The continuous development improvement of human resource potential requires a successful performance system. Schermerhorn (1999, Pg. 250) defined Performance Management System as a system that ensures performance standards and objectives are set, that performance is regularly assessed for accomplishments and that actions are taken to improve performance potential in the future. The process of formally assessing someone’s work accomplishments and providing feedback is performance appraisal and it serves three basic purpose in maintenance of a quality workforce i.e.
a) To assess past performance which intended to let people know where they stand relative to performance objectives and standards.
b) To assess training and development needs. This intended to assist in their training and continued personal development.
c) To assess future potential for organizational and personal growth.
Other than the above, employers can ride on the performance appraisal event to provide feedback to the employees regarding his or her past performance and to help them to improve their job performance. This exercise also provides opportunity for employees to express their feelings about the job and to increase interpersonal communication. From this it can stimulate interest in self-development for the purpose of greater personal development. Beside, performance appraisal will produce a databank of information can be used for financial and non-financial rewards.
Performance management approaches are generally describe within the context of Managing By Objective (MBO) framework. MBO programs is an awareness that appraisal must be anchored to function like objective setting, communicate expected result, establish time frame and how to accomplish objective (Nankervis, Compton & McCarty, 1999, Pg. 399 – 400).
Within an MBO system the performance management process pertains to the management of individuals, begin with the assignment of individual objectives through the final, formal assessment process.
Employees today would like to clime the corporate ladder as fast they can. To prevent employees from job-hopping, companies should provide vistas for personal and professional growth. If people can accomplish their growth objectives with one employer over a long period of time, they will usually continue the same place. Employees will definitely seek greener pastures if they perceive the environment is restrictive. Especially when reviews are not fair, accurate and timely, they fail to reward star performers, fail to provide encouragement and guidance to borderline workers and fail to give proper feedback to whose work is substandard.
There is no question that there is a compelling surface logic for steps in a performance management system. And, the benefits and purposes cited for such a system are intuitively compelling, there are very few managers who would disagree with any of the functions or results supposedly associated with performance management. Keep in mind that while most agree with the concepts, few actually implement them. Why? Perhaps you can find some answers in this paper.
Performance Management System and Organizational Achievement In today’s global economy, the advantage of growth from employees’ performance is cleared. It is referred as “intangible performance”. Stock returns are closely correlated with “intangible performance”. Take for example how Bill Gates built a multibillion-dollar software empire and how McDonald created its fast food kingdom. Many businesses are going through the same kind of internal dialog about their assets, particularly in the global economy, firms with relative little invested in factories and other tangible assets.
To improve business performance, therefore, companies need tools that grow and manage their intangible assets. In this assignment we will discuss a few important issues when deciding and...