Performance Management System: Components and Importance Analysis

This essay delves into the intricacies of performance management systems, highlighting their crucial role in Human Resource departments for evaluating employee performance. The essay explores the components of effective performance management, including performance planning, appraisal and review processes, quality improvement initiatives, feedback and coaching mechanisms, rewarding good performance, performance improvement plans, and ongoing conversations. It emphasizes how these components contribute to enhanced employee productivity, high-quality output, and overall company success. The analysis draws on various academic sources to support its arguments, underscoring the importance of a well-structured performance management system for achieving organizational goals and fostering employee development.

Essay

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERNCES...................................................................................................................................5

INTRODUCTION
Performance management is one of the main function of HR and it comprises many
activities such as continuous progress review and communication, feedback and training session
to improved performance. In the same way, the entire report is also based upon effective
performance management system through authors points and their argument such that as per the
view of Buckingham and Goodall, (2015) performance appraisal system is the simple process
that is used to measure an individual employee performance and the process of individual
performance management also starts with the joining of new employee in a system and also ends
only when an employee quits. Thus, report will present the importance of performance
management system and their components.
MAIN BODY
Performance Management System:
As per the view of Martínez-Costa, Jimenez-Jimenez and Castro-del-Rosario (2019)
performance management system is the tool that is mainly used to communicate the goals of a
firm to an employees and tracking their progress in order to achieve the goals which is assigned
to them. Therefore this tool mainly help manager to manage their resources and leads an
organization towards success. It is one of the most important and complicated tool of HR of
every company that mainly includes activities such as feedback of their employee performance,
taking review of their progress, steady communication etc. On the other side, .. argues that
performance management system reflects the individual performance or the achievement of an
employee that further evaluates and keep tracking all employee's performance of an organization.
In addition to this, a performance management system mainly includes selection of a right set of
people by implementing an appropriate selection process, negotiating the requirements and some
performance standards in order to measure the outcome and overall productivity against
predefined benchmarks, it also helps to provide a continuous coaching and feedback at the time
of delivery of a performance.
Moreover, it is also argued by the Poltronieri, Ganga and Gerolamo (2019) that the
system is often based upon organizational and job specific competencies that needs to be
obtained for a successful job performance. The performance management system also help to
determine the employee development opportunities and it also reward the employee who are
good performer as a employee deserving the promotion that can easily be identified. In addition
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to this, the performance management system should be accurate and fair because an individual
performance is always a combination of their won skills and abilities of an individual and at that
time, the managers should also judge their employee with their performance, behavior and their
dedication towards the company. It is also evaluated that if the management system is accurate or
efficient, then it leads to achieve all the goals of the firm and take a business to further level of
success. Thus it clearly shows that the performance management system is providing the
promotional and career developmental support to their employees and also through effective
guidance from their manager, the employees raise their working efficiency and attain the goals of
a firm in defined time as well.
Therefore there are various components of performance management system which are as
mentioned below:
Performance Planning: It is a first crucial component of a performance management
system that is mainly done by the appraisee and the review of their management. In this, the
employee is decided upon the target and their key performance areas which can be performed for
year with performance budget that further finalize after a mutual agreement between a manger
and an employee (Component of Performance Managwement System, 2019). Therefore,
manager in this stage mainly responsible for the setting their performance expectation and also
provide feedback and coaching. This shows that manager of the company need to take an active
part in the performance management system to determine their employee's actual performance.
Performance Appraisal and Reviewing: In big firms, the appraisal are basically
perform twice in a year and during this process, the appraisee initially offers the self filled up
rating in the self appraisal form. Then the final ratings are provided by the appraiser for the
measurable achievements of an employee. Thus this entire process requires 360 degree feedback
and they managers also take the feedback from their peers as well (Martínez-Costa, Jimenez-
Jimenez and Castro-del-Rosario, 2019). Therefore, this typically describe the skills and
competencies which describe the employee's performance and then the performance is judges
and compared by others as well. Thus the entire process of review requires an active
participation of both employees and the appraiser in order to determine any loopholes in an
employee performance.
Quality Improvement process: It is also consider an important component of
performance management system such that a firm can also make changes in their decision
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making using the data and improve policies, programs and evaluated the outcomes as well.
Moreover, in order to improve the quality, there is a need to change the management so that it
will help to boost up the employee performance and further it creates a better learning
organization as well. Therefore, it is also analyses by Bauwens and et.al., (2019) that the firm
should also used some key performance indicators that helps a business to determine the
performance and improve the quality as well. Using advance technology into the working area
will also help a business to improve the policy and programs.
Feedback and Coaching: It is the another important component of an performance
management system in which an employee requires awareness from their appraiser about the
areas of improvement and also the want to know they they are contributing the expected levels of
performance or not. Thus, it is also evaluated by Collings, Mellahi and Cascio, (2019) that an
employee of a firm receives an open and very transparent feedback with their training and
development needs. Thus, the performance management system also adopts all the possible steps
in order to make sure that an employee meet their expected outcomes of a firm through an
effective personal training or coaching that helps to meet the goal and also improve the overall
productivity. It Is further analyzed that an employee also want to know how they are performing,
as they want to do a good job. That is why managers are regularly tell their about their
performance and when an employee can evaluate their performance well then they can set their
own goals and start to become a self- learner as well.
Rewarding good performance: It is one of the most important component such that it
will further determine the work motivation of an employee and at this stage, an employee of an
organization is publicly recognized for their good performance and then they are rewarded. As
per the view of … this stage is consider quite sensitive for an employee as this may have a direct
influence on the self esteem and achievement orientation. It should be compulsory for every
employer that if their employee perform good then they should provide reward for their good
performance and provide ways that helps in coping up with the failures and satisfies the need for
an action as well.
Performance Improvement Plans: It is another important component of a performance
management system and in this stage, goals are estaComponent of Performance Managwement
System. 2019blished for an employee and even a new deadline is also provided in order to
complete the objectives. In this, managers clearly communicated with their employees and
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employee must improve their performance with proper deadlines. But on the other side, Van
Dooren, Bouckaert and Halligan, (2015) argue that employee mobility is an issue that companies
are facing and at that time, this also ensures that an employee necessarily move to their next
challenge, the talents and skills which further made them good fit for a company. Therefore, this
clearly states that proper succession planning make sure that the employees should be raise by
their performance and then the manager of the firm are easily determine their working
performance.
Ongoing conversation: This component of performance management system basically
brings the other four items together i.e. management, goals, learning and feedback. Even the firm
or an organization should create a culture where these four items are discussed in an open
manner. It has been evaluated by Rajnoha and Lesníková, (2016) that a good working culture
always motivated an employee to perform well and if they needs an extra improvement then
manager of the firm are ready to provide an extra coaching for the same. Thus, the performance
management system also helps to evaluate the performance level of an employee and even by
implementing competency mapping and different assessment technique, potential appraisal is
performed that further provides a crucial inputs for a succession planning as well as job rotation.
CONCLUSION
By summing up above report it has been concluded that performance management system
is one of the most important and crucial function of Human Resource Department in which they
can easily judge and determine the actual performance of an employee. Further, report also
concluded that performance management system also assist in ensuring a high quality, efficiency
and better productivity of an employees. The report also concluded different component that
realized that performance management system basically boost the productivity and provide better
output to the company as well.
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REFERNCES
Books and Journals
Bauwens, R. and et.al., 2019. Performance management fairness and burnout: implications for
organizational citizenship behaviors. Studies in Higher Education.44(3). pp.584-598.
Buckingham, M. and Goodall, A., 2015. Reinventing performance management. Harvard
Business Review.93(4). pp.40-50.
Collings, D. G., Mellahi, K. and Cascio, W. F., 2019. Global talent management and
performance in multinational enterprises: A multilevel perspective. Journal of
Management.45(2). pp.540-566.
Martínez-Costa, M., Jimenez-Jimenez, D. and Castro-del-Rosario, Y. D. P., 2019. The
performance implications of the UNE 166.000 standardised innovation management
system. European Journal of Innovation Management.22(2). pp.281-301.
Poltronieri, C. F., Ganga, G. M. D. and Gerolamo, M. C., 2019. Maturity in management system
integration and its relationship with sustainable performance. Journal of Cleaner
Production.207. pp.236-247.
Rajnoha, R. and Lesníková, P., 2016. Strategic performance management system and corporate
sustainability concept-specific parametres in Slovak Enterprises. Journal of
Competitiveness.
Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the public
sector. Routledge.
Online
Component of Performance Managwement System. 2019. [Online]. Available through:
<https://www.managementstudyguide.com/components-of-performance-management-
system.htm>.
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