Welcome to Chehans Business Management

Perfomance Management

Performance Management

Performance Management is a continuous and systematic approach that ensures the achievement of organizational business goals by streamlining employee performance and efforts to match the set goals efficiently. Performance Management builds a communication system between a Manager and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. Performance management is an important aspect in HRM. It is used to create a work environment where people are motivated to provide their best performance and do quality work.

The objectives of the performance management system are as follows:
  • It enables the employee to achieve the work performance of set standards
  • It helps to identify the skills and knowledge required to perform a job efficiently.
  • It is a very important factor to motivate employees and boost employee empowerment
  • It provides a communication channel between the team and supervisor. It makes the goal-setting process more transparent.
  • It identifies the issues which lead to low performance and also resolve the issues by providing suggestions about development interventions.
  • It provides data for several important decisions such as promotions, strategic planning, succession planning, and performance-based compensation.

The advantages of the performance management system are as follows:

  • Documentation:

    With the help of a performance management system you can generate a performance document for every employee for the particular financial year. This paper can be maintained in the employee file to cover the performance graph of the employee throughout the working years.

  • Structure

    It creates a formal structure for communication between supervisor and employee. It makes it necessary for supervisors and employees to take out time and discuss the performance as well as bring out a solution to improve performance.

  • Feedback

    Employees are often interested to know the feedback about their performance in the organization. Here the performance management system makes it mandatory for the supervisor to provide timely performance feedback to the employees.

  • Clarify Expectations:

    Using performance management system managers can clarify the performance and behavior expectations that employees should understand.

  • Annual Planning

    It plays a vital role in the annual planning of hiring, training and development practices, and goal settings.

  • Motivation

    As a part of a comprehensive compensation strategy the performance management system is very helpful to motivate the employees to improve their performance.

The disadvantages of the performance management system are as follows:

  • Creates Negative Experience:The system can create a negative experience for the employees, if the performance appraisal is not done in a fair way and feedback is conveyed in a wrong way.
  • Time-Consuming: It is very overwhelming for managers to evaluate and manage the performance of hundreds of employees working in the organization. The process becomes time-consuming and not worth it.
  • Natural Biases: As managers are responsible for several steps in the performance management system a natural bias from the manager's end is expected. The natural biases can result in rater errors.