A good performance management system always works in improving the performance of any company or an organization. An effective performance management system (PMS) plays an important role in managing the overall performance. Performance Management System contributes in organizational benefits, employee benefits and has a positive influence on the job satisfaction and loyalty of the employees. A well managed performance management system has clearly defined goals and regular assessment of performance of all individual employees and hence helps in developing training and development plans required for the employees.
A well managed performance management system plays an important role in managing the performance in an organization by:
- Employees understand the importance of their contribution towards organizational goals and objectives.
- Each employee understands what is expected from them and ascertaining whether the employees possess the skills required to perform the duties.
- Ensuring proper alignment of objectives and helping in communication throughout the organization
- Helps in a cordial relationship between an individual employee and the manager based on trust.
- It also provides scope and opportunity for incentives, rewards, performance and career development.
- Based on the output of the employees performance management system helps to discover the training and development needs for the employees.
- It helps in strengthening the bond between management and subordinates.
Performance management practices can have a positive influence on the job satisfaction and employee loyalty by:
- Regularly providing open and transparent feedbacks to the employees.
- Establishing a clear link between performance and compensation
- Providing sufficient learning and development opportunities by representing the employees in leadership development programmes, etc.
- Evaluating performance and distributing incentives and rewards on a fair and equated basis.
- Establishing clear performance objectives by facilitating an open communication and a joint dialogue.
- Recognizing and rewarding good performance in an organization.
- Providing maximum opportunities for career growth in the organization
Given below are the few Importance factors of performance management system
- Performance management system helps in reducing conflicts among peers and the subordinates and thus helps in improving the performance.
- All the employees including supervisor and managers would be highly motivated.
- It helps to improve the organizational performance and helps in retaining employees and improving their productivity.
- Motivated employees would be more loyal and thus management will have valuable employees
- Performance management system helps in achieving job satisfaction
- It provides ample learning opportunity and helps in career growth of the employees.
- The employees will grow in maturity and responsibility if their efforts are judged
- An employee who gives low output can be spotted and dismissed with more certainty. Similarly high performing candidate can be rewarded which would be more fair and accurate.
Why is Performance Management so important? (2014). YouTube.
HrHelpboard. (n.d.). Benefits and Importance of Performance Management System. [online]
Managementstudyguide.com. (2015). Benefits of a Performance Management System. [online]
Ajith, what are the disadvantages of performance appraisal?
ReplyDeleteThere are few disadvantages of performance appraisals.
DeleteEmployees could quit based on unfair results.
Fabricated or misleading information can affect the review.
Employee morale may drop.
Resources—including time and money—are wasted.
Employees become demotivated.
Job satisfaction drops and employees become burnt out.
Why Performance Management Important?
ReplyDeletePerformance Management helps you to identify your strengths and weaknesses. It also allows for opportunities to hear and exchange views and opinions away from the normal pressures of work.
DeleteDear Ajith, What is the optimal outcome for performance management?
ReplyDeleteThe performance management process should provide feedback on what the individual is doing well and what can be done better or differently. It is the basis for improved performance and overall professional development.
DeleteWhy Performance appraisal play major role in promotions?
ReplyDeleteSearch Results
DeleteFeatured snippet from the web
Performance appraisal plays significant role where promotion is based on merit and seniority. Performance appraisal discloses how an employee is working in his present job and what his strong and weak points are. In the light of these, it can be decided whether he can be promoted to the next higher position
What is the difference between performance management and performance appraisal?
ReplyDeletePerformance management is about actually helping an employee to develop and increase his performance and productivity. Performance appraisal evaluates the actual performance of the employee, but it does not focus on the employee's performance productivity.
DeleteHi Ajith, What is your opinion about current performance evaluation system.
ReplyDeleteIn our organization with regard to the current performance evaluation system, I am ok with it.
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