Performance Management System Analysis and Recommendations

This report delves into the intricacies of performance management systems within an organization. It begins by defining the system and highlighting its importance in aligning individual and departmental goals with overall organizational objectives. The report identifies rater errors, such as halo effect and central tendency errors, that can negatively impact employee performance evaluations. It then provides recommendations, including rater training programs, to mitigate these errors and ensure accurate performance assessments. The report also overviews key aspects of a performance management system, including communication, automation, pilot testing, employee training, and continuous improvement. Ultimately, the report emphasizes the effectiveness of a well-structured performance management system in driving organizational success by fostering employee development and achieving strategic goals.

Running head: PERFORMANCE MANAGEMENT SYSTEM
Managing organizational performance
Name of the Student
Name of the University
Author’s Note

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PERFORMANCE MANAGEMENT SYSTEM
Table of Contents
Introduction.............................................................................................................................................................2
Discussion...............................................................................................................................................................2
Importance of performance management system................................................................................................2
Critical evaluation of reason of occurrence of rater errors..................................................................................3
Recommendations...............................................................................................................................................4
Overview of performance management system..................................................................................................4
Conclusion...............................................................................................................................................................5
References...............................................................................................................................................................6

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Introduction
Performance management system demonstrates as a process for confirming a number of rules or policies
which drives to meet the organizational goal successfully (Buckingham & Goodall, 2015). The main focus of
this management system is regarding the overall organizational performance including department as well as
employee or such specific tasks. The rules or standards of this performance management system is arranged by
the senior leadership of the organization and also this system includes some particular tasks or consequences of
the organization by giving the feedback on time (Jurnali & Siti-Nabiha, 2015). Moreover, this management
system helps to compare the actual performance with desired performance of an employee. This report delivers
a brief description about how the performance management system is effective for an organization.
Discussion
According to (Gerrish, 2016), the performance management system explains as a process by which it is
easy to gather the continuous feedback by communicating with top managers or employees for achieving the
strategic goal of organization. With the help of this performance management system, it is easy to measure the
performance of the employees during the whole year and also address the issues from their performance in
order to fulfil the business target of the organization (Laihonen et al., 2015). As per the case scenario, as a
senior HR manager, at the time of checking organizational performance, it has been found that there occurs an
issue regarding the employees’ performance. It has been seen that in the performance appraisal, the rating of the
employees are inaccurate as well as incorrect. For that, the employees are too much concern about this situation
and they feel worried to see low rating after giving more effort to reach their target point. As a result, these
kinds of issues may cause the huge level of turnover of the employees and also the organization has lost the
quality employees.
Importance of performance management system
There are two reasons by which it can understand about the importance of the performance management
system. The reasons are as follows:

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1. This management system helps to review the annual performance – This reason helps to keep both of
the managers and also employees in a loop for looking the changes of their performance during the time
of appraisal (Lubis, Torong & Muda, 2016). Though this management system helps to measure the
performance therefore it helps to improve the overall organizational performance.
2. Through this management system, the managers can concern about the performance of the employees –
Employees are assumed that the managers have a great concern about their performance as well as care
them for reaching at their goals and also help if any employee face any work related issue. All of them
helps to receive the constructive feedback for improving their performance.
Critical evaluation of reason of occurrence of rater errors
Generally the rater error is considered as an error happened by managers at the time of providing rating
during the performance appraisal of the employees. By critically thinking, the diversity in the categorization of
the rater error occurs due to the managers’ behavior. In the performance management system, there exists so
many rater errors depending on various scenario (Arnaboldi, Lapsley & Steccolini, 2015). There are various
kinds of rater errors like halo effect, leniency error as well as central tendency errors etc.
According to the case scenario, here rater error happens due to the managers’ perception over the
employees’ performance. The employees are getting disappointed by overlooking their performance rating
instead of putting high effort to achieve their goal. Based on this scenario, here the rater error may be occurred
as halo effect or central tendency error. As defined by halo effect, it is totally depend on the managers’
perception on the employees’ performance. This kind of rater error depends on the positive as well as negative
impression on the evaluation of the employees’ performance. As a consequence, those employees who involve
in hard working for achieving their goal, they have faced the lower rating due to the negative impression of the
managers and for that those employees have lost their motivation towards their working.
On the other hand, described by central tendency error, the managers’ tendency to provide the middle
rating to all of the employees during the performance appraisal (Mone, London & Mone, 2018). For that, it
seems the same scenario while some of the effective employees give their best performance to reach at the
target point and by obtaining lower rating, they have demotivated towards their work.

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Recommendations
To rectify these kind of issues, as a senior HR manager it has to arrange a rater training program by
which it has to understand to the managers for providing the rating to the employees in accordance their
performance evaluation. This rater training program evaluates the accuracy of the rating by decreasing the rater
issues.
Overview of performance management system
Within the performance management system, there exists some of the factors for overviewing this
process.
Communication – About the designing process of the performance management system, it should be
informed to all of the employees during the launching of design process. In that case, if the execution of the
new system creates such threatening for the employees therefore, to solve that case, the change management is
required.
Automate – This management system involves a number of papers which are very difficult to maintain
in a proper way (Pulakos et al., 2015). Thus to reduce the paper work, the automation technology integrates
with this performance management system for tracking the performance of the employees as well as reduce the
work pressure or provide a standard approach by which it is easy to collect or store the data. This functionality
can able to capture the ratings of the performance, support the web pages consisting of information as well as
manage the workflow of the organization etc.
Pilot testing – After installing the new process of this system, it requires to conduct the pilot testing for
checking whether the evaluation of the new system is smooth or not. This provides the opportunity to measure
the reactions of system and also create an adjustments for improving the organization.

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Training to employees – It must require to provide the training to the employees so that they can handle
the new system for improving their performance. However, the exact training helps to understand the execution
of the systems.
Improvement and evaluation – It requires to evaluate the performance management system which leads
to improve the organizational performance. This includes the tracking of the completion of the training as well
as completion of the performance management activities.
Conclusion
The performance management system helps to improve the organizational performance. The human
resource management involves with a significant role in this system and they are mainly responsible for
providing the training to the employees so that they can handle the systems. Apart from that, the full execution
of this process occurs through a number of steps. Also, this system aids for measuring the performance of the
employees and track their performance for better evaluation. In this way, the performance management system
is effective for an organization to achieve their goals.

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References
Arnaboldi, M., Lapsley, I., & Steccolini, I. (2015). Performance management in the public sector: The ultimate
challenge. Financial Accountability & Management, 31(1), 1-22.
Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business
Review, 93(4), 40-50.
Gerrish, E. (2016). The impact of performance management on performance in public organizations: A meta‐
analysis. Public Administration Review, 76(1), 48-66.
Jurnali, T., & Siti-Nabiha, A. K. (2015). Performance management system for local government: The
Indonesian experience. Global Business Review, 16(3), 351-363.
Laihonen, H., Canonico, P., De Nito, E., Esposito, V., Martinez, M., & Mercurio, L. (2015). The boundaries of
a performance management system between learning and control. Measuring Business Excellence.
Lubis, A., Torong, Z. B., & Muda, I. (2016). The Urgency of Implementing Balanced Csorecard System on
Local Governebt in North Sumatra-Indonesia.
Mone, E. M., London, M., & Mone, E. M. (2018). Employee engagement through effective performance
management: A practical guide for managers. Routledge.
Pulakos, E. D., Hanson, R. M., Arad, S., & Moye, N. (2015). Performance management can be fixed: An on-
the-job experiential learning approach for complex behavior change. Industrial and Organizational
Psychology, 8(1), 51-76.