Performance Management for HR: An Essay Analysis (HC2101)

This essay delves into the critical practice of performance management within human resource management. It defines performance management as a continuous process of identifying, measuring, and developing organizational performance to achieve strategic goals. The essay outlines the key components of an effective performance management system, including management involvement, performance planning, appraisal and reviewing, feedback, rewarding good performance, performance improvement plans, and potential appraisal. Furthermore, it explores various methods for measuring employee performance, such as the graphic rating scale, management by objectives, and forced ranking. The essay emphasizes the importance of performance management in enhancing employee empowerment, organizational development, and overall market performance, concluding that effective performance management is essential for achieving organizational objectives. The essay references relevant literature to support its arguments and analysis.

Running Head: Performance Management 0
Performance Management
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Essay on performance management 1
Performance management is an essential practice for human resource management,
which is necessary in order to achieve its goals and objectives. Performance management
refers as a process which constantly identify, measure and develop the performance and
productivity of the organization because the performance of all the members of the
organization impact the overall missions and goals of the organization. In other words,
performance management can be defined as a process of communication between
employer and employee which occurs from time to time in a year and it help the
organization in achieving the organizational strategic objectives (Schlafke, Silvi and Moller,
2012). The process of communication involves clarifying expectations of organizational
performance, identifying the goals, setting objectives to achieve the goals, providing
feedbacks from employees and reviewing results of final performance of their employees.
Performance management ensures that employees are well aware about their key
responsibilities, aware of level of their performance which is expected by the company,
they have opportunities for various training and development programs which helps in
increasing the performance and productivity of the organization, get feedback on the
performance of their employees and implement of rewards system for enhancing the
productivity of their employees (Brudan, 2010). Performance management helps the
organization in various ways such as high employee empowerment, development of
performance of employees, creating various strategies for development of the
organization, help in maintain effective organizational culture, increase value of
organization, improving its performance in the market, better decision making, improving
the performance of lower level of management and achieve organizational goals and
objectives. This essay is related to the components of performance management and
methods from which organization can measure the performance of their employees
(Kagaari, Munene and Ntayi, 2010).
Components of effective performance management system –
There are various components of effective performance management system such as
performance planning, performance appraisal, feedback, rewarding the employees for
good performance, plans for improvement of performance and potential appraisal, which
helps the organization in increasing their performance, productivity and achieving its goals
and objectives (Fryer, Antony and Ogden, 2009).
1. Management involvement – It is the first components of effective performance
management system. According to this, manager are responsible for setting up the

Essay on performance management 2
expectations of performance of individuals as well as the overall organization,
providing feedbacks to their employees related to their performance towards the
organization and giving rewards and recognition to the best performer for their best
performance, so it helps the company in enhancing the productivity of their
employees towards the organization (Ashdown, 2018).
2. Performance planning – Performance planning is an important component of
effective performance management system which create the basis of performance
management system. Both the employer and the employee plan their performance
at the starting point of their work session. With the mutual agreement between the
employer and employee, KRA’ and budget for performance are decided.
3. Performance appraisal and reviewing – Organizations generally have either semi-
annual review or annual review in which they reviewing the performance of their
employees on the basis of at want extent they achieve their targets effectively and
efficiently and in what time they complete their targets then organization appraised
the best employee. This process also include self-review of their employees for their
performance towards the organization (Barth and Beer, 2017).
4. Performance feedback – This is also important component of performance
management system in which there is communication session between employer
and employee. The employer give feedback to their employees and tell them about
their performance, area where they can improve their performance, how they can
improve their performance, employee’s level of contribution towards the overall
performance of organization and expected performance achievement from them by
the organization. The employer need to adopt all necessary steps to ensure that the
employees able to meet their target by effective guidance by them, developing
various training programs for increasing the productivity and performance of their
employees (Canonico, et al, 2015).
5. Rewarding good performance – The next step of the process of performance
management system is to rewarding or recognizing the employees for good
performance for enhancing motivation of the employees towards their work and it
also helps in increasing the performance and productivity of the organization. This
stage is sensitive for every employee because it directly influence on achievement
orientation and self-esteem need, it help the employees in fulfilling the need for
affection.
6. Performance Improvement Plans – After rewarding employees for their best
performance then next step of performance management process is to plans for

Essay on performance management 3
improvement of performance for those employees who were contribute lack to the
overall performance of the organization. In this step, new objectives are set for
improving the performance of employees. Employer has to tell to their employees
about how they can improve their performance and achieve its objectives effectively
and efficiently.
7. Potential Appraisal – This is the last component of performance management
system which helps the organization in influencing of employee’s vertical and lateral
movement. Organization can use competency mapping and various technologies
for successful appraisal for their employee’s performance and it includes
succession planning and rotation of job of employees within the organization
(Blahova, Palka and Haghirian, 2017).
Methods of measuring performance management –
Every organization has to measure the performance of their employees as well as overall
organization through performance management systems. Organization can determine
compensation of employees, employment status and opportunities for development of their
employees through performance measurement for the employees. So, the programs
related to performance mannagement include various methods which help the
organization in assessing the accurate performance of their employees towards the
organization. for measuring the performance of their employees, employer need to set
standard for performance which defines how they can improve performance of their
employees which will be exceed from the expectations of the organization. So, there are
various methods and techniques which are using by the organization for measuring the
performance of their employees and these methods may be vary as per the working
environment of the organization, type of their business and occupations of their employees
(Choong, 2014). These methods are as of the following:
1. Graphic Rating Scale – It is the one of the methods which is using by the
organization for measuring the performance of their employees towards the
organization. This method is one of the most common methods, which are used by
every organization for performance measurement. By this method, an employer or
evaluator indicated on the rating scale where they give rate the performance of their
employees. Organization is using five to seven point rating scale which helps them
in evaluating knowledge of their employees about their job responsibility and task,
which is allocated to them by them, it also help the company to evaluate the

Essay on performance management 4
responsibility of their employees towards their tasks, in what extent they complete
their task and quality of their work. This method which is used by the organization
for measuring the performance is simple, quick to implement and time consuming
method. Company has to ensure that they evaluate the performance of their all
employees consistently and objectively (Valmohammadi and Servati, 2011).
2. Management by Objectives – This is another method which are used by the
company for measuring the performance of the employees and its overall
performance. This method includes outlining the priorities for the management then
measuring the result of those goals which are set by the organization. Firstly,
management identify the objectives then they have to work with their employees
and taking various steps which are essential for achieving its objectives and goals.
At the end of the period of evaluation of performance management, employers
review the performance of their employees and measure their performance on the
basis of ability of employees to achieve the given task within appropriate time. This
method is mostly used by the business which is based on the projects for
measuring the performance of their employees as well as their overall performance
(Choong, 2013).
3. Forced Ranking of Employees – This is another method which is used by the
organization for measuring the performance. As per this method, manager measure
the performance of the employees by comparing its performance with its peers. It
helps the organization in identifying the best performer as well as worst performer
and effective employee or least effective employee. This method is used by the
organization to retain the employee who highly contributes to the productivity of the
organization. This method resulted in improving overall performance, competitive
working environment and lack of team work management (Seidel, 2019).
Hence, performance management is an important tool for every organization which helps
them in increasing their performance and achieving its goals and objectives and it is one of
the important practices of human resource management. It helps the organization in
various ways as creating value to the organization, enhancing performance of their
employees, high employee empowerment and creating strategies for the development of
the organization. There are various components of performance management system
which help the organization to increase their efficiency and enhance their performance and
productivity such as involvement of management, performance planning, performance
appraisals and reviewing, giving feedback to their employees regarding their performance,

Essay on performance management 5
rewarding and recognizing good performer of organization, plans for performance
improvements and potential appraisals. Organization can measure performance of their
employees by various methods such as graphic rating scale, forced raking and
management by objectives. So, performance management helps the organization in
improving the performance of their employees as well as overall performance of the
organization.

Essay on performance management 6
References –
Seidel, M. (2019) The three types of methods used to measure performance [Online]. Available
from: https://smallbusiness.chron.com/three-types-methods-used-measure-performance-
23612.html [Accessed 24/04/2019]
Schlafke, M., Silvi, R. and Moller, K. (2012) A framework for business analytics in
performance management. International Journal of Productivity and Performance
Management, 62(1), pp.110-122.
Brudan, A. (2010) Rediscovering performance management systems, learning and integration.
Measuring Business Excellence. 14(1), pp.109-123.
Kagaari, J., Munene, J. and Ntayi, J. (2010) Performance management practices, employee
attitudes and managed performance. International Journal of Educational Management, 24(6),
pp.507-530.
Fryer, K., Antony, J. and Ogden, S. (2009) Performance management in the public sector.
International Journal of Public Sector Management, 22(6), pp.478-498.
Blahova, M., Palka, P. and Haghirian, P. (2017) Remastering contemporary enterprise
performance management systems. Measuring Business Excellence, 21(3), pp.250-260.
Canonico, P., Nito, E., Esposito, V., Martinez, M., Mercurio, L. and Pezzillo, M. (2015) The
boundaries of a performance management system between learning and control. Measuring
Business Excellence, 19(3), pp.7-21.
Choong, K. (2014) The fundamentals of performance measurement systems: A systematic
approach to theory and a research agenda. International Journal of Productivity and
Performance, 63(7), pp.879-922.
Valmohammadi, C. and Servati, A. (2011) Performance measurement system implementation
using Balanced Scorecard and statistical methods. International Journal of Productivity and
Performance Management, 60(5), pp.493-511.
Choong, K. (2013) Understanding the features of performance measurement system: a literature
review. Measuring Business Excellence, 17(4), pp.102-121.

Essay on performance management 7
Barth, A. and Beer, W. (2017) Performance Management Success: A Best Practices and
Implementation Guide for Leaders and Managers of all organizations. Switzerland: Springer
International Publishing.
Ashdown, L. (2018) Performance Management: A Practical Introduction. United Kingdom:
Kogan Page.