Page 77 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes (1976) went as far as to predict that appraisal would ‘fall apart at the seams’ due to a combination of
managerial indifference, employee ambivalence and union opposition. This theme was reiterated
by Fletcher (1993), who suggested that the days of standardized appraisal were numbered. But,
despite these gloomy predictions, the use of performance appraisal has fl ourished.

Competency-based Balanced Scorecard Model:
An Integrative Perspective

n the current globalization induced by abrupt changes in business environment,
human resources have become the source of successful corporate strategy. This study
Iemphasizes that human resource and HR practices are the foundation for achieving
business excellence in terms of ROI, market share, employee satisfaction and customer
delight. The paper explains the implementation of Balanced Scorecard by developing
competencies in relation to values of the organization necessary for achieving business
excellence.”
Introduction
In today’s dynamic world, companies are adopting newer approaches for facing competition
and achieving business excellence. The new economic paradigm is characterized by speed,
innovation, quality and customer satisfaction. The essence of the competitive advantage
has shifted from tangible assets to intangible ones. Earlier, HR was concerned with
activities such as payroll, staffing and employee welfare but rules of game have started

to change completely as today organizations have to reckon with global competition and
match international requirements in terms of product design, process technology, quality
standards and on time delivery.
It is said today that business endeavours succeed or fail because of people involved
and only by attracting the best people and making them perform their best will lead to
accomplish deeds. Based on various studies (Pfeffer & Jeffrey 1994) it can be concluded

that firms with more effective HR management systems consistently outperform the
competition. However, evidence that HR can contribute to a fi rm’s success doesn’t mean
it is now effectively contributing to success in business. It is a challenge for managers to

make HR a strategic asset. This case justifies that there is a connection between human
resource and business success in terms of tangible and intangible measures and establishes
a framework which could assist HR professionals to make human resource a strategic asset.
Based on Balanced Scorecard (Kaplan & Norton 1996) and through competency framework
evident from corporate practices, the author has established a Competency-based Balanced
Scorecard Model.

Balanced Scorecard
Developed in the early 1990s by Kaplan and Norton (1992), the Balanced Scorecard is a
management system that enables organizations to clarify their vision and strategy and
translate them into action and has become a prominent strategic tool for the management.

6.8 Summary

Structure and Sayles have classified performance appraisal into three groups: traditional
performance rating, newer-rating method and result-oriented appraisal.
360-degree feedback is also known as ‘multi-rater feedback’, as it is the most comprehensive
appraisal where the feedback about the employees’ performance comes from all the sources
that come in contact with the employee on his job.

72 LOVELY PROFESSIONAL UNIVERSITY