What is Performance Management?
Question:
Discuss about the Effect of performance appraisal in organizational.
Van Dooren et al. (2015) stated that the term performance management refers to regular identification of the goals and the ability of all the employees to meet the destined target. This process sis also considered to align the strategic objectives and priorities along with the resources available in the company. De Waal (2013) furthermore depicted that performance management also illustrates the procedure in which an effective work environment is been created so that the employees can outperform. Rolstadas (2012) also supported that performance management is a continuous process and the managing authorities should give constructive feedback whose performance is evaluated.
There are several benefits and role that performance management plays within the organization. These are- enhancements in the employee motivation, effective bonding of managers with their subordinates, increased self-esteem, clarified job details, sound development in the productivity, fair administrative actions, more understandability of the organizational goals, minimized employee misconduct and most importantly employee retention (Hvidman & Andersen, 2013). De Waal (2013) furthermore depicted that evaluating the performance of an employee after certain interval of time, allow the managers to identify the productive employee and their potential to perform the challenging job roles and responsibilities. The evaluation process also allows higher managers to know about their subordinates more and it furthermore helps in developing an effective interpersonal relation among them. Aguinis (2013) also highlighted that performance management not only create opportunity for the productive members but it also identify the whether or not anyone need training so that their performance can be enhanced. Another role that performance management plays are that employees get better image of the organizational goals and objectives as based on the achievement of these objectives, there performance is evaluated. Aguinis (2013) also stated that setting the criteria for measuring the performance also results in more transparent organizational policies that boosts employee satisfaction. This evaluation of performance also comes with reward and the employee, who outperforms are rewarded with financial and non-financial rewards. Thus, Van Dooren et al. (2015) portrays that performance management develop the competencies among the employees and enhance their overall productivity that on the other hand results in more profitability for the organization. The most important role of the performance management is to facilitate organizational change. This means that on implementing changes in the existing organizational system, it is easier to assess employee, who can sustain changes and adapts the changing regulations and processes. Training are provided to the employees and other staffs but those, who can perform good and sustain with all the changes, the organization will also give them fair change to grow.
I have been working in Andalus Retail Outlet for the last one year and their performance management practices are based on three aspects- customer service orientation, decision-making ability and analysis and problem-solving approaches. In the customer service orientation, the organization directly identifies the working system of human resource management. Andalus Retail Outlet intends to attract more customers and thus, there first priority is to judge how an employee helps in attracting more customers. I always behave good with customers and help those, who faces difficulty in finding their desired products and while make payments. I also help other staffs in their work so that we can collaboratively complete the desired work. The second measurement of the performance management is ability of decision making. In this aspect, I always prefer customer help first prior than my job roles and responsibility. Once an elderly person was facing problem in taking all the purchased items to his car and I have helped by asking other staff to manage my desk. My company also praised me and rewarded me a complementary day off as I valued customer irrespective of their age and the amount they spent on purchasing our products. The third aspects based on which Andalus Retail Outlet evaluate the performance is “Analysis and problem-solving”. In this aspect, employee conflicts are the most common case. However I have taken initiative for resolving the conflict by taking employee’s perception from both the end and then discuss the matter in presence of all the employees so that a mutual decision can be taken. As an employee, I have to ensure the effectiveness of the organizational environment and thus, I always participate in these additional activities. These dimensions are incorporated in the performance appraisals that are conducted by the concerned organization every after six month.
Benefits and Role of Performance Management in an Organization
Aguinis (2013) stated that performance appraisal is the detailed description of the strength and weakness of an employee. It is been evaluated whether or not all the employees have obtained the desired organizational goals and objectives along with the extra initiative that they have taken to highlighted them among others. This evaluation of the performance also allows the employee to judger their ability and their achievements and the areas of the improvement that they can incorporate. The process of the performance appraisal is usually comprises of four main steps-
Formulating a separate file for each employee- Bernardin and Wiatrowski (2013) stated that managers along with human resources department develop a spreadsheet, where they distinguish some important aspects like goal sheet for highlighting the mandatory objectives of the organizational performance attributes and evaluation sheets for discussing aspects that is not related with the work but with the improvement of the organizational environment.
Provide constructive feedback- Dusterhoff et al. (2014) stated that though the appraisals are conducted every after six month but the managing authorities are evaluating the performance of an employee monthly wise. Thus, in order to provide encouragement or motivation to the employee, these managers are liable to give positive and constructive feedback. This will not only helps in developing an effective interpersonal relationship among the higher designated people and subordinates but it also enhances the communication system in the organization. Espinilla et al. (2013) highlighted that a performance management starts with employee planning and the evaluation of employee progress is the last process. Managers thus listen to discuss the planning and goals and give them productive feedback.
Management by objectives- In this process, the performance of the employee is judged base on how an employee define their goals and take appropriate steps to achieve each goal. The management should track progress or redefine the goal if they think some improvement can be made.
Conducting appraisals meetings- Aguinis (2013) stated that in this process, the spreadsheet has been filled up by the employee. They have to rate themselves for each defined goals and objectives. There is a place where the appraiser also rates them and stated whether or not they have agreed or disagreed on the things that an employee mentioned in the goals sheets. Rolstadas (2012) furthermore highlighted that in this process all the higher managing authority are present and they listen to the statement claimed by the employee and they give feedback to the employees so that they can improve in future.
Gupta and Kumar (2012) depicted that the main criteria to conduct a performance appraisal is to eliminate behavior and work-quality problems along with motivating the employees to contribute more. Some of the benefits of the performance appraisal process are-
Improved communication- Tuytens and Devos (2012) stated that through performance appraisal process, problem of lack of communication can be overcome. The primary reason is that all the leading management people are present in the appraisal meeting and they discuss about the positive and downturns of the performance of the employee. Employee will also get a chance to share their concerned directly with the managers and share their plan for their working approach along with some suggestions through which the productivity can be enhanced.
Measuring Performance Management
Detailed career path- The appraisals are conducted mainly to discuss whether or not an employee is able to fulfill the organizational goals and objectives. Deepa et al. (2014) also stated that through this meeting, long-term goals are also been discussed. The rating that is given by the employee as well as the appraiser based on a particular accomplishment of goals and objectives, the decision making ability of that employee is enhanced. DeNisi and Smith (2014) highlighted the reason that is an employee then evaluate the required approaches that could be taken for obtaining the desired goals.
Enhancing the productivity of the employees- Tuytens and Devos (2012) stated that performance appraisals are conducted for highlighting the areas that need improvements. This sometimes ends with effective employee training if they have the potential to develop.
In the appraisal meeting in Andalus Retail Outlet, discussion on my performance during the high time of customers like in festive season. I also have to tell about my performance under pressure, work determination and developing others along with the communication skills with staffs embers and customers. My manager gave me the feedback that my performance is good but I have to improve myself in taking some initiative that can highlight me in front of managers. These initiatives can be conducting session to the new joiners so that they can easily understand the working process or communicate with managers regarding some drawback of the organizational environment. Thus, I have gained the confidence to share my concern with the management and their positive feedback allows me to identify my strengths and areas where I can improve.
Aguinis (2013) stated that an organization cannot obtain long-term success without the existence of a well-defined program for performance management. Mulvaney et al. (2012) depicted that every employee desire to perform some challenging job roles and responsibility after spending sometime in the organization. Lunenburg (2012) moreover stated that this also motivate an employee to retain in the organization. Thus, if there is no well-defined program for performance management, employees may quit due to the unfair result as it is not possible to identify the ability of an employee without evaluating their performance. Another disadvantage is that without performance appraisals, a manager cannot comment or review the performance of an employee and this also leads to improper perception regarding an employee. In this way, employee may lose their self-esteem and their productivity may fall. Aguinis (2013) furthermore highlighted that if an organization do not have a well-defined program for performance management, the resources may get wasted as company invests a proportion of amount in maintaining the requirement of their employee and these employees quit after sometime. This will hamper the overall productivity of the organization. The organization again has to invest financial resources in conducting recruitment process along with time. Lunenburg (2012) also stated that without defined performance management, an employee always remain confused concerning the organizational goals. This means that they are not aware based on what factors their performance will be judged. They will also be confused in prioritizing the job roles so that they can attain the job responsibility more effectively.
Performance Appraisal
One of the examples that is mentioned in the article shows that due to the presence of no well defined program for performance management, it results in low quality of productivity. The organization that is considered in the case study is Omega Inc. and for improving the performance of the sales representatives, the organization conducted a training program for their sales staffs after conducted a job analysis. The managers are then set franchise-wide mission statement and performance goals. These goals are not discussed by the employees and their performance was judged which is followed by employee’s ranking according to the sales quota. The disadvantage in this process is that the employee does not aware of the conditions and guidelines of this quota and hence they considered the ranking of their performance as unfair. The adverse effect is found when in order to enhance their ranking in the organizational process, staffs started to deliver low quality services. This process though enhances the sales in the first couple of months but due to unsatisfied customers, the overall productivity gets lowered. Thus, it can be stated that not only an organization should have a well establish performance management regulations but regular communication with the employees regarding the performance measures should also be obtained.
Reference List
Aguinis, H. (2013). Performance management (3rd ed.). Upper Saddle River, NJ: Prentice Hall.
Bernardin, H. J., & Wiatrowski, M. (2013). Performance appraisal. Psychology and Policing, 257.
De Waal, A. (2013). Strategic Performance Management: A managerial and behavioral approach. Palgrave Macmillan.
Deepa, E., Palaniswamy, R., & Kuppusamy, S. (2014). Effect of performance appraisal system in organizational commitment, job satisfaction and productivity. Journal of Contemporary Management Research, 8(1), 72.
DeNisi, A., & Smith, C. E. (2014). Performance appraisal, performance management, and firm-level performance: a review, a proposed model, and new directions for future research. Academy of Management Annals, 8(1), 127-179.
Dusterhoff, C., Cunningham, J. B., & MacGregor, J. N. (2014). The effects of performance rating, leader–member exchange, perceived utility, and organizational justice on performance appraisal satisfaction: Applying a moral judgment perspective. Journal of Business Ethics, 119(2), 265-273.
Espinilla, M., de Andrés, R., Martínez, F. J., & Martínez, L. (2013). A 360-degree performance appraisal model dealing with heterogeneous information and dependent criteria. Information Sciences, 222, 459-471.
Gupta, V., & Kumar, S. (2012). Impact of performance appraisal justice on employee engagement: a study of Indian professionals. Employee Relations, 35(1), 61-78.
Hvidman, U., & Andersen, S. C. (2013). Impact of performance management in public and private organizations. Journal of Public Administration Research and Theory, 24(1), 35-58.
Lunenburg, F. C. (2012). Performance appraisal: Methods and rating errors. International journal of scholarly academic intellectual diversity, 14(1), 1-9.
Mulvaney, M. A., McKinney, W. R., & Grodsky, R. (2012). The development of a pay-for-performance appraisal system for municipal agencies: A case study. Public Personnel Management, 41(3), 505-533.
Rolstadås, A. (Ed.). (2012). Performance management: A business process benchmarking approach. Springer Science & Business Media.
Tuytens, M., & Devos, G. (2012). Importance of system and leadership in performance appraisal. Personnel Review, 41(6), 756-776.
Van Dooren, W., Bouckaert, G., & Halligan, J. (2015). Performance management in the public sector. Routledge.
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