Performance Management

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Title: Performance Management Concepts and Principles
Word Count: 2,196

Table of Contents
1.0 Introduction3
2.0 Findings4
2.1 Why Performance Management?4
2.2Tesco PLC & HMRC Performance Management Systems4
2.3Contextual Factors8
2.4 Learning and Development9
2.5 Talent Management10
2.6 Organisational culture11
2.7 The External Environment13
3.0 CONCLUSION 15 4.0 REFERENCES 16

1.0 Introduction
According to Armstrong and Baron (1998), Performance Management is both a strategic and an integrated approach to delivering successful results in organisations by improving the performance and developing the capabilities of teams and individuals.

This report will review and evaluate the concepts and principles of performance management, discussing the system of Tesco PLC in comparison to HM Revenue & Customs.

Tesco is a British-based international grocery and general merchandising retail group operating 331 stores across 14 countries, employing 470,000 people, and in 2009 generated £59.4bn in sales. Tesco is the largest private sector employer in the United Kingdom, and is currently the third largest global retailer based on revenue and the second largest based on profit. (Marr, 2009)

The employees of HM Revenue & Customs work to ensure the correct tax is paid at the right time, whether this relates to payment of taxes received by the department or entitlement to benefits paid. With 71,000 employees, around £436 billion revenue, and around 33 million customers, HMRC are responsible for the collection of direct taxes including income tax, corporation and environmental taxes. (HMRC, 2012) 183

2.0 Findings
2.1 Why Performance Management?
A good performance management system enables the organization to understand how its employees are currently performing, and to identify those employees that contribute most, or least. It enables the organization to assess the training needs of its employees and set development plans. From the employee’s perspective, the performance management process provides transparency over performance in the work place, provides a framework for documenting issues relating to performance, and can be used to assess future developments. (CIPD, 2012) The CIPD suggests that a good performance management system will benefit the whole organization. Tesco PLC uses an impressive performance management system, which is reflected in their 15.1% growth in annual sales and a 5.5% growth in profits, even during the global recession. (Marr, 2009) HMRC uses a different performance management system in order to drive collection activity for government needs.

2.2 Tesco PLC & HMRC Performance Management Systems When Sir Terry Leahy joined Tesco as their chief executive, he made it clear that the organization needed a clear direction in order to deliver on its strategy and growth. Tesco decided to put in place the Corporate Steering Wheel, with one main purpose; to help steer the organization to success. (Marr, 2009)

Figure 1. Tesco’s Corporate Steering Wheel (Marr, 2009)

Guest (1996) cited in Armstrong, (2009, p.31) believes that ‘performance is about outcomes, but that the concept should be linked to the idea of a balanced scorecard’. Tesco PLC demonstrates this with The Corporate Steering Wheel, including 20 corporate objectives from 5 perspectives. Tesco’s CEO expresses, ‘Having objectives across these five perspectives allows Tesco to be balanced in its approach to performance’.

Figure 2. HMRC Performance Management System (ACAS, 2010)

HMRC do...
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