Performance Management for HR: Essay on Key Components and Process

This essay examines performance management within the human resources context, emphasizing its critical role in aligning employee performance with organizational objectives. The introduction highlights the key components of a successful performance management process, including planning, appraisal, performance schemes, feedback, and rewards, and their interrelation. The essay delves into each component, explaining performance planning, appraisal methods, various performance schemes like management by objectives and 360-degree feedback, the importance of feedback and performance improvement strategies. It also discusses the significance of rewarding good performance for employee motivation and outlines a continuous improvement cycle. The essay concludes by stressing the importance of a well-designed and adaptable performance management system for organizational success, particularly in a changing business environment. The author uses the provided information to demonstrate their understanding of the subject.

Student’s Last Name 1
Performance Management by HR
By (Name)
Course
Professor
University
Date

Student’s Last Name 2
Introduction
The performance management process is a critical aspect for the human resources
department and it is considered important by organization leadership. The leadership of an
organization is tasked with giving the directions of the process while the human resource and
line managers oversee the process while managers implement the outcome. The
performance management process integrates the aspects of planning, management, legal
and human resources. A successful performance management process identifies key
components and includes them into the whole process. These components include planning,
performance appraisals, appraisal schemes, performance improvement, feedback and reward
phases. These components outline the steps that are to be taken to achieve a sustainable
performance management system. The ultimate objectives of this process are to align the
performance of an individual employee with that of the organization (Selden and Sowa, 2011,
pp.255). The process should outline the goals, expectations, and priorities of the organization
and how these contribute to the strategic objectives of the organization. The process is
however subjective to each individual employee as they cannot all react to it in the same
manner. It is, therefore, necessary for the organization to factor in the individual perceptions
of the employee and incorporates this into the components for effective development of a
holistic performance management process.
Performance planning.
Performance planning is one of the key components of the performance management
process. It is the basis of the whole performance appraisals. This process is conducted by the
employee and the line manager at the beginning of the performance management process. In
the performance planning phase, the employee can formulate targets and the key

Student’s Last Name 3
performance areas (Aggarwal and Thakur, 2013, pp.620). One critical factor to consider
during this phase is the behavior exhibited by the employee. Behaviors are important as they
show how an employee goes about in doing a particular task. If the performance process is
developed and implemented in the right way, it can ensure that the employees change
behaviors and achieve results that will enable the organization to achieve its strategic
objectives. For example, if an organization wants to improve customer service and
engagement, the organization should include customer service expectation and reward in the
performance process and this will communicate to the workforce its importance and also
shape the perception of the employees towards the realization of this objective.
Performance appraisal.
Performance appraisal is another key component of the performance management
process. This component is designed solely to improve the performance of the employee. It
articulates the standards, values, and the culture the employees are expected to display in
line with meeting the requirements of their allocated tasks (Bednall, Sanders and Runhaar,
2014, pp.50). The information gathered from performance appraisals forms the basis for
recruitment exercise, training, and development of the existing workforce, and properly
managing and rewarding the team. The key objectives of the appraisal process are;
assessing the employees over a period of time, provide feedback to the employee based on
their performance, reduce the gap between actual and desired performance, identify the
strength and weakness of each individual employee, and offer clarity as to the responsibilities
and the expectations of the employee in the upcoming appraisal process (Spekle and
Verbeeten, 2014, pp.140). The performance appraisal process is expected to result in
improved performance of the workforce based on the strategic objectives of the organization.
However, if this component is not properly regulated it can result in certain errors. Some of

Student’s Last Name 4
the errors include the generalization of the traits and the halo effect. In the generalization of
traits, for example, an employee might achieve a lower rating on a trait that they do not mostly
apply in their working environment. If the performance traits are reviewing the trait of
creativity, workers in the data entry department may receive lower ratings as their work does
not involve creativity. The halo effect manifests when the manager develops a general
impression of an employee based on observing one trait. This influences the judgment of the
manager and he uses the influence to generalize the overall performance of the employee
(Laumer, Maier and Eckhardt, 2015, pp.432). An effective performance appraisal should offer
guidance to the employees. It should be flexible to encourage adoptability and utilization of
the strengths of each individual employee. It should clearly outline the objectives of the
process and be reviewed in a panel to prevent its limitations.
Performance schemes.
There is a wide variety of schemes for performance management to choose from. The
scheme selected will highly influence the success or failure of the whole system. In choosing
the type of method to carry out the performance management process, the organization
leadership should consider the merits and demerits of each scheme and choose the most
appropriate one as per the needs of the organization. Some of the most used schemes
include graphical rating scales, management by objectives, self-appraisal, and 360-degree
feedback system (Campion, C, Campion, E and Campion, M, 2015, pp.91). Management by
objective assess the staffs on the criteria of goals and objectives set (Mir and Pinnington,
2014, pp.207). This scheme ensures that the goals of the organization are linked to each
department and the individual employee goals. In the review of the management by
objectives performance, the employees are evaluated as to whether they achieved or failed to
achieve the defined goals and objectives. Graphical rating scale uses a list of qualities or

Student’s Last Name 5
characteristics from which the employee is rated. The common scale involves a range from 1
to 5. The qualities to be rated include work outcome, teamwork, ability to learn new tasks,
employee behavior, and acceptance to change among others. Self-appraisal involves
completion of an assessment report by the employee on a range of questions involving their
work performance. It is usually carried out before the review process with the line manager.
The 360-degree appraisal system uses multiple sources feedback such as from the
customers, supplier, peers, supervisors, and other stakeholders (McCarthy and Garavan,
2001, pp.15). These feedbacks are then used for training and development of staff or for
other administrative functions such as promotions or pay rise.
Performance feedback.
Feedback is another key component of performance management system. It is in this
phase that the employee is advised on the areas that need improvement and whether the
employee is contributing to the actualization of the objectives set in the organization. The
employee in this phase receives open and transparent feedback after the review process and
areas for further development and training of the individual employee are identified. The
feedback phase also provides the criteria for mentoring and guiding the employee towards
overall competency and improved productivity.
Performance rewarding.
Rewarding good performance is a component that is vital for the motivation of the
workforce. During this phase in the appraisal process, the employee performance is
recognized and rewarded accordingly. This stage is very critical in the performance
management system as it has a direct influence on the morale, self-esteem and achievement
orientation of the workforce. By rewarding the high performing individuals, the organization

Student’s Last Name 6
makes them feel appreciated and recognized and this may make them increase their effort
(Zhu, Sarkis and Lai, 2013, pp.113). Additionally, rewards act as a challenge to those
underperforming, enabling them to put more effort to meet the objectives of the organization
in order for them to be recognized. Any contributions that have been recognized by the
organization help the employee to cope up with both success and failure.
Performance improvement.
Performance improvement is a component in which new set of goals and objectives
are developed and new deadline made for the continuation of the performance management
process. The managers clearly communicate to the workforce the areas that they are
expected to improve through the review process, and a deadline is set for the achievement of
the goals (DeNisi and Murphy, 2017, pp.421). An effective performance improvement plan
incorporates both the appraiser and the supervisor in the formulation of the new targets. This
process understands that performance management is not a onetime process but a
continuous process that has to be carried out often to set objectives in relation to the
advancement of the business operating environment.
Conclusion
The search for a perfect performance management system is continuous and it will go
on with the continuous development of management practices. However, the foregone
components stipulate the factors to consider when formulating an effective performance
management system or performance appraisal. The real measure of a performance
management system is whether the workforce feel motivated to become more productive
after the review process. The performance management review and feedback process offer

Student’s Last Name 7
key guidelines for the line managers and the employee, enabling them to get the best
alternatives in the performance management process. Additionally, in an environment of
constant and rapid change, the process should not be sidelined. The extent to which the
parties plan, implement, monitor and modify the system is an important factor for the future
success of any organization. Even during the period of stability in the organization,
spontaneous checks may be needed to ensure the team is not complacent. In relation to the
various components of the performance management system discussed, an efficient
performance management system can make a significant contribution to the success of any
organization.

Student’s Last Name 8
Bibliography
Aggarwal, A. and Thakur, G.S.M., 2013. Techniques of performance appraisal-a
review. International Journal of Engineering and Advanced Technology (IJEAT), 2(3), pp.617-
621.
Bednall, T.C., Sanders, K. and Runhaar, P., 2014. Stimulating informal learning activities
through perceptions of performance appraisal quality and human resource management
system strength: A two-wave study. Academy of Management Learning & Education, 13(1),
pp.45-61.
Campion, M.C., Campion, E.D. and Campion, M.A., 2015. Improvements in performance
management through the use of 360 feedback. Industrial and Organizational
Psychology, 8(1), pp.85-93.
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.
Laumer, S., Maier, C. and Eckhardt, A. 2015, "The impact of business process management
and applicant tracking systems on recruiting process performance: an empirical
study", Zeitschrift für Betriebswirtschaft, vol. 85, no. 4, pp. 421-453.
McCarthy, A.M. and Garavan, T.N. 2001, "360degrees] feedback process: performance,
improvement and employee career development", Journal of European Industrial
Training, vol. 25, no. 1, pp. 5-32.
Mir, F.A. and Pinnington, A.H., 2014. Exploring the value of project management: linking
project management performance and project success. International journal of project
management, 32(2), pp.202-217.

Student’s Last Name 9
Selden, S. and Sowa, J.E., 2011. Performance management and appraisal in human service
organizations: Management and staff perspectives. Public Personnel Management, 40(3),
pp.251-264.
Spekle, R.F. and Verbeeten, F.H., 2014. The use of performance measurement systems in
the public sector: Effects on performance. Management Accounting Research, 25(2), pp.131-
146.
Zhu, Q., Sarkis, J. and Lai, K.H., 2013. Institutional-based antecedents and performance
outcomes of internal and external green supply chain management practices. Journal of
Purchasing and Supply Management, 19(2), pp.106-117.