Performance management is defined as a process that contributes to effective management of teams and individuals aimed at achieving high levels of performance in an organization. Hence it creates a shared understanding the objectives and the means to lead and develop people to ensure the achievement of the same. Generally, this is a strategy that relates to every organizational activity set in the context of human resource culture, policies, communications systems and style (Armstrong & Baron, 2004). The strategic nature is dependent on the organizational context and may vary from one organization to another. Performance management has in recent times come in handy to replace performance appraisals.

Performance Management

Appraisals forms or performance appraisals and reviews can be said to be diminishing in effect. They always come as an annual assault that stands alone, making performance appraisal being avoided and disliked universally. It is because most people in organizations dread the idea of that they were less perfect the previous year. Managers are also not willing to face such arguments, which would essentially lead to diminished morale because of the process of performance appraisal. Supervisors perceive that their time is not utilized well professionally in documenting and providing proof that supports year long feedback (Cunneen, 2006). Additionally, most vital outputs for performance appraisal from each individual’s job may not be measurable or defined in the current system of work. The appraisal system is often harder to manage if taken a step higher by tying the salary increase of employees to their rating numerically.

Performance management is about creating a culture where individuals and teams assume responsibility for the sustained improvement of their own skills, behavior, contributions and the business process. The concern lies in sharing expectations wherein mangers clarify what they expect to be done by groups and individuals. Teams and individuals likewise can transmit their expectations on the way they should be managed and their needs in performing duties assigned to them. Hence performance management is about interrelationships and how to improve the quality of the same between managers and individuals or teams, and is thus a joint process. It also defines expectations that are usually expressed in business plans as objectives, and in measuring what is managed (Armstrong & Baron, 2004). Performance management is not a one-off event but rather a continuous process, which is holistic and ought to pervade all aspects of organizational running.

Citing organizational improvement and employee development as the true goal of performance appraisal leads to a consideration of the performance management system. Performance management therefore narrows its focus in the establishment of what is really needed in an organization and development. Successful organizations realize that to effectively compete and win in the present market place demands attraction, development, and retention of productive and talented employees. A performance management system gives organizations this competitive edge by assisting them to hire talented people. These people are situated in right positions and their individual performance aligned with the vision and strategic objective 0of the organization. Essentially, their abilities are developed and reward performance commensurate with contributions to the success of the organization (Cunneen, 2006).

Conclusion

Unlike the limitation and frustrations associated with annual performance appraisal, effective performance management can be very beneficial. It leads to improved productivity by enhancing the way people work and determining the outcome of their production. Employee morale is also improved due to on-time performance appraisals and rewards commensurate with the contribution of employees. Performance management also ensures that top performers are retained in the organization, as workers who feel that their work is accomplished turn out to be loyal employees. Ultimately performance management ands the facets therein result increased profitability, because loyal employees are capable of delivering higher service levels that establish customer loyalty.