Performance or expectation management?

Table of contents

1. Introduction
2. Objectives of performance management
3. The performance management cycle
4. Conclusion

Introduction

Performance management (PM) is an inseparable part of HRM process which helps to improve and develop the performance of the employees and is part of the reward system. By developing individuals' and teams' performances, it also helps to improve the overall organizational performance. Performance management is a process for creating a comprehension of what is to be achieved and how it is to be achieved (Weiss and Hartle, 1977).

Every organization aims to achieve results that drive businesses further, and in order to achieve those results managers set objectives for individuals in the form of expectations. PM is considered with enabling those expectations to be defined and agreed in terms of what expected from an employee to do (roles and accountabilities), what skill required to have, and how they are expected to behave. In the light of these terms, managers are required to encourage employees to endorse corporate values. In this short introduction to PM, we will cover the topics such as what PM aims to achieve and the cycle that it operates within.

Objectives of performance management

It is a common mistake that performance appraisal (PA) is usually considered and the PM process itself. However while PA is a formal employee assessment, often carried out as a bureaucratic system, and considered as a dishonest annual ritual, PM process is wider and continuous, clarifies the expectations from employees and focuses on the future (Armstrong et. al). The ultimate objective of PM process is to develop the capacity of people and help them unlock their full potential, and by doing so achieving high organizational results.

PM process encourages continuous feedback, it involves managers and those who they manage acting as partners rather than subordinates. The PM process can be comprehended as a psychological contract between an employee and organization. The objective is not only achieving results but also emphasizing that PM should be something that is done for people and in partnership with them (Buchner, 2007). Managers should make sure that employees understand what is expected of that and that it is an agreement not a command.

The performance management cycle

According to Armstrong PM tend to be operated in three continuous steps:

• Performance and development agreements.

This forms the basis for development, assessment and feedback in the performance management process.

• Managing performance throughout the year.

Maybe one of the most crucial aspects of PM is that it is a continuous process. Most of the managers comprehend PM as something of a burden, and approach it as an additional workload. PM process should not be imposed on managers as something "special"? but instead it should be considered as a natural and important characteristic that every manager can posses.

• Performance review and assessment.

The extent to which PM process is successful or not can be depending on the performance review and assessment. This provides a focal point for the consideration of key performance and development issues. The criteria for reviewing performance should be balanced between:

• achievements in relation to objectives
• the level of knowledge and skills possessed and applied
• behavior in the job as it affects performance
• the degree to which behavior upholds the core values of the organization
• day-to-day effectiveness

PM reviews should be approached as an annual feedback meeting by managers. However they need be very careful since this meeting can affect employees to different extents. These meetings will only be effective in a type of culture that supports open-minded, result oriented approach. This also underlines fact that top management's support is undeniable and there a need to take special care in developing and introducing the system and training the managers and their teams.

Mostly PM schemes consist of different forms of rating that is usually carried out during or after the performance review meeting. The rating scales are very difficult to make sure that the consistent approach is adopted by managers. The methods for increasing consistency can be:

• trainings
• calibration (peer reviews)
• monitoring
• forced distribution
• forced ranking

Conclusion

Companies that hire great teams or outsource the services that they need to implement performance management processes should take into consideration that the main reason the PM process fails is that line managers are either not interested or they lack the skills required, or both. To gain the support of the top management is very crucial so that their leadership can encourage line managers. With right trainings, by involving them in the processes, creating the right cultural environment with the right leadership line managers can conduct a quality and proper PM process.

In this process the expectation of all parties should be met: employees, managers and the organization itself as a whole.