Performance Management: Identified Issues and Recommendations Report

This report provides an analysis of performance management within organizations, highlighting key issues and their implications. The main body of the report focuses on two critical problems: the lack of effective evaluation metrics and tools, and the inadequacy of rewards and recognition systems. The report explains how the absence of proper metrics leads to flawed performance measurement and accounting errors, emphasizing the importance of accountants in establishing and incorporating performance standards. Additionally, the report discusses how inadequate rewards and recognition can demotivate employees, impacting their performance and ultimately hindering the company's growth strategies. The report emphasizes the role of management accountants in developing employee-centric strategies and competitive reward systems to ensure business success and employee satisfaction. The report concludes with a reference list of relevant books and journals supporting the analysis.

Performance
management within
organisations

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................3

MAIN BODY
7.0 Analysis and discussion
7.1 Identified issues
Performance management is one of the most important functions which is undertaken by
modern day business firms as it is directly related to the compensation provided to the workforce
and functions as a key variable to measure organizational efficiency. There is also clear relation
which has been identified between both management and financial accounting and performance
management as the latter is incapable of being undertaken and analysed using solely financial
accounting which is why management accounting tools and standards are deployed alongside to
effectively undertake performance management in a company (Chen, Jagota and Kumar, 2021).
There are various problems which have been identified in relation with performance
management which are listed herein.
 Lack of evaluation metric and tools within organization – One of the most important
features of performance management is the fact that the company must use effective
metrics to measure performance and have measures to properly grade performance.
However, undertaking these tasks require the existence of several key metrics which
small and medium level businesses struggle with. This results in an ad hoc approach by
such companies in which performance management is undertaken using surface level
analytics in which the criteria which defines performance as being satisfactory and
exceptional is either flawed or inconsistent. This problem is extremely relevant as the
field of performance management is getting complicated as time goes on and new metrics
are being introduced on a consistent basis which keeps on adding to the organizational
process. The lack of proper metrics also results in flawed performance measurement
which is also very harmful for employees for any organization. The role of accountant is
also very prevalent as far as this issue is concerned as the financial department and
accounting personnel play a key role in establishing and incorporating standards for
measurement of performance along with the metrics which are to be used daily by the
company (Buck and Morrow, 2018). Accountants are often responsible for defining and
incorporating key performance metrics as they are responsible for conducting the process
of management accounting and the lack of proper measurement metrics often results in
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accounting errors and the workforce not getting compensated in accordance with their
performance. Lack of performance management metrics can also lead to errors in the
books of accounts as performance related bonuses and extra pay which is credited to an
employee’s account is also regulate and calculated on the basis of the exhibited
performance which can be disastrous if done in a flawed or inefficient manner. The
accounting industry going forward will need to incorporate properly defined performance
measurement metrics and ways to measures of performance correctly in an economic way
to make it feasible for small and medium firms going forward.
 Inadequate rewards and recognition – One of the most important functions of
performance management is to make sure that the workforce of a company does not feel
that their commitment and extra efforts towards the company are going unrecognized and
in vain. The modern day business environment makes companies tend towards 1000’s of
other smaller hassles and activities apart from their core operations and in the middle of
the hustle, the rewarding and recognizing process of the company often goes unnoticed.
This is a very big problem for firms from all backgrounds and sizes as having an
unmotivated workforce is very harmful for pursuing growth strategies as dejected
employees do not put forth the needed amount of performance which is helpful for the
business at that stage. If a business provides its employees with improper system of
rewards and recognition along with poor appreciation for extra efforts, then the
employees slowly start to not put forth their best which can be a major setback to the
company (Pinto, 2019). The role of an account, especially management accountant is a
very important one in this regard as one of the most important functions of a management
accountant is to undertake complex data and number crunching for making employee
centric decision making and strategies for the business. Due to an improper rewards and
recognition system, many of the accounts can feel dejected to put forth their best efforts
and lack of employee performance can result in formation of poor statistics and journals
by accountants reflecting subpar company performance. This issue can also have a
bearing on the accounting profession as a whole going forward as it will become very
important for management accountants to draft a competitive and market specific reward
and recognition system to ensure that the business grows in the right direction and takes
care of tis important stakeholders such as employees.
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REFERENCES
Books and Journals:
Buck, B. and Morrow, J., 2018. AI, performance management and engagement: keeping your
best their best. Strategic HR Review.
Chen, L., Jagota, V. and Kumar, A., 2021. Research on optimization of scientific research
performance management based on BP neural network. International Journal of System
Assurance Engineering and Management, pp.1-10.
Pinto, J., 2019. Key to effective organizational performance management lies at the intersection
of paradox theory and stakeholder theory. International Journal of Management
Reviews, 21(2), pp.185-208.
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