To establish the role of Performance Management in controlling and developing employees it is imperative to understand the definition of Performance Management and its evolution. Evolution Performance Management is relatively a new concept, which has developed tremendously since the last two decades. As per CIPD (2009) Performance Management has been around in the language of HR and people management since the 1980’s. The above point is also mentioned by Williams R, (1998) stating that Performance Management came into prominence in the late 1980s/ early 1990s.
“The term performance management was first used in the 1970’s but it did not become a recognised process until the latter half of 1980s” (Armstrong, 2009). Thorpe, (2004) states that ‘Performance management as an identifiable subject for academic study and research arguably began in the mid-1990’s’ Performance Management has evolved over the years from performance appraisal systems into a more holistic approach.
As per Bach, (2005) “With the increased recognition of the problems that permeate many company appraisal schemes, there has been a shift of emphasis from performance appraisal to performance management” (p290). “The reality of contemporary performance management practice is probably best seen as ‘a logical progression in the history of the development of appraisal systems’” (Lundy and Cowling, 1996, p307). Definitions
‘The essence of Performance management is establishing a framework in which performance by human resources can be directed, monitored, motivated and refined; and the links in the cycle can be audited’ (Clark, 2005) As per Armstrong and Barron, (2009) Performance management is ‘A process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance’ (cited in CIPD 2012).
‘Performance management encompasses activities such as joint goal-setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee-development programs and rewarding achievements. It can be regarded as a systematic process by which the overall performance of an organisation can be improved by improving the performance of individuals within a team framework’ (Drum, 2005) ‘Performance management is the process of creating a work environment in which people can perform to the best of their abilities.
It is a whole work system that begins when a job is defined as needed and expectations are clearly communicated to the employee’ (Den Hartlog et al. , 2004) The role of Performance Management in both controlling and developing employees: Beamon, 1999, argues that, ‘Despite the increasing focus on collaboration between enterprises from one side, existing studies in the area of performance management still narrowly look at the single enterprise and its “within-enterprise” process and people ‘(cited in Busi and Bititci, 2006).
The literature review brings up some interesting common themes and issues that run through the existing literature, research and definitions of performance management. These common themes will focus on features of performance management and its application in an organisation. Performance Management versus Performance Appraisal Although Performance Management evolved from performance appraisals few decades ago, most literature still intensely focuses on performance appraisals when addressing performance management.
CIPD (2012) ‘While performance appraisal is an important part of performance management, in itself it is not performance management: rather, it is one of the range of tools that can be used to manage performance. However, it is a common mistake to assume that if organizations implement performance appraisals, they have performance management. Performance management is a holistic process bringing together many activities that collectively contribute to the effective management of individuals and teams in order to achieve high levels of organizational performance.
The process is strategic, in that it is about broader issues and long-term goals, and integrated in that it links various aspects of the business, people management, individuals and teams. Performance appraisal on the other hand is operational, short- to medium-term and concerned only with individual employees and their performance and development. While it is one of the tools of performance management, and the data produced can feed into other elements of performance management, appraisal by itself does not constitute performance management’.
Bach (2009) also states the difference between performance management and performance appraisal, ‘Advocates of performance management claim that its value resides in the cycle of integrated activities, which ensure that a systematic link is established between the contribution of each employee and the overall performance of the organisation. This strategic approach contrasts with the free standing nature of performance appraisals, in which the outcomes of each individual appraisal are rarely linked to overall corporate objectives’ (p291).
However, CIPD (2005) Survey report demonstrates that, the practice of performance management still largely revolves around objective setting and appraisal. The confusion and overlapping in organizations between performance appraisals and performance management is evident form the above literature and surveys, however it still acts as a good tool for managers to control and develop employees. Performance management is a cycle, an on-going process Performance management is a cycle and for it to deliver desired results, it needs to be an on-going process.
Conventionally, Performance management is portrayed as a three-stage cycle involving performance planning, monitoring and review (Armstrong and baron, 2005) The Performance management cycle CIPD (2012) also states ‘Performance management is a process, not an event, it operates as a continuous cycle’. Clark (2005) in his definition of Performance management also refers performance management as a cycle ‘The essence of Performance management is establishing a framework in which performance by human resources can be directed, monitored, motivated and refined; and the links in the cycle can be audited’.
CIPD Discussion paper (2009) mentions that using a survey and a number of practice-based case studies, this work concluded that performance management was most likely to be viewed as a continuous process rather than an annual activity. Porter et al (2012) states that, ‘Performance management is not an independent activity; it is in fact a series of processes supporting different elements of effective people management. Performance therefore needs to be placed very firmly in a management context’ (p 140).