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Performance Management Issues


Performance management refers to the activities that are undertaken in a certain company, organization institution, department and an individual to ensure that all the set goals and objectives are met in an efficient and effective way. This is a concept that is usually applied mainly in the work places but still is very applicable in as far as the interaction with people is concerned. This is because it acts as a principle through which the relationship of people is improved. It can also be defined as a strategy or rather an integrated approach set up by a certain organization as an effort to improve the employee’s performance through increasing effectiveness (Ansoff, 2007). It aims at capacity development of teams and individuals as well as the organization. This means that it also tries to harmonize individual goals of the employees with the goals and objectives of the organization so as to ensure that all employees are working towards reaching the same target for the benefit of the organization.

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Types of Performance Management Plans

There are a number of performance management plans depending on the target group, the period of time the performance management system is intended to serve and their role in the organization. There are therefore the short term and the long term plans. The short term plan is a performance management plan that is intended to last for a short period of time and that is usually targeted for short term projects and employees with a short term contract. The long term plan is designed for the employees with a permanent or a longer period of contract. It is also used in the implementation of the organization’s long-term projects’ goals and objectives (Hill & Jones, 2007).

Impact of Performance Management on Employees and Organization

Performance management is very beneficial to both the organization and the employees in a number of ways. Performance management improves the gains of the organization or the individual directly through cost reduction. This is achieved through the minimization of unnecessary expenses or the complete avoidance of any form of project overrun. This is because performance management enables the employees to manage their time properly hence ensuring that a project does not extend more than it should. The organization’s goals are also directly aligned with the goals of the managers or the chief executive officer (Hill & Jones, 2007). Through performance management, the time for creating any changes in the organization is minimized since the change is introduced in the organization in the form of a new goal. It is also a way of managing control improvement in any organization and is very helpful to the organization because it assists in controlling the employees’ behavior.

The Relationship between Performance Management and Compensation

There is a significant relation between compensation and performance management. This is because compensation can be a way of performance management. Compensation refers to the payment given to people for the work done. It can be in the form of finances through the remuneration of workers or damages as a result of injuries incurred during work duties (Cole, 2003). The compensation package therefore can be direct or indirect. In every organization, compensation is a very important aspect in the establishment of the relationship between the organization and the workers. This is why in every successful organization there is a well established and managed compensation system. The two relate to each other because they deal with the behaviors of the employees. Compensation and performance management can both be used to influence the behavior of the employees, for instance, to increase their productivity or commitment to the organization. If well and properly managed, the two can lead to an increase in the performance of the organization. It should be noted that both compensation and performance management deal with the skills of the employees. Through a compensation system and the performance management of an organization, the culture of that particular organization can easily be known. This is because both of them entail the values, philosophies and practices of that organization (Cole, 2003).

Factors to Consider when Implementing Performance Management

Performance management must be carefully implemented for it to be successful. This is because it is an aspect that can interfere with the normal routine of the organization, the behavior and the working conditions of the employees in the organization. Therefore, any organization needs to seek and implement a good plan or strategy. A number of factors must be considered before its implementation. The benefit of the system as far as the profitability of the organization is concerned must be considered. If the performance management strategy will not be of any help in increasing the organization’s profit then it should not be implemented. All performance appraisals should be eliminated because they are a liability to the company in the sense that they consume a lot of money. A performance management strategy should also be used for the employees rather than the managers. Lastly, a performance management strategy should be applicable and easy to implement (Ansoff, 2007).

Reference List

  1. Ansoff, H. (2007). Strategic management. New York: Macmillan.
  2. Cole, G. (2003). Strategic management. London: Cengage Learning.
  3. Hill, C., & Jones, G. (2007). Strategic management: An integrated approach. London: Cengage Learning.

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