Approaches to Performance Management

Introduction

The primary objective of this paper is to bring about a discussion of performance management in the light of suitable theories and models. In this context, various elements concerning performance management would be taken into consideration. In the first section, the paper will talk about the various measurement techniques of performance management. Further, the paper will discuss the different models that have been proposed by eminent authors regarding performance management. Further sections will get shifted to various techniques of appraisal that are visible in the organizations of current days. Two essential methods of the appraisal will be elaborated in this segment, that is, goal setting technique and 360-degree feedback technique.

Discussion

Performance management

Performance management is defined as a set of corporate management tools, which are suitably applied by the managers to evaluate and monitor the working of the employees. The ultimate goal of the performance management program is to create a workplace where the individuals can perform skilfully to produce their best quality work. The first step in the performance management program is to create an overall vision for the organization as well as individual goals (Aarseth et al. 2017). Through this program, the management can supervise the work of the employees such that their performance aligns with the goals and objectives of the organization. Performance management also helps the managers to adjust the current structure of workflow and develop suitable strategic decisions for the betterment of the organization. Performance management is a critical determinant in the current business environment as it helps in creating a healthier and transparent work environment through constant accountability.

Measurement of job performance

Many research works have been conducted to find out the relationship between job performance and effectiveness in the result of this performance. According to some of the studies undertaken by Maroofi and Navidinya, a linkage can be established between task performance, contextual performance, and effectiveness. The authors studied a sample of approximately 600 employees to investigate this relationship (Marlow et al. 2018). The result displayed two essential attributes that suitably contribute to the effectiveness in the production of the employees. These two elements are paying attention to critical details and showcasing creativity and innovation in solving problems. These two elements are observed to enhance the productivity, quality, and innovation of the job performance of the employees. Along with these two elements, the education level of the employees, as well as their job experiences, also affects their job performances. These indicators segregate a high performer from a low performer.

Various models of performance management

Multiple authors and researchers have proposed several models, theories, and approaches to performance management in different organizations. Performance management varies from one organization to another and hence cannot be defined through a universally accepted model (Soltani and Wilkinson 2018). According to a paper written by Agarwal, has come up with a model in the form of a cycle of performance management. This cycle was firstly proposed by Mabey.

The cycle consists of five essential steps of the performance management system. The steps should occur in a cycle to ensure the effectiveness of the system (Odongo and Wang 2019). The first step is to set objectives, which would provide a guideline for the employees to perform in a particular way. The next step is to measure the performance of the employees to ensure its adherence to the laid down objectives. Suitable feedbacks should be taken after the measurement, and a reward system is to be introduced for rewarding the best performers. The final step is to amend the plans and programs according to the required observable changes.

Competency Approach to performance management

The current business environment is very competitive, and therefore, it is required for each organization to remain competitive in the surrounding environment. This can be done through the retention of competent employees. According to a paper written by Tripathi and Agrawal, a competency-based management program has been suitably applied in the organizational context. One of the essential models of competency is the KSA framework of competency (Osagie et al. 2016). This framework suitably defines the concept of competency through four different segments. These segments are a set of skills, detailed knowledge, attributes, and outstanding job performances. The skills define the capabilities of individuals to perform a particular task. The knowledge domain is the information related domain, and the characteristics relate to the qualitative aspects and personal traits of individuals. The last area talks about the compelling performances of workers about tasks and activities.

Techniques of appraisal

The performance appraisal system is a very crucial technique for measuring the efficiency and effectiveness of the performance of the employees. Performance appraisal helps in boosting the motivation and confidence of the dedicated and hard-working employees such that they can perform better in the future (Palacios-Marques et al. 2016). The performance appraisal methods might vary within organizations; however, specific standardized methods are followed by most of the organizations.

These methods have been studied extensively by Aggarwal and Thakur. There has been a transformation in the process of performance appraisal, and organizations have improvised modern methods to carry out this process. Some of these modern methods are management by objectives, BARS method, Human resource accounting, 360-degree, and 720-degree techniques (Pichler 2019). Along with these simplified techniques, there are also some other techniques, which have not gained much popularity in the organizations. Some of these techniques are balanced scorecard, behavioral observation scale, and paired comparison techniques.

Goal setting mechanisms

Goal setting mechanisms are utilized by the organizations as a part of their performance appraisal system. These mechanisms have emerged from the goal-setting theory, which was proposed by Edwin Locke during the 1960s. According to this theory, the organizations lay down individual objectives for the employees. These objectives are beneficial in building up a foundation for motivation among the employees (Pulakos et al. 2019). The employees aim their work in a particular direction and try to show improvement at every stage. Sometimes, employees might fail to achieve these goals. In such cases, the management takes the responsibility of modifying these goals to make them more practical and realistic. It has been observed that this modification helps in achieving the goals and objectives of the organization.

360-degree feedback

360-degree feedback is a prevalent method of performance appraisal, which is employed in many organizations. According to this technique, the performances of the employees are evaluated through multiple dimensions surrounding the entire environment of the organization (Raffoni et al. 2018). The feedback regarding the performance of the employees is taken from colleagues, superiors, subordinates. Sometimes, inputs are also collected from the customers, suppliers, or the family members of the employees. Information is taken based on the behavior and attitude of the particular employee while performing the allocated task.

Through this method, the management would get to know the employee intimately and would be aware of the actions of the employee. The effect of the activities of the employee on other members of the organization can also be judged through this technique (Schlüter et al. 2017). This will provide insights regarding the personality of the employee and would be useful in the process of his performance evaluation.

Conclusion

From the above paper, it can be concluded that performance management is a critical process, which helps in enhancing the competency of an organization in its surrounding business environment. The performances of the employees can be evaluated through this method, and high performers can be appraised accordingly. Suitable appraisal techniques can also be adopted by the management as summarized in this paper.

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