Performance Management System

This report provides an overview of performance management system in organizations. It discusses the components of an effective system and highlights its importance in aligning goals and objectives with employee performance.

Running head: PERFORMANCE MANAGEMENT SYSTEM
Performance Management System
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1 Performance Management System...................................................................................2
2.2 Identification and Discussion of Components of an Effective Performance
Management System..............................................................................................................4
3. Conclusion..............................................................................................................................7
References..................................................................................................................................8

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1. Introduction
Performance management system can be stated as an important and significant
systematic approach that helps in measuring the overall performances of employees. It is a
core procedure by which any specific organization can align their respective mission,
objectives and goals with all types of available resources and systems as well as setting of
priorities (Noe et al. 2017). A performance management system is responsible for
incorporating association as well as representative shared objectives and targets that are being
lined up with several assets and frameworks. The following report outlines a brief discussion
on performance management system with a proper discussion on the major components of
this system within an organization.
2. Discussion
2.1 Performance Management System
An effective performance management system is mainly responsible for aligning all
types of organizational goals and objectives with the respective goals of employees and teams
for the core purpose of incrementing efficiency, profitability and productivity (Van Dooren,
Bouckaert and Halligan 2015). Such systems even follow guidelines, which stipulate clearly
about the results and activities, by which any particular team or employee is being evaluated
during conduction of performance appraisal. For implementation of a performance
management system, a significant commitment analysis is required to be completed at first
for creation of the mission statement for job and it is being created in respect to purpose,
scope, product and customers (Decramer, Smolders and Vanderstraeten 2013). As soon as the
commitment analysis is being completed, working analysis of the specific job is being
considered so that all the critical goals as well as performance standards are being effectively
determined for each and every job.

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The execution administration framework is a continuous process to characterize and
convey every activity part and duty, execution desire, goals and even setting the requirements
within subordinates and administrator. The respective skills, competency and knowledge gaps
are well identified by this particular system implementation and this is improvised by
providing significant mentoring, coaching, trainings and guidance to the teams or employees
at few different designations and levels (Cascio 2015). Performance management system also
optimizes the outcomes through significant channels and then processes for better reduction
of grievances and conflicts within the teams or few employees. The main purposes of a
performance management system are as follows:
i) Strategic: The organizational strategic goals are well aligned and linked with each
and every activity performed by the employee with an effective performance management
system.
ii) Administrative: It even sets the respective deciding factor for promotion, demotion
of an employee, increment of salary, termination and transfer of employee since it can easily
enable to recognize the various performers, under performers and non-performers to check
the skills and competencies of an employee (Bratton and Gold 2017).
iii) Communication: Effective communication is yet another important purpose of
checking performance management system. The main areas of improvement that are needed
by the employees is communication and it is being enhanced by this particular system.
iv) Developmental: This is the respective and significant structural method that is
required for communicating the several development plans, improvement areas and positive
feedback.
v) Organizational Maintenance: A performance management system has the core
capability of measuring achievements of teams and employees for better evaluation of

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performance gaps with several techniques and tools (Purce 2014). Thus, performance
standards are well maintained.
2.2 Identification and Discussion of Components of an Effective Performance
Management System
The most significant standards of performance management are majorly organized
and dispersed by the senior leadership within the organization by the respective task owners.
The performance management is also referred to as an integrated and strategic approach that
is used for increasing the organizational efficiency after subsequent improvement of the
employee’s performance and also development of individual or team capabilities. These
principles of performance management are majorly utilized within a work place and could be
applied in every segment of organization, in which individuals interact (DeCenzo, Robbins
and Verhulst 2016). An effective performance management system comprises of some of the
major and the most significant components, which are solely responsible for making the
system much more effective and efficient. Performance appraisal is termed as one of the most
basic and important types of performance management system. It is extremely vital and
significant to maintain the components of an effective performance management system. A
proper identification and discussion of the components of this particular system is given
below:
i) Planning of Performance: The first and the foremost component of this type of
effective performance management system is proper planning of performances (Jackson,
Schuler and Jiang 2014). A proper planning of performance eventually refers to the
organizational formal procedure to identify as well as plan the individual as well as
company’s objectives and even the most effective way to reach out to these goals and
objectives. This type of planning is being done by the employee and employer both by
involvement of a significant plan, known as development plan. The major and the most

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significant objectives of planning of performance involve to come to an agreement on
departmental job duties, for clarifying the several objectives, required to be obtained,
identification of competencies needed for completing the work and finally creating a proper
and effective career or performance development plan for that specific employee.
ii) Ongoing Performances Communication: The second important and significant
component of this type of effective performance management system is the respective
ongoing performances’ communication. A continuous monitoring of organizational managers
by means of an effective communication with the employees is eventually required for
understanding the performance of the employee to be evaluated. The organizational
management obtains a brief idea about the employee and hence it is much easier for the
management to set the salary increments and rewards and recognition (Paillé et al. 2014). For
providing significant advantages to the employees, manager as well as the entire
organizational management, a higher possibility of micro management and over
communication is possible. However, a well placed communication regarding employee
performances is extremely helpful for the employees and staff to capitalize on the subsequent
potential of these employees. These managers even need to ensure that every employee is
progressing towards successful achievement of goals and the weak employee should be
trained for enhancing his or her performances (Brewster, Chung and Sparrow 2016). Due to
such vast advantages, ongoing performance communication is termed as one of the most
important components of an effective performance management system.
iii) Gathering, Observation as well as Documentation of Data: The third significant
and noteworthy component of this type of effective performance management system is
proper and efficient gathering, observation as well as documentation of data. The data
regarding the employee performances is extremely vital and hence is required to be analysed
for obtaining major knowledge about how well an employee is performing (Albrecht et al.

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2015). Being the core part of an effective performance management system, three above
mentioned three activities of gathering, observation as well as documentation of data could be
done in any time of the entire year. This is being done outside the performance review or
performance appraisal meetings and documentations are being done for completing the
performance review meeting at the end of the year.
iv) Performance Appraisal Meeting: The fourth component of an effective
performance management system is performance appraisal meeting with the employee. This
particular meeting is the regular reviewing of the job performances of any specific employee
as well as his total contributions to the business. This type of meeting is even termed as
annual review or performance evaluation for evaluating the growth, skills and achievements
of an employee (Aswathappa 2013). The performance appraisal meeting even considers the
enhancement of work quality, higher efficacy and outputs. The three most important and
significant functions of a performance appraisal meeting in any business mainly include
providing subsequent feedback to an employee over the total contribution for either six
months or one year, identification of development requirements as well as opportunities for
gaining more improvements and finally helping to inform reviews about salary and bonus.
v) Performance Diagnosis as well as Coaching: This is the final important and
significant component of this type of effective performance management system. The
respective performances of various employees and staffs are required to be diagnosed and the
under performers are required to be trained properly so that performance management is
better for the entire organization (Purce 2014). The main purpose to keep this component is
coaching and feedback to the employees so that appropriate talent is being identified and
more productivity is highly enhanced. Thus, it results in better achievement of the
organizational strategic objectives and professional development for the employees and
managers.

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3. Conclusion
Therefore, from the above discussion, it can be concluded that performance
management is a distinctive set of activities, which eventually ensure that the organizational
goals and objectives are being met within an efficient and effective manner. This
management of performance could even emphasize on the organizational performance,
department as well as each and every employee working in this particular business for the
core purpose of managing the tasks. The above provided report has clearly demonstrated a
proper analysis of performance management system in any specific organization. The various
components of this particular system are also being well discussed in the report.

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References
Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee
engagement, human resource management practices and competitive advantage: An
integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1),
pp.7-35.
Aswathappa, K., 2013. Human resource management: Text and cases. Tata McGraw-Hill
Education.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Brewster, C., Chung, C. and Sparrow, P., 2016. Globalizing human resource management.
Routledge.
Cascio, W.F., 2015. Managing human resources. McGraw-Hill.
DeCenzo, D.A., Robbins, S.P. and Verhulst, S.L., 2016. Fundamentals of Human Resource
Management, Binder Ready Version. John Wiley & Sons.
Decramer, A., Smolders, C. and Vanderstraeten, A., 2013. Employee performance
management culture and system features in higher education: relationship with employee
performance management satisfaction. The International Journal of Human Resource
Management, 24(2), pp.352-371.
Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic
human resource management. The Academy of Management Annals, 8(1), pp.1-56.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

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Paillé, P., Chen, Y., Boiral, O. and Jin, J., 2014. The impact of human resource management
on environmental performance: An employee-level study. Journal of Business Ethics, 121(3),
pp.451-466.
Purce, J., 2014. The impact of corporate strategy on human resource management. New
Perspectives on Human Resource Management (Routledge Revivals), 67.
Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the
public sector. Routledge.