Performance Management in Organizations

This presentation provides an overview of performance management in organizations. It covers the objectives, framework, tools, and techniques of performance management. It also discusses the positives and negatives in approaches to performance management, as well as the strengths and weaknesses of cohesive versus non-cohesive teams. Additionally, it explores performance management from a control theory perspective and the balanced scorecard approach.

HI6005: MANAGEMENT AND ORGANIZATIONS IN A GLOBAL ENVIRONMENT
Prepared by:

CONTENTS
Introduction
What is Performance Management?
Objectives of Performance Management
Performance Management: Prerequisites
Framework of Performance Management System
Positives and negatives in the approaches to performance management
Performance Management System tools and techniques
Strengths and weaknesses of cohesive versus non-cohesive teams
Performance Management from a Control Theory Perspective
The Balanced Scorecard Approach
Conclusion
References

INTRODUCTION
•Organizations are increasingly dependent on management and decision makings
that are based on facts.
•PMS is designed to provide users with crucial information related to performance
•PMS usually comprises of performance appraisal and employee development
widely perceived as the Achilles’ heel of human resource management.
•With employees and managers deploring their inadequacies repeatedly, in many
organizations performance management system suffers from flaws.
•This report study intends of making discussions about the performance
management in order to identify the relevant School of Management Theory
besides the positives and negatives in its approaches.

WHAT IS PERFORMANCE MANAGEMENT?
•Performance management is an organizational approach that is continuous and systematic.
•It is used to improve results with the help of decision makings based on evidences, continual
learning and focus on performance liability.
•It uses evidences from measurement support administrative planning, funding, and operations.
(Deepa, 2012)

OBJECTIVES OF PERFORMANCE MANAGEMENT
•Researchers emphasise that PM aims the development of employees.
• It is done with requisite dedication and proficiencies to work towards the
shared meaningful objectives in an organizational framework.
•The framework for has been created by considering objective to improve the
performances of both individuals and organizations.
•Its purpose is to cultivate an organizational culture of high performance for
employees---- both as individuals and in teams.
•Raising individuals competency through skills upgradation is also aimed by
performance management.
• PM focuses on to enable clarity of goal with intent to make people in getting
done the right things at the right time.
(Kuhil and W/Michael 2019)

PERFORMANCE MANAGEMENT: PREREQUISITES
•PMS designed and implemented precisely result into increased productivity,
improved communications both employees and organization.
•Organizations should complete certain tasks ahead of designing and implementing
a PMS .
•PMS is designed in-line with the strategic objectives of organizations through
translation of their goals into branch/unit/team/individual goals.
•Organizations should have result-oriented job descriptions and clear reporting lines
and relationships before placing a PMS.
•Developing an appraisal system reflecting the performance of employees
accurately is difficult .
•They should be designed and administered in a customizing way.
(Ukko, et al., 2017)

FRAMEWORK OF PERFORMANCE MANAGEMENT SYSTEM
•While designing a PMS competency model or the corporate values should
be considered.
•Second step is to transferring the goals into measures for the employees.
•Defining the rating sources is the third step
•Development of well-crafted templates to measure the performances is
the fourth step,
•Defining the utilization of the ratings in the evaluation is the final step.
(Flumerfelt, Calvo-Amodio and Porter 2017)

POSITIVES AND NEGATIVES IN THE APPROACHES TO
PERFORMANCE MANAGEMENT
Positives
1. Conversations based on performance
2. Targeted employee development
3. Employee encouragement
Negatives
1. Time taking
2. Inconsistent Message:
3. Biases
(Almeida and Azevedo 2016)

PERFORMANCE MANAGEMENT SYSTEM TOOLS AND TECHNIQUES
•Management by objectives (MBO)
•Review and Agree
•360-degree Feedback

STRENGTHS AND WEAKNESSES OF COHESIVE VERSUS NON-COHESIVE TEAMS
Weakness of a cohesive team is that productivity largely depends on the
performance objectives that have been agreed
Strengths lies in higher productivity and higher norms thus, achieving highest results.
Weakness of a non-cohesive teams hides in the possibility of rise in conflicts of
interests, lack of collaboration and mutual trusts, unrealistic or inadequate goals,
imprudent competitiveness with others outside the group, detachment from other
groups and individuals further negatively impacting the team’s productivity and that of
the organizations.
No such strengths of non-cohesive teams.
(Hussain, et al., 2016)

PERFORMANCE MANAGEMENT FROM A CONTROL THEORY PERSPECTIVE
•Focus of control theory is on implementing control across all departmental
levels of organizations
•Controls such as organizational structure, behavioural controls and
performance measurement for gaining desirable outcomes, consistent with
their objectives and goals can be used.
•Control theory helps performance management to evaluate the system’s
outcomes to determine its persistency with predefined parameters.
(Sageder and Feldbauer-Durstmüller 2018)

THE BALANCED SCORECARD APPROACH
•Private sectors while measuring their performances focus on the financial
measures of their bottom line, ROI, market share, and per-share earnings.
•Federal agencies focus on the internal or process performance, considering
factors like number of full-time equivalents allocated, programs controlled, or
budget size for the financial year.
(Kopia, et al., 2017)

CONCLUSION
•A critical role is played by an effective performance
management system of organizations in the long-term
success of their businesses.
•PM contributes in aligning the employees, resources, and
systems for meeting the organizations strategic objectives.
•Its implementation helps organizations to identify early
warning signals of possible problems.

REFERENCES
Almeida, A. and Azevedo, A. (2016). A multi-perspective performance approach for complex manufacturing environments. Journal of
Innovation Management, 4(2), 125-155. Available: https://search.proquest.com/docview/1957793318?accountid=30552
Flumerfelt, S., Calvo-Amodio, J. and Porter, J. D. (2017). Tapping the potential of sense making for performance
management. Measuring Business Excellence, 21(3), 214-224. Available:
https://search.proquest.com/docview/1935421320?accountid=30552
Hussain, G., Wan Ismail, W. K., Rashid, M. A. and Nisar, F. (2016). Substitutes for leadership: Alternative perspectives. Management
Research Review, 39(5), 546-568. Available: https://search.proquest.com/docview/1826443654?accountid=30552
Kopia, J., Kompalla, A., Buchmüller, M. and Heinemann, B. (2017). PERFORMANCE MEASUREMENT OF MANAGEMENT
SYSTEM STANDARDS USING THE BALANCED SCORECARD. Amfiteatru Economic, 19(11), 981-1002. Available:
https://search.proquest.com/docview/1980072285?accountid=30552
Kuhil, A. M., PhD. and W/Michael, T., MA. (2019). Employee performance management system practices and challenges: A case of
commercial bank of Ethiopia. Indian Journal of Commerce and Management Studies, 10(1), 23-33. Available:
http://dx.doi.org/10.18843/ijcms/v10i1/03
Sageder, M. and Feldbauer-Durstmüller, B. (2018). Management control in multinational companies: A systematic literature
review. Review of Managerial Science,, 1-44. Available: http://dx.doi.org/10.1007/s11846-018-0276-1
Ukko, J., Hildén, S., Saunila, M. and Tikkamäki, K. (2017). Comprehensive performance measurement and management –
innovativeness and performance through reflective practice. Journal of Accounting & Organizational Change, 13(3), 425-448.
Available: http://dx.doi.org/10.1108/JAOC-09-2015-0070