Performance management is a process, which supports employee engagement and where an employee’s work reflects organisational goals. It is about achieving results through individuals and teams to improve the performance of the organisation (Armstrong, 2009). The outcome of performance management is visible through financial performance, productivity, quality of the product and service, customer satisfaction, employee engagement and talent retention. Performance management offers competitive advantage and brings positive benefits including increased profits, higher cash flow, and stronger stock value. Productivity is lower if performance management is not present (Maley, 2012). ...view middle of the document...
While performance appraisal play an important role in improvement of the organisational performance, which is a priority for most of organisations, there are several critiques around the way performance appraisals are managed (Toppo & Prusty, 2012). Despite performance appraisal being classed as one of the main elements of performance management its effectiveness is not easy to define and problems can develop from the design of appraisal, buy-in from management team as well as misunderstanding of the purpose, which is visible in organisation X. Managers and employees often believe that the purpose is personal development and reward calculation. Mismatch between those believes and real purpose tends to result in dissatisfaction, which in turn has a negative effect on effectives (Maley, 2012).
I will explore above points further by evaluating issues in a case study of the organisation X. This will be followed by recommendations on how to improve appraisal system and accordingly performance of the organisation.
In order to increase organisational performance businesses adopt high performance work practices (HPWP), which help to deliver business results. The widely accepted definition is that those work practices cover three categories: high employee involvement practices, human resource practices, and reward and commitment practices (DTI, 2006). Although the case study does not outline the full range of practices used by organisation X it demonstrates that the organisation is using appraisal system, which is one of the elements of human resource practices. For the business to be high performing organisation there need to be an effective way of using HPWP. However, there are already evident issues in approach to the appraisal in this organisation. Those include management buy-in, purpose of the appraisal and its link to the business objectives as well as the design of the appraisal.
As seen in case study there is a lack of commitment and support from management team. Simon did not commit to appraisal throughout the year believing that he knows his staff well enough to conduct appraisal without evidence. His lack of commitment could be a result of low support from senior management or inadequacy of the training offered to management.
Markus, 2004 emphasises that management commitment and leadership is a key to drive high performance. Worldatwork, 2010 adds that problems with performance management start when it is being viewed as “HR process” rather than as essential part of the business. This believes make performance management not effective. Often and as seen in organisation X managers see performance management process as a waste of time so they lack the commitment to it. The case study outlines that managers have been introduced to performance appraisals but there is a lack of evidence regarding training, which would offer grater understanding of its importance and build the commitment. The Boston...