Performance Management

Introduction

Performance management is used to monitor and motivate employees to achieve organizational goals through their individual work (Dessler, Chhinzer, & Cole, 2014). Proper performance management begins with the definition of strategic goals and performance expectations, and a thorough job analysis. This provides the basis for which an employee can be evaluated. The evaluation, or feedback, is given to ensure that employees understand how they can improve (Dessler, Chhinzer, & Cole, 2014). It is the employee’s job to monitor and keep on track of each individual’s performance and ask for assistance when required.

There are many different formal appraisal methods, including the graphic rating scale, alternation ranking method, paired comparison method and the forced distribution method (Dessler, Chhinzer, & Cole, 2014). Performance reviews are a common tool used in each of these methods and involve a manager sitting down with employee to discuss their work; managers generally consider the achievement of individual performance goals and how the employee meets the defined standards during the meeting (Dessler, Chhinzer, & Cole, 2014).

There are many common issues in performance management, often with managerial problems and a lack of strategic forethought as the origin. With careful planning, performance management can be a major tool in aiding organizations both financially and in terms of employee satisfaction. Adobe is a major company who has undertook the redesign of performance management, with very successful results; their innovative process may illuminate a new idea that current academic literature has overlooked. Performance management can be an incredibly influential instrument for organizations, if a company is willing to put in the time and effort to overcome the limitations and consider the employee as the centre point of the system.

Limitations

An organization considering a performance management system will encounter many challenges that may limit successful implementation that should be considered in the design.

Performance reviews are particularly troublesome. Recent studies have shown that 70-80% of employees did not believe that their performance review helped them to improve personal performance (Leanne,2004). Managers are so busy with their work that they may overlook the efforts that their employees are making and write performance reviews inaccurately (Otley, 1999).  In addition, managers may not recall certain details about an employee’s performance when writing performance reviews (Otley, 1999). Furthermore, some managers may have some personal conflicts or misunderstandings with their employees, which may cause them to write biased reviews. These actions can lead to unfair reviews, discouraging employees who tend to be demoralized when faced with criticism (Otley, 1999).

In order to eliminate inconsistencies in the performance review process, frequent and effective coordination and communication between performance management members would help to ensure that the members have a consistent performance appraisal for each employee. Specifically, there should be routine meetings where all performance appraisers discuss the progress that the employees are making and the areas that need to be improved, and to figure out the best way to communicate the areas of improvement to the employees (Otley, 1999). This would also help to eliminate any forms of biases that certain managers may have against certain employees, because when the opinions and reviews of many people are compiled together, it is difficult for any kind of personal biases to stand out (Otley, 1999).

Three additional performance management issues stem from the poor selection of managers (Marrelli, 2011). Managers are essential to implementing any performance management systems properly. There are managers with weak communication or interpersonal skills to deal with conflicts amongst employees can result in poor performance as employees are unhappy to work as they might have grudge with their team member or deliberate cause problems to other co-worker affecting the whole organization in a whole. A survey shows 70% of employees feel poor performers are not handled properly, therefore they tend to perform not that productive as they might feel unsatisfied with the fact they work harder (Marrelli & Tsugawa,2009). Moreover, “62% of managers at all levels reported that they do more than their fair work because of coworkers.” (Marrelli & Tsugawa, 2009).

The third main reason for poor performance is that manager’s lacks personal courage to give employees with honest and constructive feedback in order for them to improve. “A recent study of federal employees showed that 60% of employees receive formal or informal feedback only monthly or less often whereas 31% of employees receive feedback of any kind just twice yearly or even less often” (Marrelli & Tsugawa, 2009).

Solution:

Some research conducted states that it's better to hire people who have already have strong communication and conflict management skills (Marrelli, 2011). Criteria can be set for selection of manager process, as firm can set their own selection test. For example, an organization can employ a management assessment centre to assess candidates’ management potential using realistic exercises. If he or she pass the test so will be a potential candidate for the manager and carry forward for further selection procedure.

One way to overcome the problem of accountability would be implementing a probationary period for both organization and manager because during this period, new managers need to prove themselves by performing well otherwise they will lose their position (Marrelli, 2011).As it provides new manager with a no fault escape option, it means any qualified individual could have a chance to try and prove themselves as much as they can to reach the best performance.

New managers can get learning opportunities if their superiors could share more experiences with them, providing them guidance and feedback. “Organizational practices that support accountability will also improve performance management”( Marrelli, 2011). Meeting with their employees regularly can be an effective way to create a dialogue between managers and employees. As for the manager, they can let the employees know their performance recently by giving the feedback and help them create a plan for improvement( Marrelli, 2011). At the same time, employees can come up with their questions, concerns and complaints about their career. Face to face communication is encouraged because it’s more clear and efficient.

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