The concept of performance management was first used by Beer and Ruh in 1976. After 1980s the concept began to gain importance and all the performance management systems that were developed hastily began to give poor results in organizations and there was a need for strong development of management of merit rated performance systems in order to establish the efficient functioning of organisations.The definition of performance management can be explained as a strategic and integrated process that delivers success to organizations by providing a way for improvisation of the people who work and also encouraging the workforce to increase capabilities to contribute to the fullest through individual performance and through work teams. As described by Christ Bones (1996) in United Distillers, performance management is driven by vision and strategic imperatives. Performance management is integrated in two ways (1) vertical integration, linking or aligning business, team and individual objectives with core competencies (2) horizontal integration linking different aspects of human resource management, organizational development, human resource development in order to extend a coherent approach to the management and development of people.
Bates and Holton (1995) have identified ‘performance’ as a multi-dimensional contruct, the measurement of which varies depending on various factors. Kane(1996) have stated that performance is something that the person leaves behind and that exists apart from the purpose’ . According to Brumbrach (1988) performance means both behaviors and results. Behaviors emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviors are also outcomes in their own right – the product of mental and physical effort applied to tass – can be judged apart from the results. The above definition of performance gives a conclusion that in assessing the performance of teams and individuals both inputs (behaviors) and outputs (results) which is called as ‘mixed model’ according to Hartle (1995) of performance management.
Performance management is based on set of objectives, knowledge, skill and capability requirements, performance improvement and personal development plans. According to Fowler (1990) performance management is about managing an organization, as a natural process of management and it cannot be considered neither as a system nor a technique. Performance management is also well within the context of business which includes both external and internal environment.As a conceptual model, performance management system (PMS) by Bevan and Thomson (1991) exhibits the following features: It has a shared vision of objectives, or a mission statement, which is communicated to all its employees. It sets individual performance targets, which are related to both operating unit and wider organizational objectives. It conducts regular, formal reviews of progress towards these targets.
It uses the review process to identify training, development and reward outcomes. It evaluates the effectiveness of the whole process and its contribution to overall performance to allow changes and improvements to be made. Fletcher and Williams research suggested the following principles of effective performance management. It is owned and driven by line management and not by HR department. There is an emphasis on shared corporate goals and values.
Performance management is not a packaged solution but something that has to be developed specifically, and individually for each particular organization. It should apply to all staff, not just part of the managerial group. ? The entire working framework must be well within the corporate goals and values. As suggested by Vicky Wright and Liz Brading (1992) performance management need to be encouraged with a balanced approach with the following features: less focus on retrospective performance and assessment and more concentration on future performance planning and development identification and recognition of the skills and capabilities associated with higher levels of performance. identification and recognition of outputs that are defined in qualitative and not just quantitative terms.
a freer, upwardly managed process; a more coaching and counseling style of appraisal, with less emphasis on criticism; more focus on an individual’s contribution to the success of the team as a whole, with some objectives defined in these terms. concern for improving an individual’s performance as much as assessing it; no forced distribution of performance ratings.For every organization to suit it needs, a conceptual framework of performance management need to be developed as a guideline for managers to consider decision making as performance management is a continued process of renewing cycle. Some of the important activities of performance management are : ? Role definition – describes key result areas and capability requirements.Performance agreement – defines objectives to be achieved by individuals, ways of measuring performance and capabilities required to deliver required results. The framework for performance management is provided by the performance management development plan which is the results of performance planning.
There are too many key areas in performance management which require planning of a model, implementation of performance management plan and processing PMS as a regular cycle in an organisation. As Hope (1998) stated businesses should be value-driven and not cost-driven: ‘value-based management is a philosophy of improvement while cost-based management is a philosophy of control’.Also according to Hope (1998) it is important to understand what creates value in an organization and develop measures that are important to a business strategy with the fact that ‘every business has a unique proposition that defines what value it uniquely it delivers to its customers’. Job analysis is an important area in performance management to identify knowledge, skills and abilities.
(KSA) Job analysis is used for multiple purposes in order to fix compensation and for performance management. The following are the six basic techniques to collect information about a job.
