The situation has been illustrated many times where employees and managers have
received favorable reviews and bonuses and yet the organization has not achieved its
Management “buy-in” is equally important to the employee evaluation process, If
individual goals are not aligned with business strategy, then time and resources are
History of Employee Evaluation process
The History of employee evaluation process started early 1900s. It is not a new
concept, it just kept evolving in the process. It started as simple annual employee
rating system, the supervisors just judge how they see performance of an employee at
the end of year. It is based on the manager’s view of his subordinate’s performance.
Then performance appraisal system was evolved, Managers make subjective
judgments about the performance and behavior of the employees, but the
disadvantage that the Performance appraisals were carried out only one time at the
end of the year, to measure the performance of an employee, The Feedback flow is
also in one direction; from the manager to the employee. Performance appraisals
focus on the negative feedback that happened on the past during the year, which
leads the employee to be frustrated and most of the time it becomes the root cause of
low employee morale at work-space.
The Organizations shifted their focus from performance appraisals and reached more
effective collaboration process called “Performance Management”.
What is Performance Management?
Performance management is an ongoing process between managers and employees
that effectively working together to meet a Year-to-Year strategic objective of the
organizations. The fundamental goal is to improve the overall organizational
performance by managing the performance of teams and individual.
It clarifies the employee’s job responsibilities and expectations, setting organization
objectives, identifying employee’s goals, providing feedback on the performance of
the employee through the year, and keep reviewing the results.
Performance management requires a multifaceted approach linked to organizational
strategy, it brings together many of the elements that make up the practice of people
management, as its aim is to ensure that employees contribute positively to business
objectives through the year.
What is Performance Management System?
Performance management system is a tool that an organization use to align the
individual effort with the organization goals, and use a systematic approach to be able
to run and control the evaluation process effectively:
1. The employee and the organization defines how the job contribute to the
2. They agree with each other what needs to be done to meet or exceed
3. Through follow-ups, coaching and regular status updates, which allows the
manager and employees to identify problem and make any necessary changes
in the work that is no longer useful or and helping them to develop actions plan
to improve his performance.
4. An annual review will be summarizing the employee’s performance through the
year, what was done and what not.
Objectives of Performance Management
Employees performance is an image to an organization. It is important that an
organization know what steps to take if a staff member is not meeting expectation.
Managers should take an integrated approach to employee learning. This means
creating development plans that support an employee’s goals, career interests, and
potential, as well as the organization’s business and talent needs.
The Performance management is based on a two-way communication between the
employee and the manager to guarantee that the employee is performing well through
the year and achieving the organizational objective. The process help ensures
equitable treatment of employees. This is the key in driving performance and motivate
employees to be best they could be.
Organization used this new method to drive behaviors from the employees to get
specific outcomes. It has a win-win approach as the appraisals are based on the
results that are achieved during the year.
Benefits of Performance Management
- Increase job satisfaction: The Relationship with the manager and his employee has always been a strong indicator of job satisfaction, by agreeing on performance objectives, The Employee will know what is expected from him through the year and how to achieve it and feel real commitment of their job.
The Employee will get more engaged as well when he sees the value of his work
aligned to the organization goals. Positive Feedback would encourage the Employee
to go work with the intention of doing a good job.
- Trust on the Performance Result: During the year, the manager will be collecting regular feedback from the employee on his goals, identify his weakness areas and work together to improve his skills and work productivity.
The manager would invest time in creating a development plan that would prepare his employee for promotions, grow and advance his careers within organization through coaching and mentoring programs.
Unlike traditional way of assessment, ongoing coaching and feedback would eliminate surprises during performance assessment review and would build trust between employee and his manager on the result of the performance evaluation.
- Regular Performance Conversation: Annual performance reviews aren’t timely in providing feedback or support on a particular issue.
A performance management process forces managers to discuss performance issues
with employees on a regular basis. Even if the manager is busy with other daily
responsibilities, an open communication and transparent job feedbacks to the
employee is a must.
The objective of Regular Performance is to facilitate effective communication related
to work performance and link it to organizational effectiveness through productivity
- Identifying and managing poor performance: Most of the time the cause of poor performance is the unclear expectation, workload is too high or insufficient trainings.
The organization needs to be able to track low performers employees, tell them the expected behavior, acceptable standard and how an employee can achieve the standard. Manager will be creating a career development plan to manage their performance throughout the year.
If still no improvement in performance the manager would need to proceed to a formal stage of a disciplinary process.
- Rewards and Compensation Result: Based on the summary of the employee’s work through the year and his innovation and contribution to improve the organization goals, A clear link will be established between performance and compensation. he will be recognized and rewarded depending to his performance by either meeting the expectation of the organization or exceeding its expectations.
The objective of the Reward is to motivate and encourage employees to perform at
high level in the next year and continue exceeding expectation and increasing the
revenue of the company.
Latest posts by Management Study HQ (see all)
- What is Financial Function? Objectives & Importance of Finance Functions - June 20, 2018
- Role of a Financial Manager - June 20, 2018
- What is Managerial Communication? Importance And Types of Managerial Communication - June 7, 2018