The performance management system is a crucial HR tool that communicates organizational goals to employees, tracks individual performance, and provides feedback for development and improvement. It encompasses goal setting, performance evaluations, training opportunities, and legal considerations, aiming to enhance employee performance and align it with organizational success. Overall, it serves to identify underperformers, reward high achievers, and support employee development, thereby contributing to a healthier workplace environment.

1. MEANING, USESAND PURPOSEOF

2. Performance management system is tool which
is used to communicate the organizational goal
to the employees individually, allot individual
accountability towards that goal and tracking of
the progress in the achievement of the goals
assigned and evaluating their individual
performance. Performance management system
reflects the individual performance or the
accomplishment of an employee, which
evaluates and keeps track of all the employees
of the organization.

3. Performance Management System is the tool
that helps the managers to manage their
resources and eventually result in the success
of the organization. Performance
management system is a very broader and
complicated function of HR. It includes
activities such as joint goal setting, frequent
communications, continuous progress
review, feedback of the performance and
rewarding the achievements.

4.  Providing career development support and promotional
guidance to the employees.
 Performance management system helps in giving regular
feedback and coaching during the period of delivery of
performance.
 By proper selection process, selecting the right set of
people.
 Making clear a job description and employee performance
plan.
 Arranging training and development programs based on
the evaluations of the performance of the employees.
 Conducting the exit interviews in order to know the reason
for the discontentment and from the organization.

5. Several benefits of performance management systems, which can
improve a company’s performance are listed as below:
1. Performance based conversation- This enables the managers to talk
about the performance of the employees individually. They may help the
employees in case he is not performing well, on the other hand
appreciate him in case he does good work.
2. Performance management system can also help to identify the
employee development opportunities, which could be the crucial part of
the succession planning process.
3. It rewards the employees who are good performers as employees
deserving the promotions can easily be identified.
4. The under performer can be identified and eliminated or helped
improving his performance with various training and development
programs.
5. Proper maintenance of the past performance records of the employee in
a systematic order, which can be used for future references.
6. Employee himself can gauge his performance and work upon it
accordingly.

6. Performance Management is often a misunderstood concept most
people associate it with concepts such as: Performance appraisal,
Performance-related pay, Targets and objectives, Motivation and
discipline. But, performance management is much more than this.
Performance management is about getting results. It is concerned with
getting the best from people and helping them to achieve their potential.
It is an approach to achieving a shared vision of the purpose and aims of
the organization. It is concerned with helping individuals and teams
achieve their potential and recognize their role in contributing to the
goals of the organization.
A performance management system consists of the processes used to
identify, encourage, measure, evaluate, improve, and reward employee
performance at work. Employees’ job performance is an important issue
for all employers. However, satisfactory performance does not happen
automatically; therefore, it is more likely with a good performance
management system.

7. (1) to improve employees work performance by
helping them realize and use their full
potential in carrying out their firms missions
(2) to provide information to employees and
managers for use in making work related
decisions. More specifically, performance
management system serve the following
purposes:

9. Appraisals provide feedback to employees
therefore serve as vehicles for personal and
career development. Performance appraisals
must convey to employees how well they have
performed on established goals. It’s also
desirable to have these goals and performance
measures mutually set between the employees
and the supervisor. Without proper two-way
feedback about an employee’s effort and its
effect on performance, we run the risk of
decreasing his or her motivation.

10. Once the development needs of employees are identified,
appraisals can help establish objectives for training programs. It
refers to those areas in which an employee has a deficiency or
weakness, or an area simply could be better through effort to
enhance performance for example suppose a college professor
demonstrates extensive knowledge in his or her field and conveys
this knowledge to students in an adequate way. Although this
individual’s performance may be satisfactory, his or her peers may
indicate that some improvements could be made. In this case,
then, development may include exposure to different teaching
methods, such as bringing into the classroom more experimental
exercises, real world applications, internet applications, case
analysis, and so forth.

11. A performance evaluation system would be remiss if it did not concern itself with
the legal aspects of employee performance. The job related measure must be
performance supported when an Human Resource Management (HRM) decision
affects current employees. For instance, suppose a supervisor has decided to
terminate an employee. Although the supervisor cites performance matters as
the reason for the discharge, a review of this employee’s recent performance
appraisals indicates that performance was evaluated as satisfactory for the past
two review periods. Accordingly, unless this employee’s performance
significantly decreased (and assuming that proper methods to correct the
performance deficiency were performed), personnel records do not support the
supervisor’s decision. This critique by HRM is absolutely critical to ensure that
employees are fairly treated and that the organization is “protected”.
Additionally in cases like sexual harassment, there is a need for employees to
keep copies of past performance appraisals. If retaliation such as termination or
poor job assignments occurs for refusing a supervisor’s advances existing
documentation can show that the personnel action inappropriate.
Because documentation issues are prevalent in today’s organizations, HRM must
ensure that the evaluation systems used support the legal needs of the
organization.

12. As a result of proper specifications of
performance levels, appraisals can help
diagnose organizational problems. They do
so by identifying training needs and the
knowledge, abilities, skills, and other
characteristics to consider in hiring, and they
also provide a basis for distinguishing
between effective and ineffective performers.
Appraisal therefore represents the beginning
of a process, rather than an end product.

13. Appraisals provide legal and formal
organizational justification for employment
decisions to promote outstanding performers; to
weed out marginal or low performers; to train,
transfer, or discipline others; to justify merit
increases ( or no increases); and as one basis for
reducing the size of the workforce. In short,
appraisals serve as a key input for administering
a formal organizational reward and punishment
system.