Performance Management benefits Organizations and their Employees

Viewpoint

Performance management benefits
organizations and their employees

C.K. Sahoo and Sukanta Mishra

C.K. Sahoo is Associate P erformance management is a continuous process of managing the performances of
Professor at the School of people to get desired results. High-performing organizations require effective
Management, National performance-management systems to promote and develop the values, principles
Institute of Technology, and competencies needed to sustain optimal outcomes.
Rurkela, India.
Sukanta Mishra is Research Performance management encompasses activities such as joint goal-setting, continuous
Scholar at the Department progress review and frequent communication, feedback and coaching for improved
of Business Administration, performance, implementation of employee-development programs and rewarding
North Orissa University, achievements. It can be regarded as a systematic process by which the overall
Baripada, India. performance of an organization can be improved by improving the performance of
individuals within a team framework (Drumm, 2005).

It is a means for promoting a superior-performing workforce by emphasizing job
descriptions, identifying a performance-improvement plan and establishing a 360-degree
feedback mechanism within a competence framework.

The importance of job descriptions

An employee’s job description is integral to the development of his or her employee-
development plan. Job descriptions establish a base so that an employee can clearly
understand what he or she needs to develop personally, and contribute to the organization.

Job descriptions provide an opportunity to communicate clearly about the direction the
company is taking, tell employees where they fit into the big picture, and set clear
expectations of what is expected of them.

The components of performance management

Performance management is the process of creating a work environment in which people
can perform to the best of their abilities. It is a whole work system that begins when a job is
defined as needed and expectations are clearly communicated to the employee (Den
Hartog et al., 2004).

A performance-management system includes:

B a clear job description;

B an appropriate selection process;
B accomplishment-based performance standards, outcomes, and measures;

B effective orientation, education and training;
B coaching and feedback;

B periodic performance-development discussions; and
B an effective compensation and recognition system.

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Employee-improvement plans
Most organizations have spent insufficient time establishing goals and measurements for
employee performance. Performance reviews are an inadequate reflection of an employee’s
work. They rarely focus on achievements related to measurable goals. They tend to focus on
most recent performance and ignore the contributions an employee makes all year long.
They can lack objectivity. Managers rarely seek feedback from other managers and
colleagues about an employee’s performance.

The performance-improvement plan (PIP) is designed to facilitate constructive discussion
between a staff member and his or her supervisor and to clarify the work performance to
be improved. In all cases, it is recommended that the supervisor’s boss and the
human-resources department review the plan. This will help to ensure consistent and fair
treatment of employees across the company (Heinen and O’Neill, 2004). The supervisor
will monitor and provide feedback to the employee regarding his or her performance in
the PIP.

The supervisor should review the following items with the employee:

B the performance level that the employee should consistently maintain;
B the support and resources that will be provided to help the employee;
B the plan for providing feedback to the employee;
B the possible consequences if performance standards are not met; and
B sources of additional information, such as the employee handbook and standing orders.

The 360-degree feedback mechanism
A well managed and well integrated 360-degree feedback processes provides good quality
feedback from colleagues and supervisors, which can be a definite improvement over
feedback from a single individual. Multi-rater feedback makes team members more
accountable to each other.

Systems of 360-degree feedback provide one of the best methods for understanding
personal and organizational developmental needs. Additionally, many employees feel that
360-degree feedback is more accurate, more reflective of their performance and more
validating than feedback from the supervisor alone.

When feedback comes from a number of individuals in various jobs, discrimination because
of race, age, gender and so on, can be reduced. Moreover, 360-degree feedback can
provide comprehensive information about organizational training needs.

A high-performing workforce
One key factor in employee motivation and retention is the opportunity for employees to
develop job and career-enhancing skills (Den Hartog and Verburg, 2004). This
opportunity to continue to grow through training and development is among the most
important factors in employee motivation. In today’s competitive business environment,
organizations must pay attention to the following aspects of developing a superior,
high-performing workforce:

B create a documented, systematic hiring process;
B provide the direction and management needed to align the interests of the

high-performing workforce with the organization’s goals and desired outcomes;
B hold quarterly performance-development planning meetings that align direction,

measurements and goals;
B give regular feedback;

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B develop a recognition system that rewards and recognizes people for real contributions;
and

B provide training, education and development to build a superior, high-performing
workforce.

Effective management of performance is a source of sustainable competitive advantage. For
a firm to achieve this, the performance-management system must be used not just as an
evaluation and documentation tool but also as a strategic tool. In this way, there will be a
holistic analysis of performance at organizational, process and individual levels for
individual satisfaction, commitment and goal attainment.
References
Den Hartog, D. and Verburg, R. (2004), ‘‘High-performance work systems, organizational culture and
firm effectiveness’’, Human Resource Management Journal, Vol. 14 No. 1, pp. 55-78.
Den Hartog, D., Boselie, P. and Paauwe, J. (2004), ‘‘Performance management: a model and research
agenda’’, Applied Psychology: An International Review, Vol. 53 No. 4, pp. 556-69.
Drumm, G. (2005), ‘‘Putting the pieces back together to realign performance in the organization’’,
Performance Improvement, Vol. 44 No. 6, pp. 26-30.
Heinen, J.S. and O’Neill, C. (2004), ‘‘Managing talent to maximize performance’’, Employment Relations
Today, Vol. 31 No. 2, pp. 67-82.
About the authors
Dr C.K. Sahoo, an Associate Professor in the School of Management of the National Institute
of Technology, Rourkela, India, has published more than 40 papers on various aspects of
human resource management and industrial relations. His specialisms are employee
empowerment and involvement, competency mapping, the management of redundancy,
rehabilitation and resettlement. C.K. Sahoo is the corresponding author and can be
contacted at: [email protected]
Sukanta Mishra is a Research Scholar (Commerce and Management) at North Orissa
University, Baripada, Odisha, India. His areas of interest are human-resource management
and performance management.

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