HRM, PERFORMANCE MANAGEMENT, HUMAN ‎RESOURCE MANAGEMENT, MANAGING HUMAN ‎RESOURCES, PERFORMANCE MANAGEMENT ‎PROCESS, EMPLOYEE PERFORMANCE FACTORS, ‎PERFORMANCE MANAGEMENT STRATEGY, ‎PERFORMANCE EVALUATION, NEED OF ‎PERFORMANCE MANAGEMENT, BUSINESS ‎ADMINISTRATION, MANAGEMENT SCIENCE, ‎EDUCATION AND LEARNING,‎

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Q. 2. (b) If an organization is going in profits then why there is a need of performance
management. Discuss with arguments.
Answer.
PERFORMANCE MANAGEMENT
Definitions:
Performance management is ...
 “Series of activities designed to ensure that the organization gets the performance it needs
from its employees”. (Mathis & Jackson, 2011)
 The continuous process of identifying, measuring, and developing the performance of
individuals and teams and aligning their performance with the organization’s goals. (Dessler,
2017)
 Armstrong (2006) describes Performance management as “a systematic process for improving
organizational performance by developing the performance of individuals and teams. It is a
means of getting better results by understanding and managing performance within an agreed
framework of planned goals, standards and competency requirements. Processes exist for
establishing shared understanding about what is to be achieved, and for managing and
developing people in a way that increases the probability that it will be achieved in the short
and longer term. It focuses people on doing the right things by clarifying their goals. It is
owned and driven by line management.”
Steps in Performance management process:
Performance management’s has six basic steps as follows: (Figure 1)
Step 1: Direction sharing - communicating the company’s goals to all employees and then
translating these into doable departmental, team, and individual goals.
Step 2: Goal alignment - having a method that enables managers and employees to see the
link between the employees’ goals and those of their department and company.
Step 3: Ongoing performance monitoring usually means computerized systems to measure
the team’s and/or employee’s progress toward meeting performance goals.
Step 4: Ongoing feedback/ evaluation - providing face-to-face and computerized,
continuous feedback regarding progress toward goals.
Step 5: Coaching and developmental support should be part of the feedback process and
indentify improvements needed.
Step 6: Recognition and rewards should provide the incentives to keep the employee’s goal-
directed performance on track. (Dessler, 2017)
-2019

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The purpose of performance management is to get better results from the organization, teams and
individuals by understanding and managing performance within an agreed framework of planned
goals, standards and competency requirements. It is a process for establishing shared understanding
about what is to be achieved, and an approach to managing and developing people in a way which
increases the probability that it will be achieved in the short and longer term. It is owned and driven
by line management. Performance management enhances the engagement of people by providing the
foundation upon which many non-financial motivation approaches can be built. (Armstrong, 2010)
Performance management strategy is based on the resource-based view that it is the strategic
development of the organization’s rare, hard to imitate and hard to substitute human resources that
produces its unique character and creates competitive advantage. The strategic goal is to create firms
which are more intelligent and flexible than their competitors by developing more talented staff and
by extending their skills base. (Armstrong, 2010)
Performance management is a continuous process of evaluating the teams and individuals
performance which is essential for organizations to succeed to achieve their goals. Since the
foundation of the organization, it starts to play role for betterment and improved operations of the
organization that dose take part in the continuous progress of the organization. In the competitive
market, performance management enables the organizations to compete with their proposed
competitors regardless of the profitability of the organization. When organization is going in the
profit, it becomes essential for the organization to maintain and exceed that level having competition
in the market. Their level of performance measures changes with the competition to grow more that
also results in return to all stakeholders of the organization.
Various employee performance factors have strong contribution in the organization development
and growth in the competitive market even organization is in the profitability. Performance common
factors are explained below:
Progress objectives: These objectives surround employee skills and motivation for future
performance. Employee performance feedback is an initial developmental need because all
employees want to know how their seniors feel about their performance and how they are
effective. Managing by objectives is a systematic series in which managers and subordinate
sit down at the beginning of every performance period and agrees upon individual job goals
that subsequently serve as a basis for personal performance assessment.
Figure 1- Steps in Performance
management process

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Employee management benefits: There could be a chance that employee performance
management cannot solve every problem; it has the potential to address many common
management concerns. If it is properly used with invested time on it and cooperative
relationship, employee performance management can reduce the need to be involved in
everything that goes on.
Employee performance management can save time by helping employees make decisions on
their own by ensuring they have the necessary knowledge and power of decision to make.
Employee performance management can identify individual training and development needs.
It builds closer working relationship based on mutual trust and respect. It also provides better
feedback to individuals about their performance and progress based on mutual understanding
of needs. Regular communication ensures there are no surprises at the end of the year.
Performance helps employees understand what they should be doing and why, it gives them
degree of empowerment ability to make day to day decisions.
Employee benefits: Employee management provide scheduled forums for discussion of work
progress, so employees receive the feedback they need to help assess their accomplishment
and to know where they stand. That regular communication ensures there are no surprises at
the end of the year. Performance helps employees understand what they should be doing and
why, it gives them degree of empowerment ability to make day to day decisions. It helps in
figure out how to improve employee performance even there are no current performance
problems. It provides an opportunity to help employees develop new skills.
Employee performance and Organizational benefits: It is a big important factor when
employees in the organization understand how their work contributes to the success of the
company, employees’ morale and productivity usually improves. It provides them higher
motivation and self esteem, how they are important for organization and how they are playing
important role in organizational goals success. These links between employee and
organization provide very clear competitive edge on other organizations.
Managing employee motivation: Motivated capability is the quality that organizations most
need from employee. This means that organizations must offer employees sufficient
incentives to attend work and do a good job. Like the employer, the employee is motivated to
enter an employment relationship when: The benefits of doing so (such as wages and social
standing) out weight the costs (such as increased stress, intrinsic enjoyment and travelling
costs). If organizations treat employee right way in motivating them in meeting their needs,
social values, learning, trainings, benefits, and bonuses, employee such motivations
encourage them to effectively contribute in the organizational growth efficiently.
Competencies are the skills and knowledge of an organization’s human capital. A major
feature of the environment is its ability to supply qualified motivated high performers who
can implement their strategy.
Employee loyalty: Loyal employees always are true to the organization because they think
organization has their best interest. They want to stay with the organization because they feel
comfortable, serve for organizational performance and do their best to enhance it. They
always express good organizational image to the world. Loyal employees are keen to continue
their best effort to achieve organizational goals and objectives. These qualities make them
loyal employees which help to achieve higher level of organizational performance.
(Mustafa, 2013)
Providing a basis for promotion/ transfer: Many organizations are not transparent
concerning how to be promoted. A performance review process more readily identifies those
employees who deserve promotion and those who require lateral shift (transfer) or need to

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enter into a remedial program. This system also aids career planning. It brings in talented and
skilful team at levels for better performance for the organization.
Enhancing employees’ effectiveness: Most people really do want to be better at their jobs!
Helping employees to identify their strengths and weaknesses and informing them of the
organization’s expectations concerning their performance helps them to better understand the
role they play and increases work efficiency. Feedback reinforces good performance and
discourages poor performance.
Aiding in designing training and development programs: Professional trainings to the
employees, it enhances their skills, confidence, value, and their importance for the
organization. It encourages the employees and ultimately delivers to the organization within
certain job performance.
Building teams: Counselling employees corrects misconceptions, which might result in work
alienation. Performance management also helps employees to internalize the norms and
values of the organization. Social gathering, employees interactions with other team members
within the organization boost their collective values that bring out better combined teams to
execute collectively for organizational performance.
Removing discontent: Performance management puts all employees on the same measuring
tape. Identifying and removing factors responsible for worker discontent motivates them to
perform better at work. Performance management helps to create a positive and healthy work
environment in the organization.
Developing interpersonal relationships: Relations between superiors and subordinates can
be improved through the realization that there exists a mutual dependence that leads to better
performance and success. By facilitating employees to perform introspection, self-evaluation
and goal setting, their behavior can be modified. Better interpersonal relationships bring out
strong teams who serve the organization objective effectively in the competitive market.
Exercising control: A performance review process provides a means to exercise control of
projects focused on, and helps keep employees aligned to the agreed upon annual goals and
objectives. It enables the team to remain on right track, improves work efficiency, and
organization progress to meet their standards for better growth.
Improving communication: Performance management serves as a mechanism for improved
communication between superiors and subordinates. Teams can discuss issues, ideas, better
approaches with their managers that may contribute in the progress well. This approach is
effective that build the strong relations within the teams to work progressively.
(Griffin, 2017)
Without performance management measures, that have direct relation with the organization’s
mission, strategic goals, advancement of team by providing trainings, benefits, advantages,
competitive compensation and work execution methodologies or internal processes, organization
growth becomes difficult to measure and to manage the teams. Many organizations treat their smart
employees, who are contributing in the success and growth of the organization, as their asset and
reward them accordingly. Small steps of growth enables the organizations to become profitable and
continuous mutual benefits of all stake holders make organizations market leaders in the competitive
markets. Organizations are then more concerned with their value in the market, and the value of their
team’s productivity that was the strong impact of performance management and collective

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collaboration for the success. Large organizations never lose their teams and provide them many
facilities to make them happy, motivated to get better value in return in term of Organizations’
growth.
Conclusion:
Employees have a great deal of contribution in the success of great organization. Only highly
committed employees can be a solid basis for a well functioning of an organization. However, in
order to be a highly committed employee, employees need to identify themselves with the
organization and value the organization as a great employer. So, factors such as performance-related
payment, job security, and diversified tasks are extremely important when highly committed
employees are to be attracted. In order for these structures to be in place and to be successful,
employees need to know what is expected from them and how they are measured up to expectations.
It is not only the status of employee’s performance on the expected tasks, but employees also need to
know how their performance can be improved. Also, in order to ensure the diversity of one’s work
and continuous growth and development, employees need to have the possibility to grow into
different roles and to take over new responsibilities. Furthermore, not employees but also supervisors
can profit from a well-structured performance and potential management process by being guided
through the process and with this they be able to identify and develop potentials in their organization.
Well-structured performance and potential management can be a great tool in order to ensure all of
the factors and to provide an attractive and inspiring workplace for employees and their supervisors.
REFERENCES
Armstrong, M. (2006). A Handbook of human resource management practice. 10th
ed. London:
Kogan Page Ltd.
Armstrong, M. (2010). Armstrong’s essential human resource management practice : a guide to
people management. London: Kogan Page Ltd.
Dessler, G. (2017). Human resource management. 15th
Ed. Upper Saddle River, NJ: Pearson
Education, Inc.
Griffin, M. A. (2017, November 14). 10 Great Reasons for Performance Management (Annual
Reviews). In His Name HR. Retrieved from https://inhisnamehr.com/10-great-reasons-for-
performance-management-annual-reviews/
Mathis, R. L., & Jackson, J. H. (2011). Human resource management. 13th
ed. Mason: Cengage
Learning.
Mustafa, M. S. (2013). Key Factors In Performance Management [Bachelor’s thesis ]. HAMK
University of Applied Sciences. Finland
Zeuch, M. (Ed.). (2016). Handbook of human resources management. Berlin: Springer-Verlag.