Performance Management System: Strategic Approach for Organizations

This essay provides a comprehensive overview of performance management systems within an organizational context. It begins by defining performance management as a systematic approach to measuring and improving employee performance, aligning individual goals with organizational objectives. The essay delves into the various components of a performance management system, including performance planning, which involves setting targets and key performance areas; performance appraisal, encompassing both self-appraisal and reviewer evaluations; feedback and counseling, providing employees with insights for improvement; rewarding good performance to boost motivation and retention; performance improvement plans, setting new goals and deadlines; and potential appraisal, assessing employees' capabilities for future roles. The essay emphasizes the strategic importance of performance management in fostering a flexible workforce, enhancing employee capabilities, and ultimately achieving organizational success. The essay references multiple academic sources to support its arguments.

Running head: PERFORMANCE MANAGEMENT SYSTEM
Performance Management System
Name of the student
Name of the University
Author note

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Performance Management System refers to systematic approach that helps in
measurement of performance of employees. It is indicative of a process that helps the
organization in aligning the mission and the goals with that of the available resources.
Performance Management encompasses the activities like the goal setting, feedback along
with the continuous progress review that helps in improving the performance of the
employees within an organization (Noe et al. 2017). The performance management in an
organization helps in the establishment of a flexible workforce that helps the employees in
being responsive to the needs of the management. It plays a crucial role in improving overall
performance of company that can be improved with the help of improvement of the
performance of the individuals. This essay discusses about the various components pertaining
to performance management system in an organization.
Performance Management System helps in the promotion of superior performance of
the employees by the communication of expectations to the employees. It helps in defining
the roles within the competence framework that helps in the establishment of benchmarks in
an organization (Van Dooren, Bouckaert and Halligan 2015). Performance Management
System is indicative of a strategic approach that helps in the delivering of the successful
results within an organization. It helps in the development of capabilities of teams along with
the individuals. Performance Management refers to the communication process that takes
place between supervisors along with employees in an organization. It helps in the
establishment of performance expectations that includes the results, actions along with the
behaviour of the employees. It helps in providing feedback to the employees that helps them
in diagnosing problems. The managing of the system performance along with aligning of the
objectives helps in the effective delivery of the strategic goals of an organization
(Buckingham and Goodall 2015). There are many people who argue the fact that there exists
co-relation in between performance management programme and the results of an

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organization. The performance management system helps in optimizing the incentive plans
that encourages the employees of an organization. It helps in creating the transparency that
helps the employees in achieving the goals. The professional development programs in an
organization helps a business in achieving the objectives.
Performance Management System has various components like performance
planning, performance appraisal, feedback on performance, rewarding of the good
performance, performance improvement plans and the potential appraisal. Results of the
performance management are used for the purpose of development of employees and it helps
in improving the skills of the employees. Performance planning can be said to be a crucial
component pertaining to the process of performance management. It helps in forming basis in
relation to the performance appraisals in an organizations (Sharma, Sharma and Agarwal
2016). The performance planning is done in a joint manner by appraise along with reviewer
towards the beginning of performance session. It helps in closing the gap in between the
actual results and that of the desired results in an organization. At this stage, employees
decide regarding the targets along with the key performance areas that is performed across
the course of a year. The performance problem in an organization being identified can help in
the process of the performance planning in an organization.
The performance appraisals are held twice within a year within the framework of an
organization. It takes place in form of the annual review that is held towards end of financial
year. In the process of the performance appraisal, appraise offers that of the self- filled up
ratings with self-appraisal form. It helps an individual in describing his achievements across a
course of time in that of the quantifiable terms (Morden 2016). Final ratings are given by
appraiser after process of the self-appraisal that helps in measuring the achievements of
employees who are being appraised in an organization. The process of the review needs the

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active participation of employees along with appraiser that helps in analysing weakness in the
performance of a person.
The process of the performance management lays importance on the aspect of
feedback along with counselling. This helps the employees in acquiring the awareness from
appraiser in regard to areas of the improvements. It helps in providing the information
regarding whether the employee has been able to contribute to expected level of the
performance. This helps the employees in getting the transparent feedback that helps in
suggesting training along with the development needs of employees in an organization
(DeNisi and Murphy 2017). Appraiser takes recourse to the possible steps that helps in
ensuring that employees are able to meet expected outcome in relation to an organization.
The appraiser provides the counselling and the guidance that helps in providing guidance to
the employees of an organization. The training programmes develops competency of the
employees that helps in improving overall productivity of employees.
The rewarding of the good performance is an important component that determines
work motivation of employees. The employees of a company are recognized for providing
the good performance and they are accordingly rewarded. This stage can prove to be sensitive
for the employees because this has direct influence on self-esteem of an individual. The
praise that the employees receive helps in increasing the engagement of the employees (Iqbal,
Akbar and Budhwar 2015). It plays an integral role in retention of the employees within the
organization. It helps the employees in staying focussed on the job that helps in the depiction
of the positive attitude of the employees. The employees work on the basis of the rewards
that helps in building a positive and a competitive work culture (Ikramullah et al. 2016). The
contributions that are recognized by the organization proves to be helpful for employees that
helps them in dealing with the failures in a successful manner. It helps in satisfying the need
that the employees in an organization have for the element of affection.

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The Performance Improvement Plans helps the employees in setting the fresh goals
for the employees of a company. It helps in providing the new deadline that helps the
employees in accomplishing the objectives. The managers in an organization should develop
the draft plan that should be reviewed by the human resources department. It helps in the
measurement of the SMART goals that can greatly facilitate the growth of an organization.
The plan should be reviewed by the human resources department that helps in removing any
kind of bias against employees of an organization. The managers in an organization can take
care of the fact that the scheduling of the progress meeting takes place in a timely manner. In
the event of the gaps in the training being identified, the management should take steps that
can help in removing the gaps that can help the organization in making profits (Harrington
and Lee 2015). The employees in an organization are made known about the areas in which
they should improve that helps in the development of employees in an organization. The
employees are provided with the stipulated deadline and the employees are supposed to show
improvements pertaining to the deadlines. The plan is developed in a joint manner by both
appraise along with appraiser and it is approved in the mutual manner.
Potential appraisal forms the basis that helps in both the lateral along with the vertical
movement of the employees. The organization implements the competency mapping along
with the other assessment techniques that helps in carrying out the potential appraisal. It helps
in providing the crucial inputs that helps in the area of the succession planning along with the
job rotation. Potential appraisal helps in identifying hidden talents along with skills of an
individual. It helps in evaluating potential of employees that helps an individual in assuming
the higher positions within organizational hierarchy (Morden 2016). It helps in informing the
employees about the future prospects. It is the forward looking process that helps in
providing the future direction to the employees within an organization. Potential appraisal
includes the psychological test along with the performance appraisal record that proves to be

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useful for employees of an organization. It can help the organization in developing the
climate that can increase the proficiency of the employees.
Performance Management System is indicative of the systematic approach that proves
to be valuable in measuring employee performance. It proves to be useful in aligning goals
with the resources that are available in an organization. It helps in promoting superior
performance and communicates expectations to employees. It defines roles pertaining to
competence framework that is instrumental in establishing benchmarks in an organization.
Performance planning is a significant concept in relation to the performance management. It
helps in conducting the performance appraisal within an organization. The good employees
of a company being rewarded provides motivation to employees. The good performance of
the employees should be appropriately awarded within an organization. Performance
Improvement Plans helps in setting of fresh goals that greatly assists employees of company.
The deadlines of the employees are set based on the new objectives of an organization. It
helps the employees in achieving their objective in an organization.

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References
Buckingham, M. and Goodall, A., 2015. Reinventing performance management. Harvard
Business Review, 93(4), pp.40-50.
DeNisi, A.S. and Murphy, K.R., 2017. Performance appraisal and performance management:
100 years of progress?. Journal of Applied Psychology, 102(3), p.421.
Harrington, J.R. and Lee, J.H., 2015. What drives perceived fairness of performance
appraisal? Exploring the effects of psychological contract fulfillment on employees’
perceived fairness of performance appraisal in US federal agencies. Public Personnel
Management, 44(2), pp.214-238.
Ikramullah, M., Van Prooijen, J.W., Iqbal, M.Z. and Ul-Hassan, F.S., 2016. Effectiveness of
performance appraisal: Developing a conceptual framework using competing values
approach. Personnel Review, 45(2), pp.334-352.
Iqbal, M.Z., Akbar, S. and Budhwar, P., 2015. Effectiveness of performance appraisal: An
integrated framework. International Journal of Management Reviews, 17(4), pp.510-533.
Morden, T., 2016. Principles of strategic management. Routledge.
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.
Sharma, N.P., Sharma, T. and Agarwal, M.N., 2016. Measuring employee perception of
performance management system effectiveness: Conceptualization and scale
development. Employee Relations, 38(2), pp.224-247.
Tziner, A. and Rabenu, E., 2018. Performance appraisal and beyond: Directions for future
research and application. In Improving Performance Appraisal at Work. Edward Elgar
Publishing.

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Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the
public sector. Routledge.