Performance Management: Review Processes, Failures, and Strategies

This report delves into the intricacies of performance review processes within organizations. It begins by outlining the core principles and methods, including the use of tools like Balanced Scorecard and 360-degree feedback. The report then critically examines the reasons behind the failure of these performance appraisal techniques, such as lack of top management support, rater bias, and lengthy paperwork. Furthermore, it proposes strategic improvements, including manager training, transparent appraisals, and aligning individual and organizational goals. The report also recommends implementing uniform evaluation processes and fostering open communication to enhance employee performance and organizational success. The content emphasizes on how to eliminate the gap between employee performance and organizational expectations. Finally, it emphasizes the importance of continuous evaluation and improvement in performance management practices.

Performance management
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Executive summary
The purpose of this report is to study different types of performance review processes and
principles implemented within an organization. Managers of an organization use tools like
Balanced Scorecard and 360-degree feedback to evaluate the performance of their organizations.
Furthermore, this paper will focus on the reasons why these performance appraisal techniques
can fail and how these processes can be improved strategically. Moreover, this paper will also
discuss some of the methods to eliminate the gap between employee performance and
organizational goals. Evaluation of the performances of the employees as well as the
organization is considered as to be vital for the desired growth of an organization throughout the
concerned market areas.
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Table of Contents
Introduction.................................................................................................................................................3
Performance review principles and processes..............................................................................................3
Reasons behind the failure of performance review......................................................................................4
Strategies to improve performance review processes..................................................................................6
Recommendations.......................................................................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
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Introduction
This paper will review the performance review principles and processes associated with the
concept of performance review. Performance review is conducted to increase the efficiency of
the employees of a firm. There are several methods used by the managers of companies to
evaluate and monitor the performance of their employees. Furthermore, this report will also
discuss the reasons why the processes of annual performance review fail and how they can be
strategically improved. Moreover, it will evaluate how the gap between the performance of the
employees and organizational expectations can be eliminated.
Performance review principles and processes
Employers and managers of an organization are responsible to plan, evaluate and monitor the
performance of their employees within an organization. This managerial action of continuous
evaluation of the performance of the employees is known as performance management. It is
conducted to improve organizational performance alongside improving the individual
performance of the employees. This practice also improves the performance of the line, strategic
and functional departments of the organization. It is a part of strategic human resource
management and performance appraisal processes and principles are an important component of
performance management. In the words of (Aguinis et al., 2011) managers continuously
communicate with both the employees and employers of the organizations to develop the
strategic objectives of the organization. The managers monitor the performance of their
employees with the help of performance management cycle. This cycle comprises of five stages;
planning, monitoring, developing, rating and performance appraisal. First, the managers develop
the organizational goals, which the employees of the organization have to follow. Then on an
individual level, the managers continuously monitor the performance of their employees. The
evaluation and monitoring are done with respect to some criteria set by the employees of an
organization. In this stage, the job competencies of the employees are evaluated as well as their
behavior.
Managers of a firm evaluate the efficiency and effectiveness of their employees and monitors
how their employees are going to achieve the organizational goals. They are responsible for the
personal and professional development of their employees. The final step of this cycle is
rewarding or performance appraisal or performance review. Individual performance of the
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employees is considered as a basic component of the success of an organization. The managers
are responsible to provide counseling and training sessions to the employees in order to develop
their professional skills. The main purpose of performance management is to increase the
efficiency and effectiveness of organizational performance. As per Arnaboldi et al., (2015)
performance review measures allow the managers to give essential feedback to their employees
so that they can improve their performance. Performance appraisal is a strategic tool to evaluate
the performance of the employees against individual parameters and provides a way to improve
the performance of these individual employees. There are several performance review methods
employed by the managers of firms. These methods include rating scales, Balanced Scorecard,
and behavioral rating scales. As per Pulakos et al., (2015) the rating scale is a numerical scale,
each number represents job performance criteria like dependability, initiatives, attitude etc. With
the help of this scale, the managers evaluate the performance of their employees.
Balanced Scorecard is a strategic performance management tool, which is used by the managers
to keep track of the performance of their employees. It provides feedback on four strategic
options of the organization such as financial, customers, business process, and learning and
innovation. As described by Linna et al., (2012) some of the other performance review methods
include 360-degree feedback, self-review, behaviorally based methods and peer review and
upward review. In 360-degree method information about the performance of the employees is
collected from many resources to cross-check the accuracy of the information. This method
increases the accountability of the employee and it is designed to promote understanding,
acceptance, and behavior in the organization. In peer review method, the performance review is
conducted by the peers rather than the managers. According to Van Dooren et al., (2015) a
manager might ask their employees to evaluate their performance themselves. A behaviorally
anchored rating scale is used to measure the effectiveness of the performance of the employees.
This scale consists of ratings from least effective to most effective. Occasionally, the employees
are asked to provide feedback on the management style of their managers, this review is known
as the upward review. Psychological appraisals focus on the future potential of the employees
rather than their past performances.
Reasons behind the failure of performance review
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There are several reasons behind the failure of these methods of performance review within an
organization. In the opinion of Mone and London, (2018) these reasons are lack of support from
top management, lack of standards to measure the performance of the employees, bias of the
managers who are responsible for rating their employees, long and tiring paperwork and
mismanagement of the rating program. Top managers of the organization might not be motivated
to establish an all-around performance review and rating system. They might feel that the
managers do not need to get their performance reviewed by others due to their position and level
of experience. Thus, the overall performance of the organization is affected. Knies et al., (2015)
critically evaluate the fact that lack of implementation of proper rating processes like 360-degree
feedback system also decreases the accuracy of the information collected about the performance
of a specific employee. This mentality of management increases the level of dissatisfaction
among the employees of lower positions. Therefore, the lack of structured performance
management process may be one of the primary reasons behind the failure of annual
performance review. Managers fail to provide an accurate response to their employees, due to an
absence of job-related standards. Sometimes the managers are inexperienced themselves to
provide any real feedback to their employees. Rater bias or favoritism of managers towards
specific employees also decreases the efficiency of the annual performance review conducted
within an organization. Partiality from the managers will demotivate the employees to participate
in these reviews and increases the level of disappointment among the employees of the
organization.
Paperwork related to annual performance appraisal is quite lengthy, which is another reason
behind the failure of annual appraisals. Lengthy paperwork of these reviews acts as a
demotivating factor among the management, thus decreasing the efficiency of the employees.
There are some other reasons which play an important role in decreasing the efficiency of these
reviews. These reasons are lack of training opportunities and lack of communication between the
managers and their employees within an organization. As stated by Buckingham and Goodall,
(2015), an absence of communication within the organization prevents managers to provide
accurate feedback about the performance of their employees. It ultimately decreases the
productivity and profitability of the organization, thus decreasing the efficiency of these reviews.
Generally, performance review methods include a top-to-down approach. The employees
working in the lower level position of the organization may feel neglected if they are not able to
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provide feedback about the performance of their managers. According to Shields et al., (2015)
the option of self-review and peer review is generally absent within the organization, thus the
managers are not to correctly identify the performance of their employees. Thus the true
performers of the organization might not get recognized and rewarded by the organization, which
is the main purpose of performance appraisal. They might get demotivated due to the fact that
there are no training opportunities available for them within the organization. This sense of
demotivation also leads to the failures of annual performance review processes performed within
an organization. According to (Taticchi e al., 2015) the process of the performance review is not
easy, as it requires a lot of communication between the employees and the managers, thus
making the purpose of performance review unsuccessful.
Strategies to improve performance review processes
The quality of performance review processes can be improved strategically in several ways. The
managers should be trained on how to conduct the performance review of their employees before
commencing the process. They must be trained to build a relationship with their employees and
the employees should be able to trust their managers. They should maintain a constant
communication with their employees to increase the effectiveness of the performance review
processes within the organization. The managers can develop an effective performance plan to
reduce the amount of time associated with the performance review. The plan must be clear and
must follow the principles of SMART goals. As mentioned by Gerrish, (2016) the top
performers of the organization should be identified and rewarded to increase the efficiency of
performance review process. The scope of improvement must be identified by the all of the
employees of the organization. Proper training opportunities must be provided to those whose
performance is average and below than average. These training sessions will allow these
employees of the organization to increase their personal and professional goals. These average
performers should be replaced by those who are performing at their best. It will increase the
productivity of the organization, thus increasing the effectiveness of the performance review
processes. Der Aalst et al., (2016) critically evaluates the fact that managers of a firm must
conduct a transparent appraisal without any bias to increase the level of satisfaction and reducing
the level of their concerns. As per Armstrong et al., (2015) developing a structured performance
review structure will increase efficiency and profitability of the organization. The extent of
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engagement of the employees can be increased by motivating them to participate in a
performance review activity conducted within the organization.
The current performance management system within the organization must be changed and it
must be streamlined. It should be done to minimize the amount of time and other resources
wasted on developing their performance management systems. It will decrease the amount of
paperwork associated with this process, thus reducing the level of complexities with it. Goetsch
and Davis, (2014) critically reflects the fact Organizational goals should be aligned with the
individualistic goals of the employees of a firm. The ratings can give the employees an aisle
information about precision, so this rating should also be streamlined. The employees must be
motivated to change the degree of their performance to increase the efficiency and effectiveness
of performance review processes. Managers and employers should be able to inspire their
employees to increase their efficiency and they must adopt a fair and objective plan to eliminate
any chance of rater bias. I the words of Hodge, (2018) a uniform evaluation process should be
implemented within the organization from the top-most level to the bottom level to increase the
level of satisfaction among the employees of a firm. Every employee of the firm should be able
to evaluate the performance of themselves and their peers. The employees must be able to
provide feedback about the performance of their managers. Their feedback should be used by the
managers to improve the level of their performance as well. The performance of the employees
must be improved on the basis of the primary goals of the organization.
Recommendations
The underperformance of the employees can be reduced by providing effective coaching and
counseling to them through Employee assistance programs. These employees must be counseled
so that they can deal with their family problems and other personal problems. In case these
programs do not yield any positive results, then some preventive measures should be taken. This
preventive method increase the amount of satisfaction among the employees of the organization.
The managers need to understand the capacities of the employees and they need to determine
their individual contribution towards the success of the organization. Sufficient training must be
provided to the employees so that they can develop their professional skills (Jenter and Kanaan,
2015). With the help of this training, the gap between their skills and organizational expectations
can be reduced. The coaching and counseling sessions will enable the employees of the
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organization to develop their strengths and eliminate their weaknesses. They should be able to
identify the opportunities to develop their career within the organization.
Conclusion
This paper concludes the performance review measures are considered to be a significant
component of performance management. Performance management is conducted by the line,
functional and strategic managers of a firm along with their human resource management. It is
conducted to increase the level of overall performance of the organization by increasing the level
of individual employees of the organization. However, performance management does not
involve only the techniques of performance appraisal. Furthermore, it can be concluded that
ineffective use of performance review techniques will lead to increase in dissatisfaction among
the employees of the organization. Moreover, it can be summarized the effectiveness of
performance review can be increased by providing effective training programs for their
employees.
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References
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