PERFORMANCE MANAGEMENT SCHEMES (PMS)
Introduction
Performance Management Schemes/Systems (PMS), otherwise known as performance-based evaluations or performance appraisal, set organizational, departmental (team) and individual objectives followed by a subsequent assessment that ensures objectives are achieved and delivered. As such, PMS are performance or work measurements that align organizational objectives to individual performance.
According to the Chartered Institute of Personnel and Development (CIPD), a fully-realised performance management is a holistic process, but for this very reason, such process is complex and capable of being misunderstood (2005).
As Armstrong and Baron put it, performance management is also a strategy that relates organizational endeavors embedded in the context of human resource (HR) policies, culture, style communication systems into the individual performance objectives.
Based on these two definitions, performance management purports on establishing a culture, sharing expectations, creating interrelationships and a joint-holistic-continuous process which also involves planning and measurement (2005).
Such processes and strategies may vary form organisations to organisations. Hence, the degree of perceived complexities and misunderstoodabilities may also vary. In lieu, this paper aims at outlining those organisational mistakes of implementing PMS.
Organisational Mistakes in PMS Implementation
Mistake 1: Measurability – subjective vs. objective
Objective measures include hard criteria as sales, units produced, error rate, personnel data, absence rate, turnover and tardiness. In contrast, subjective measures focus on performance measures and their goal is to accurately assess performance. However, organisations tend to be lenient in performance methods to ensure objectivity. Opportunity-biases occur and the performance is modified by the current organisational situation ().
In addition, the organisations must take into account the downstream consequences of selected performance measure, the upstream consistency and the compatibility of measures to skills, capabilities and organisational culture ( 2006 187).
Mistake 2: Lack of organisational support (2004)
Organisational support includes basic work conditions, resources, facilities and inputs from internal customers among others. As part of PMS, such factors must enable individual employees to do better and deliver expected results. The need for these employees to do such, one must have competencies, motivation and organisational support. If these support mechanisms does not exist in the organisation, the organisation cannot expect to implement an effective PMS and to arrive at desirable results.
Mistake 3: Lack of competencies of leaders and HR employees
and said that “within an organisation of reasonable size, one can expect a personnel function”. And, organisations would not pay leaders “that pay good behaviour in fishes. Leaders must teach their respective teams how to fish and create a corporate culture grounded in reality.” As such, leaders are also accountable for the success of the PMS so, they must be also competent in order to teach competency towards the team.
Further, relates that “the biggest bottleneck in PMS implementation lies on the competencies and incompetencies of the HR department”. The business sense and the involvement within the main business must be understood and lived-by by the HR employees (2004). As overseers, they are the ones who must understood the competitiveness and the organisation’s purpose more before they can make everybody else follows and do the same. This initiative will reflect in PMS.
Mistake 4: Misalignment – organizational goals vs. individual goals
All efforts must align according to the purpose and objectives of the organisation. Mission, vision, goals and organisational strategies must be defined and clearly understood at all levels. In particular, the individual tasks must contribute to overall plans of the organisation and, in return, plans should create performance standards such as quantity, quality, time and cost. These standards should then be translated into performance for each (). Moreover, misalignment puts excessive pressures on the top management, though, it also identify the maturity level of the organisation (2004) once reflected in the PMS.
Mistake 5: Lack of employee involvement
Most Irish organisations are engaged in dualistic strategies based on direct management control (1999). The partnership-based approach (or mutual gains) towards collective initiatives strengthens direct employee involvement (1999). Such involvement is directly correlational to unionization which gives employees the power to voice their concerns which also motivates them in engaging in a more responsive workplace. Declining memberships and declining union power placed ‘strategic dilemmas’ for the employers (1999) which, in effect, demoralized the employees as union members. If PMS does not understand this stance, it is impossible for them to design an effective PMS.
Mistake 6: Improper PMS
There are considerations in choice of a schema as: cost, usefulness in employee development, usefulness in administrative decisions and validity (). Evidently, the pre-implementation plan is critical; however, most companies fail to design a customised scheme. Most employers and HR employees seem to overlook and undermine the importance of this stage. They fail to answer the who, the why and the how.
In addition, improper PMS is also evident in standard-setting, appraisal method and the ‘kindergarten report card’. Performance standards must be set according to the level of expertise. A lot of times, though, HR managers summarise performance in a quick, easy way for fast completion which likely creates employee hostility rather than improvement. The managers also rates employees base on numeric scales then get the average performance rating that supposed to mean something ().
Mistake 7: Skipping a significant process
The scheme must include planning, monitoring, developing, reviewing and rewarding (. said that the concept of management-by-objectives (MBO) involves all the managers in a strategic planning process since planning improves the implementability of the plan (1954). In addition, PMS must be set on a daily basis in order to provide feedback, to coach and to adjust the goals whenever necessary. Discussions and documentation must be also in placed. Then, monetary and/or non-monetary rewards and recognition must follow (). If an organisation will fail to do so, in essence, the organisation might jeopardize individual, team and organisational growth and might sacrifice the credibility of the HR functions. PMS processes also confirm that the organisation is speaking the same strategic language (2003).
Mistake 8: Conflicting interests
Organisations seek informations to improve systems and on which to base rewards. On the other hand, employees seek valid performance feedback and extrinsic rewards. These conflicts are anathema to the requirements of an effective PMS as relevance to job performance, distinguishing high and low performance and fairness and acceptability. Moreover, the organisation’s measures, standards and methods might increase the conflict within the workplace ().
A more densed conflict arises regarding the internationalisation initiatives of Irish organisations. Contemporary trends and labour changes implicate HR functions including employee attraction and retention, job design, employee motivation, reward systems and employee relations ().
Mistake 9: Disrupts existing systems ()
Often than not, organisations are generally inclined at decision-making without consensus-building. More particularly, the Progressive Disciplinary Systems subject poor performers in an unlikely and shameful situation. Some organisations directly converge into disciplinary lay-offs when it should be motivation and counseling first. Then verbal or written reprimand may follow if counseling won’t work. Another, organisations tend to lose respect for confidentiality.
Mistake 10: Lack of communication
As a continuous and holistic cycle, before during and after the implementation communication must be extensive. Communication must also purport the timeframe for the PMS cycle, instructions for the supervisor and the employees and tie to other systems and support available (Gautam). In connection, open-line communications allow clarifications of roles, expectations and responsibilities as well as employee contributions to the organisations (1999).
Conclusion
A PMS is an important part of organisational goal-setting and decision-making. PMS also supports the role of creating a positive employee relations environment (2006). However, some companies fail to properly integrate PMS in their HR strategies and processes without realizing that it can have serious financial and administrative implications.
Internally, organisations must first assess current status of the organisation as a whole before it engage in a PMS to avoid costly mistakes. The organisations must know its capabilities to hold and support a performance management schema at all levels. Internally, organisational priorities must be set first to avoid stakeholders’ conflict of interest and to align individual priorities within the performance management process. The schema that will be implemented must be measurable and valid. The PMS must consider consequences and compatibility within the organisation, the culture and the employees. In addition, organisational support, top-management competency, employee engagement and communication are crucial elements of a successful PMS. As a holistic process, the management, most specially, the HR department and the employees must proactively and responsively engage. Support and communication in an organisation-wide effort must be always present and information and messages must be horizontally and vertically integrated.
once said that performance management is “a deadly disease in organisations”. Indeed. If PMS is not carried-out accordingly and if the process does not put the employment relations at the core of the schema, organisations will never prove to be productive, effective and efficient performance-wise.
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