Page 19 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes 2.1 Objectives of Performance System

Performance management arrived in the late 1980s partly as a reaction to the negative aspects of
merit-rating and management by objectives referred to earlier. Of course, it at fi rst incorporated
many of the elements of earlier approaches; for example, rating, objective-setting and review,
performance pay and a tendency towards trait assessment. Some of these features have changed.
Conceptually, however, performance management is significantly different from previous

approaches, although in practice the term has often simply replaced performance appraisal, just
as human resource management has frequently been substituted for personnel management
has frequently been substituted for personnel management without any discernible change in
approach lots of distinctions, not many differences.
Performance management may often be no more than new wine in old bottles or to mix

metaphors, a ‘flavors of the month’. But it exists, and our research demonstrates that interest is
growing why?
The following are the key objectives of PMS:
1. To leverage the performance of organisation, given that goals are complex
2. To ensure role clarity performance objectives at all the levels of organisation
3. To encourage high performance work culture

4. To encourage team building in the organisation
5. Employee development by systematically identifying training and development needs
6. To improve relationship between manager and employees through a two way
communication process
7. To focus on process rather than on format
8. To encourage performance based rewards and recognitions in the organisation

!
Caution The use of performance management in the best-practice companies is not
because it is a better technique than performance appraisal, but because it can form one
of a number of integrated approaches to the management of performance. The appeal of
performance management in its fully realized form is that it is holistic: it pervades every
aspect of running the business and helps to give purpose and meaning to those involved in
achieving organizational success.

2.2 Functions of Performance Management System

Performance management system can fulfi ll different functions for different organisations. The
given below are the key functions of PMS:

1. Helps in clarifying the mission, vision, strategy, and values of the organization to the
employees in order to enable them achieve the same

2. Helps in improving various business processes as the deficiencies are highlighted.
3. Helps in attracting and retaining talents in the organization and helps in establishing a
robust talent review system.
4. Facilitates competency mapping, training and development needs identifi cation, and
implementation as part of the performance development tool (employees have the
competencies to met both the present and emerging requirements of the organization).

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