Performance Management

The development of Human Resource Management (HRM) represents a significant evolution from earlier notions of personnel management. While all concepts focus on managing employees within an organization, HRM has a broader and more strategic approach that recognizes the importance of human capital in achieving organizational goals.

This is very importance for Sri Lankan industry as well for the growth with the global contexts as a developing country and getting out from the current crisis situations.

Performance management is one of the main parts in the modern HRM concept.

Figure 1, source; (Kiron Aidhi, 2024)

What is Performance Management

According to Vulpen, (2024), Performance management is a set of processes and systems aimed at developing employees, so they perform their job to the best of their ability. The goal is to help employees build on skills that enable them to perform better in their roles, reach their potential, and boost their success while also accomplishing the strategic goals of the organization.

On most occasions, when people hear the words performance management, the fiscal year evaluation may be their first thought. However, an effective performance management process involves much more than just the annual evaluation (Kansas,2024).

Performance management can be mentioned as a tool which can be used by managers to monitor & evaluate an employee’s work.

The Performance Management Cycle

The performance management process is a cycle with series of five key steps. These steps are imperative, regardless of how often a review performance review (Lalwani, 2024).

Figure 2, source; (Lalwani,2024)

 

1.     Planning- Establishing and communicating employee goals.

• Goals can be disclosed in job descriptions and communicated employee.
• Performance management may assign percentages to each goal.

2.     Monitoring- Monitoring employees' performance.

• Continuous performance management is crucial.
• Performance management could be monitor in measurable methods.

3.     Developing- Using data from monitoring to improve employee performance.

• Suggest the requirements needs, which effects to narrow down the competency  gaps.

4.     Rating- Regular performance evaluations to identify performance state.

• Necessary changes can be implemented.
• Ratings should provide with collective understanding & agreement (360^o feedback) of both employee and manager.

5.     Rewarding- Recognizing & rewarding good performances

• This can be a praise and recognition, a raise in salary, or a promotion

 

Importance of Performance Management

As Performance Management plays a crucial role in a business, key importance's can be point out as below.

• Employee efforts alignment with organizational goals
• Improve productivity
• Employee development
• Recognition and rewards
• Training needs identification
• Develop fairness and transparency in the workplace
• Enhance employee engagement
• Identifications of future leaders

Best Practices in Performance Management Process

According to the research study of (Betterworks, 2022), 21% of employees say their goals are set annually and never looked at again, while 16% say they do not set any goals.1 in 10 employees claim they rarely or never receive this type of feedback.

Therefore, it’s important to establish Performance Management process in correct practices to sustain and get benefits.

Below points can be status as the best practises in performance mangement (Vulpen,2024).

1. Evaluate what currently is and isn’t working
2. Choose the right approach
3. Meet & train managers
4. Set SMART goals
5. Apply continuous performance management
6. Set up a formal system
7. Help workers create employee development plans
8. Employ technology

Conclusion

Performance Management is one of the key areas which has come into discussion with the modern Human Resource Management concepts. This could play a vital role in an organization to achieve the organizational goals and much needed for the strategic management. But the important thing is the well establishment of the effective performance management system with the proper alignments.

 

References

Betterworks, 2022. The State of Performance Enablement - Global HR Reserch Report, s.l.: Betterwork.

Kansas, T. U. o., 2024. The University of Kansas. [Online]
Available at: https://humanresources.ku.edu/performance-management
[Accessed 17 03 2024].

Lalwani, P., 2024. Spiceworks. [Online]
Available at: https://www.spiceworks.com/hr/workforce-management/articles/what-is-performance-management/
[Accessed 18 March 2024].

Vulpen, E. v., 2024. AIHR Academy to Innovate HR. [Online]
Available at: https://www.aihr.com/blog/what-is-performance-management/
[Accessed 18 March 2024].