Page 20 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Unit 2: Performance Management System

5. Assists management in validating their recruitment and selection process and techniques. Notes

6. Helps employees attain their full potential and attain a balance between work and personal
life.
7. Improves organization’s ability to change faster by highlighting the gap between potential
capabilities and present ability.
8. Helps in making a shift from industrial relations to individual relations with a focus for
employee growth an development
9. Enables sustainable organizational competitiveness, innovation, and low employee
turnover by helping in reviewing organization structure and plan succession.
10. Builds the intellectual capital not only at managerial level but at front-line level also.
In a nutshell, performance management seeks to balance business alignment with learning and
development and performance reward.
Figure 2.1: Conditions required for Successful Institutionalization

Strong organizational Highly competent
culture with focus on employees with emphasis Professional relations
mentoring, counselling on self-learning, between managers
and ethics development, and
team spirit

Organized attempts Highly motivated
to learn form past Successful Institutio- employees receiving
experiences and nalization of PMS valuable rewards
challenges

Highly competent HR
Successful employee professionals with positive
integration Supportive top management attitude as facilitators and
implementers

Source: Adapted and Modified from Mohd. Fazal (2005).

2.3 Characteristics of Effective PMS

Characteristics of Effective Performance Management System are as follows:
1. Focus is on performance management.

2. Emphasis is on performance improvements of individuals, teams and the organization.
3. Continuous process with quarterly performance review discussions.
4. Emphasis is on performance planning, analysis, review, development and improvements.
5. Performance rewarding may or may not be an integral part.
6. Designed by HR department but could be monitored by the respective departments
themselves.
7. Ownership is with line managers, HR facilitates its implementation. KPAs or KRAs are
used as planning mechanisms.
8. Developmental needs are identified on the basis of the competency requirements for the

coming year.

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