Although it is a concept that has commanded attention from the management world over the past twenty years, and has contributed to the efficiency and effectiveness of numerous organisations, yet performance measurement remains a critical and much debated issue. Most of the criticisms are directed to the performance appraisal process. Some call it useless and some even said it makes organisations worst (Bacal 1994, Deming 1986). However, these arguments against performance management were made a long time ago, with some more than twenty years ago. With the advance in technology and globalisation, who is to say that performance management has not improved? In the later chapters, we will take a look at the evolution of performance management to find out its beginnings and influences from earlier management theories. Through this essay, we will discover that performance management today is not just about appraisals, but is a developing process that serves to facilitate communication, efficiency, effectiveness and attaining both long and short-term goals.
According to Bacal (1999), performance management is a continuous communication process between employees and managers to develop a clear understanding of aligning organisational goals with personal efforts to improve both employees’ and organisation’s performance. To understand how this works, Lucas et al (2006) broke down the process into three parts: objective-setting, performing and developing, and performance review. Several activities are conducted for each part of the process, it is important that all parts are carried out for the process to be effective. Figure 1.1 presents the critical parts and activities of the performance management process. Figure 1.1 Performance Management Process, Adapted from Lucas et al (2006).
The first part of the performance management process is objective-setting. In this part of the process, there are two fundamentals that employees...