HRM Performance Management: Challenges and Practices

This report delves into the intricacies of human resource management (HRM) with a specific focus on performance management within the global retail sector. It identifies and critically examines three major challenges faced by HR managers: lack of alignment between performance objectives and market trends, leadership and management styles, and the difficulty in obtaining the right performance metrics. The report then reviews academic literature to identify best practices that address these challenges, emphasizing the importance of clarifying the core purpose of performance management, engaging stakeholders, and conducting periodic performance reviews. Finally, the report provides practical recommendations and strategies for HR managers to optimize their performance management processes, aiming to enhance employee performance and organizational competitiveness in the dynamic retail environment. This assignment is a valuable resource for students studying leadership management, providing insights into real-world HRM issues and solutions.

Running head: HUMAN RESOURCE MANAGEMENT
Human resource management
Name of the student
Name of the university
Author note

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Executive summary
The core rationale of this report is to discuss about the concept of performance management in
the current business state of affairs. In doing so, there are different including challenges and best
practices being evaluated here. Challenges of the accomplishment of performance management
process include lack of alignment, leadership approach and involving right metrics. These
challenges are evaluated on the basis of different critical reviews of the authors. In addition, a
few best practices of performance management are discussed in this report against the above
identified challenges. It is identified that global retail sector is one of the most challenging and
intensely aggressive sectors and hence, the complexities in the performance management process
are more. Accordingly, a few recommended steps are suggested for the human resource
managers to gain the maximum utility from the performance management process.

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Table of Contents
Introduction......................................................................................................................................3
Identification of the key challenges.................................................................................................4
Lack of alignment........................................................................................................................4
Leadership and management.......................................................................................................5
Getting the right metrics..............................................................................................................6
Determination of the best practices in the performance management process................................7
Identification of the core purpose................................................................................................7
Extensive engagement of the stakeholders..................................................................................8
Periodical review of the performance..........................................................................................9
Recommended actions and strategies............................................................................................10
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

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Introduction
There are different and multiple dimensions of the human resource management being
considered by the modern day business entities. This is because that the current business factors
are more diverse in nature than they were a few years ago. With the change in the business
dynamics and development in the business complexities, the concept of the human resource
management is also getting more diverse (Noe et al., 2017). One of the major elements of the
current definition of the HR management is the performance management. This refers to the
process of managing the employees in enhancing their performance in the workplace and
compensating them accordingly (Kearney, 2018). With the effective and proper implementation
of the performance management process, the performance of the employees will be reviewed
correctly and they will be managed as per. This topic of the human resource management is
chosen because in the present cutthroat business state of affairs, the performance of the
employees is the key determinant for the competitiveness of the entities (Decramer, Smolders &
Vanderstraeten, 2013).
Global retail sector is one of most and intensely competitive sectors in the world with
numerous large, medium and small scale entities are operating in different markets. In addition,
retail sector is also facing the challenges from the rapid change in the market trend (Moatti et al.,
2015). This is due to the reason that retail sector is based on the daily preference pattern of the
end customers and hence it is important for the retail corporations to stay relevant in the market
at any point of time. In this case, the effective performance management process will play the
role of gaining the maximum competitiveness from the side of the internal stakeholders
(Hemalatha, 2013).

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This report will argue about the major challenges being faced by the human resource
managers on the basis of the literatures. In addition, the best practices in the current approach of
the performance management process will also be discussed along with the recommendations for
further improvement.
Identification of the key challenges
As discussed in the above section, implementation of the performance management
activities is much important but with certain challenges for the human resource managers. There
are different opinions identified from various authors regarding the major challenges in the
implementation of the performance management activities. The following section will evaluate
about the three major challenges in implementing and following the performance management
activities.
Lack of alignment
One of the major challenges is the difficulty in aligning the objectives of the performance
management process with that of the market trends and requirements. As per Arnaboldi, Lapsley
and Steccolini (2015), the current retail market trend and scenario is changing at a rapid pace and
it is important as well as challenging for the human resource managers to line up the business
objectives and process of the performance management activity with it. The authors have also
stated that in the present time, majority of the large scale public companies are operating on
global basis and thus they are facing multiple and diverse sets of challenges and issues in their
business. It is getting more challenging for the human resource managers to design the certain
approach of the performance management in coping up with the change in the market and
business trends. For example, in the global retail business, companies such as P&G and Unilever

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are operating across the world and they are facing different market scenarios in different regions
(Sparrow & Cooper, 2014). Thus, it is a major challenge for the human resource managers of
these entities to come up with agile and flexible performance management program to cope up
with these diverse trends and factors.
Furthermore, it is stated by Nielsen and Hunter (2013) that each of the market regions in
the global retail sector is reacting in different manner and hence, the expectations and
requirements from the employees from each of these locations are different. In this case, there
are number of instances being seen where the objectives of the implemented performance
management plan are not getting aligned with the real world situations. However on the other
hand, a complete different theory is being presented by Seuringt and Gold (2013). According to
them, the difference in the cultural factors is also posing challenges for the human resource
managers in implementing the performance management activities. This is due to the reason that
different regions are having different social and cultural dominance and in the current global and
diverse workforce, this is more evident (Kim & Kang, 2016). Employees are having different
motivational factors and different approaches and thus, implementing certain performance
management is not effective for the entire workforce.
Leadership and management
The next challenge being faced by the human resource managers in implementing
performance management activities is the difference between the leadership objectives and real
world situation. As per Selviaridis and Norrman (2015), the approaches of the leaders towards
how the performance of the employees will be evaluated also determine the extent of successful
implementation. This is due to the reason that if the demand and expectations of the leaders from

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the employees in terms of performance are not matching with that of the expectations of the
employees, then, it is challenging for the human resource manager to successfully implement the
performance management activities. In this case, it is further elaborated by Cappelli and Keller
(2014) by stating the fact that difference between the job demand and job resources is a major
challenge for the human resource manager in successfully implementing the performance
activities. This is due to the fact that retail sector is facing increasing trend of competition and
various other challenges and in line to that, the expectations of the leaders from the employees
are also increasing. In this case, the job demand from the employees is exceeding the resources
available and hence the performance of them is not getting evaluated properly (Schaufeli &
Taris, 2014).
Bennett, Lance and Woehr (2014) discussed that the style of leadership is also affecting
the implementation process of the performance management. This is because that if the leaders
are following more participative process in dealing with the employees, then the issues and
challenges of the later are getting identified and mitigated. This is ensuring the enhancement of
the performance of the employees. However, on the other hand, with the leaders embracing
autocratic and output oriented approach, the requirements and prospect of the employees are not
getting fulfilled. Hence, it is getting challenging for the human resource managers to successfully
implement the performance management process if the leadership approach is not favorable
(Burke, Allisey & Noblet, 2013).
Getting the right metrics
There different evaluation process and measures being followed in the performance
management plan and accordingly, the right metrics should be used. According to Giovannoni &

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Pia Maraghini (2013), it is a major challenge for the human resource manager in getting the right
and effective evaluation metrics for the performance feedback of the diverse sets of employees.
This is due to the reason that different employees are having different level of performance and
in the current retail business scenario; the expected performance from the employees is not
always the same. In this case, the key challenge for the human resource manager is to ensure the
consideration of all the relevant factors for evaluating the performance of the employees. The
authors have also stated that it is also a major challenge for the human resource manager to
change the performance metrics according to the change in the business scenario. Appelbaums et
al. (2017) further stated that the performance metrics to be used in the performance management
process should be accepted both but the upper level managers and the employees. This is also a
challenging process because the interest of the managers and the employees is different and
conflicting and meeting the expectations of both with the uniform performance metrics is a major
challenge for the human resource managers (Van Looy & Shafagatova, 2016).
Determination of the best practices in the performance management process
In the above section, there are various challenges being identified that are faced by the
human resource managers in implementing them. Thus, it is important to also identify the best
practices in this case that will ensure the maximum utility and return from the performance
management program. In the following sections, different best practices will be discussed
critically on the basis of the opinions of different authors.
Identification of the core purpose
One of the key practices to be done by the human resource managers in relation to the
performance management process is clearing out the core purpose of the performance

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management plan. According to Spekle and Verbeeten (2014), effective implementation of the
performance management plan is having advantages for all the involved stakeholders and the
core purpose of this process to achieve the maximum for the business operation. This should be
made clear among the managers as well as the employees. In the above section, lack of
alignment is identified as a key challenge for the implementing the performance management
plan. Hence, if both the managers and the employees’ gets clear about the core purpose of
implementing this plan, then the alignment will be better will be reflected in the better
organizational performance. According to Anitha (2014), the managers should be communicated
and appraised about the fact that investment in the performance management plan will be
beneficial in getting the maximum from the side of the employees and it will ultimately benefits
the performance level of the organization only. On the other hand, the employees should be
motivated about taking part in the performance management program by stating the potential
advantages for them. The employees should be aware about the fact that they will be benefited
from the effective implementation of the performance management plan.
In the current diverse environment, different employees and managers will be at the
different perspectives but their core objectives of gaining more will be same. Hence, as per Mone
and London (2018), the best practice for the human resource will be to ensure that effective
implementation of the performance management plan will be beneficial for both the managers
and the employees in gaining more. Internal stakeholders comprising of them will gain more
only when the gain for the organization will be more. Hence, they will be motivated in better
performing in the workplace.
Extensive engagement of the stakeholders

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Engagement of the involved stakeholders is important to have the holistic impact of the
performance management plan and to have the overall benefits for the organization. According
to Bao et al. (2013), it is important for the human resource managers to engage with each of the
involved stakeholders in designing the approach of the performance management process. This is
due to the reason that in different instances, it is seen that managers or the employees are not
getting aligned with the performance management plan or the plan is not well aligned with the
business objectives. Thus, if all the involved stakeholders can be engaged from the initial stage
of the performance management plan, then each of the factors of them will be considered and
alignment will be better. However, on the other hand, in this case, it is stated by McDavid, Huse
and Hawthorn (2018) that consideration of all the relevant factors of the involved stakeholders in
designing the performance management plan can also be challenging because it will create
barriers in having a consensus based performance management plan.
Periodical review of the performance
One of the major challenges in implementing the performance management plan
identified is the metrics to be used. According to Yadav and Sagar (2013), periodical review
should be done over the performance of the employees. This will help in identifying the key
challenges being faced by them and how to get them mitigated. On the other hand, periodical
review of the performance of the employees will also help to have the understanding about the
areas of improvement and change in the expectations of the involved stakeholders. Thus, it will
be beneficial to known whether the implemented metrics are effective enough or not and
accordingly they should be changed. On the other hand, it is stated by de Waal and Kourtit
(2013) that the key performance indicators to be used in the performance review should be
diverse to consider different performance perspectives.

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Recommended actions and strategies
On the basis of the above analysis of the challenges and best practices in the performance
management plan, there are few recommendations to be made. It is recommended that
recognition and reward should be given the major focus in the performance management plan for
the employees (Melnyk et al., 2014). This is due to the reason that the current retail business
sector is based on the performance in the market and sales figures. Thus, if the good figures of
the employees can be recognized and rewarded, then they will be motivated to perform better
and others will also get motivated by this. In addition, it should also be noted that in the
performance management plan, not only the negative aspects of the employee performance
should be identified but also to appraise them (Hatry, 2013). This will help them in engaging and
encouraging the employees to get involved in the performance management plan. It is also
further recommended that the human resource managers should design short term goals for the
involved stakeholders in the performance management plan. This is due to the reason that
achieving the short term goals will be easier and thus the motivation of the stakeholders will be
high by achieving each of them (Lacerda, Ensslin & Ensslin, 2014).
As identified in the above analysis, leadership styles and approaches are having huge
influence in the determination of the effectiveness of the performance management process.
Hence, it is recommended that the leadership approach should be made more employees oriented
over the output orientation (Parida et al., 2015). This is due to the reason that employee oriented
approach of the leaders and upper level managers will be beneficial to determine the job
resources for the respective job demands. Higher level of participation of the leaders and
managers will help to identify the required resources and providing them accordingly. Hence, the
employees will be better equipped to enhance their performance to the next level. Lastly, it is

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recommended that 360 degree feedback should be implemented in the retail sector for the
evaluation of the performance of the employees (Karkoulian, Assaker & Hallak, 2016). This will
help to consider different factors in employee performance and ensuring accurate evaluation
approach.
Conclusion
This report concludes that implementation of the performance management plan is
having number of challenges to be faced by the human resource managers. The three major
challenges are identified in this report. On the basis of these challenges, the best practices in the
performance management process are also evaluated through the various literatures. It is
identified that engagement of each of the stakeholders is important in the performance
management process to ensure the maximum effectiveness. This report also identified that due to
the competitive and diverse scenario in the global retail sector, the challenges in implementing
the performance management process are more. It is recommended that 360 degree feedback
management system will be one of the most effective choices for the performance evaluation
process of the employees.

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