Benefits of a Performance Management System

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Benefits of a Performance Management System

Today’s business environment is experiencing radical changes influenced by phenomena such as globalization and technological advancements. As such, in order for organizations to remain relevant in a constantly changing marketplace, they need to keep changing their strategies. Among the measures or tools used by organizations to promote greater efficiency and maintain their competitiveness include, for instance, performance management systems.

According to Broadbent and Richard, performance management system refers to the processes of managing employee performance for purposes of promoting individual employees performance as well as the productivity of a given organization. In this regard, the requisite components of an effective performance management system in an organization include ensuring employees understand their organization’s expectations, carrying out performance reviews, emphasize training and development for employees, create a culture of rewarding and recognizing employee performance, implementing plans in tandem with an organization’s strategic goals and appropriate implementation of corrective actions targeting employees (284). To this end, this paper critically examines the benefits of a performance management system in an organization.

The Benefits of Performance Management System in an Organization

The implementation of an effective performance management system can play a role in improving an organization overall performance. In essence, such a system can help managers to appropriately manage the performances of teams as well as individual employees with intention of an organization’s overall goals. On this note, the effectiveness of a performance management system in an organization is achievable through a focus on a number of performance improvement processes. For instance, the management an organization should focus attention ensuring that subordinates have a clear understanding of their expected roles or contributions necessary to achieve an organization’s goals and objectives. An organization expecting to establish a performance management system that is effective should also ensure that employees possess the necessary skills sets to meet the expectations in a competitive and constantly changing business environment. Achieving success with a performance management system further require an organization or the management to align its objective as well as inculcate effective communication process in all functional areas. Promoting interpersonal relationship within employees in an organization is also important in instilling cooperation and collaboration in meeting an organization’s overall goals (Brudan 115)

 An organization should also embrace performance management practices considered to promote job satisfaction as well as employee loyalty. Appropriate performance management practices to adopt in this regard include ensuring employees are provided with job feedbacks on frequent basis. On the same note, such feedbacks should be provided in a manner that is open and transparent. It is also important for the management in an organization to create a clear linkage in matters concerning performance and compensation. In addition, an organization’s focus on providing learning and development opportunities for employees can help in improving the performance of employees and the productivity of an organization. Effective performance management practices in an organization also require carrying out performance evaluations and giving incentives and reward to employees in a manner that recognizes impartiality. The effective management of performance improvement systems also requires an organization to develop clearly defined performance objectives through an emphasis on open communication and consultative processes. Further, performance improvement through best practices also entails creating opportunities for employees’ career growth (Brudan 120).

Embracing an effective performance management system in an organization can lead to benefits at the organization, managerial and employee levels. The benefits that an organization can derive from implementing an effective performance management system include better organizational performance, retention of skilled and experienced employees, enhanced productivity, adoption of responsible practices, elimination of communication barriers and cutting costs that may impact negatively on an organization’s profits. At the managerial level, the benefits associated with an effective performance management system include efficient use of time and minimizing managerial conflicts. Further, managers can achieve greater efficiency and consistency in managing an organization’s performances necessary for success in a competitive business environment. From employees point of view, the implementation of an effective performance management system can ensure they understand their expectations in an organization, embrace responsible practices, improve their worker involvement, realize career growth and job satisfaction. Overall, the implementation of a performance management system can benefit an organization in terms of ensuring it realizes its intended goals through the adoption competitive strategies (Brudan 122). However, while implementing an effective performance management system can help to improve the prospects of an organization in a competitive and radically changing business environment, there are instances where an organization can experience challenges with its implementation.


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The Challenges in Implementing a Performance Management System

There are instances where the performance of an organization can fail to meet the established requirements. In this sense, it is important for a manager or the management of an organization to be conversant with appropriate interventions to improve the performance of employees. However, challenges may also emerge especially when a wrong design is used, integration lacks, poor leadership, overlooking change management and incompetence is using a performance management system. To avoid such challenges, it is important for the management to work closely with subordinates to ensure appropriate planning for performance improvement initiatives. For instance, in order to avoid using a wrong design, the system and tools adopted should match the specific needs of an organization. In addition, there is need to ensure the performance management system fits with an organization strategic planning, HRM systems, culture and other processes. The effective implementation of the system also requires leadership commitment and an emphasis on strategic management of change processes (Busi and Umit 11).

The competitive and constant changes evident in the contemporary business environment require an organization to focus attention to focus attention in improving the performance of employees. Subsequently, in order to improve performance of employees as well as the productivity of an organization, the implementation of a continuous performance management system is necessary. The benefits that an organization can derive from implementing such a system range from improving the overall performance and productivity of an organization achieve greater efficiency at organization, managerial and employee levels to providing employees with an opportunity to improve their skills sets and realize career growth.