Download - Performance Ch07
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Aims of the chapter
To describe the relevance and development ofperformance management
To define performance management and describe its
application as a management intervention for improvingorganizational performance
To understand the role of HRM in managing performance
To explain the theoretical contribution towards the
development of performance management as anintervention
To explore contemporary issues and consider the futureof performance management.
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Meaning of performance management
Managing performance (performance management) is
about individuals, groups and organizations achieving
something that is desirable or intended as a
consequence of their actions, which leads to
improvement and is invariably associated with
effectiveness and efficiency.
Put simply as managing the business.
(Mohrman and Mohrman, 1995)
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Growth of performance management
Globalisation
Competition
Shareholder and stakeholder expectations
Intervention for managing improvement
Private, public and third sector organizations.
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Performance management and HRM
Performance is a people outcome
Managing performance is in the HRM domain
HRM models link HR practice with performance
Performance related to work practices
HRM and line managers share responsibility.
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Performance management in practice
Performance management methods or tools
Foundations in motivational theory, systems andoperational management
Performance management systems link individualperformance with the organization, e.g. MBO andBalanced Scorecard
Organizational aims cascaded and translated into
individual goals and targets, often linked to incentives Appraisal used as a key process to manage
performance in many organizations.
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Performance appraisal
A common method of performance management andthe main intervention (management practice) forformally managing performance
Performance review (looking back), feedback,development (looking forward) and improvement
Communication, development and motivation
Objectives, measures and outcomes
Use of reliable information as a basis for rational(unbiased) discussion and decision making.
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Values, Attitudes and Behaviour (VAB)
Performance is an outcome of the choices peoplemake about how they behave, i.e. discretionarybehaviour (Purcell et al, 2003)
Organizations seek desirable behaviour in employees,
i.e. behaviour that leads to good performanceoutcomes which help achieve business aims
Values and attitudes motivate individual (and group)decisions about behaviour in work, influencingperformance outcomes
Organizations attempt to align employee VABs withtheir own in recruitment, selection, development,performance management, career progression andrewards, i.e. by managing performance.
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Contemporary issues in performance
management
Human Capital Management (HCM): attempts toquantify the value and contribution of people inorganizations can this be quantified?
HCM applies performance management methodsbased on measurement (metrics) what to measure?
Governance: managing and reporting on performanceis a key element of effective governance
Should organizations be made to manage and reporton performance to a greater extent, i.e. continue toadopt best practice on a discretionary basis or moreregulation?
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The future of managing performance?
A question of convergence or divergence
Direction will be influenced by forcing factors
How will continuing globalisation and deregulation ofmarkets influence the business and economiclandscape?
How will social and environmental pressures influence
business legislation and how organisations function? Best practice and regulation will lead to a conformity
and convergence conditions for stagnation orinnovation?
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Summary questions
1. Why is performance management relevant toemployers and employees?
2. How might an employees perception of performancemanagement differ from their employers?
3. How do HR managers contribute to the performanceof organizations?
4. What is the purpose of a performance management
system?
5. Critically evaluate the performance appraisal as aneffective management intervention to improveemployee performance.