.e. goal setting, ongoing coaching and development of subordinates, formally reviewing performance and rewarding performance. It was first introduced by Michael Beer as an innovative appraisal and development system that combines the developmental facet of performance appraisal with the goal-setting facet of MBO (Beer & Ruh, 2000; Beer, Ruh, Dawson, McCaa & Kavanagh, 2001).

At the time, it was considered an improvement on the performance appraisal system, which was generally considered as subjective and plagued by rather problems. In considering the value that could potentially be added by Performance Management, it is important to bear in mind that Performance Management as a process was developed because of the failure of performance appraisals. In essence, Performance Management represents a move from an isolated, mechanistic, HR-driven approach to performance appraisal towards a comprehensive, integrated business-driven system aiming at organisational and people development.

(Cawley et al. 2003) It was believed that by participative setting goals that are aligned with higher organisational goals, conducting performance reviews and coaching on an ongoing basis, and rewarding an individual's performance based on the outputs of the Performance Management system, desirable outcomes would follow. While conducting a survey among Performance Management facilitators from major British organisations on potential problems experienced with Performance Management in the early 1990s, a wide range of problems was identified.

In fact, so many problems emerged that in collaboration with these Performance Management experts a Systems Model of Performance Management was developed. The reasoning was that a systems approach would be required to address the wide variety of problems at different levels. The Systems Model is described elsewhere in detail (Spangenberg, 2003b). The Systems Model comprises inputs, processes, outputs and linkages to other systems. The effectiveness of Performance Management is greatly influenced by inputs into the system.

(McDonald 2000)Strategic drivers comprise, firstly, the purpose or purposes of Performance Management. The desired purpose, or purposes, should be determined beforehand, should not contain contradictory elements, and should be clearly communicated to all. Secondly, the transformational framework comprising leadership, corporate strategy and culture is critical to changing the strategic direction of the organisation in order to exploit opportunities in the environment. (Neely 2002)A fair degree of sophistication is expected from all internal stakeholders, namely management, supervision and employees, to understand and apply the principles and procedures of Performance Management.

A productive working relationship with unions or other employee representatives is essential.Because of the often-negative impact of discussing rewards during the final performance review, the reward issue may be separated from the annual review. In the Systems Model, it is considered as a linkage to the