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Performance Management - Concept

A subjective view on any topic contains inherent dangers. The view is singular and not examined by others. The objective view provides a safety mechanism. Plato believed in the mechanism of dialogue to promulgate his ideas and that of Socrates. The jury in a criminal trial could be described as a prime example of objective thinking in a situation whereby a defendant's liberty is at stake.

At work, an employee may subjectively feel that he/she is carrying out the duties for which they were engaged, in a satisfactory manner. However, those above that employee and indeed those around, may feel, objectively, that the employee is not carrying out those duties satisfactorily. If there is no feedback from management to employee on their progress, then the employee will never realise that some aspect of their work is wanting. We will proceed on the basis that the employee is not deliberately working beneath his/her capacity.

If the employee develops bad professional habits that go unchecked, three consequences will occur:

  • Such habits, if not effectively checked, grow to become conduct that may result in the employee being disciplined or dismissed
  • The organisation is not addressing issues of quality of performance and thereby puts the quality of product or service into question
  • There will be no opportunity for the employee's improvement, recognition or development

Performance Management is the mechanism that ensures that the employee achieves the objectives set by the organisation and the organisation thereby achieves the objectives that it has set itself in its strategic plan.

When considering Performance Management, it is necessary to set out some basic terms:

  • Effective behaviour - the carrying out of activities
  • Effectiveness of Performance - the level of the activities performed
  • Criteria - the standards set by the organisation for the activities

Effective Behaviour


Effectiveness of Performance



Organisation sets standard or criteria for activities

Lansbury (1988) identifies the ?mutuality? that exists between the organisation and the employee through the practice of performance management :





Feedback Recognition Development

Organisational objectives achieved

Douglas McGregor sets out the functions of an organisation?s Performance Management system :

  • The provision of systematic judgements to support salary increases, promotions, transfers, demotions and terminations
  • A means of informing an employee of his/her progress and indicating necessary changes in behaviour, attitudes, skills, job knowledge and his/her position viv-a-vis his/her immediate superior.
  • A means of the basis for the coaching and counselling of the employee by their superior.

Two basic factors must be in place before a successful performance management system is put in place:

  • Organisational strategy and
  • The support of management

Referring to organisational strategy Dick Grote says :

"An organisation's overall performance management system begins with the development of organisational strategy. Before an assessment of individual performance can be made, the organisation's direction must be articulated and communicated". Thereafter departmental objectives will be established and ideally there will be the development of a HR strategy. Finally, individual objectives for employees will be established.

Rudman quotes one chief executive:

"We have found that performance appraisal cannot function as a stand-alone system. Similarly, a strategic plan that does not somehow directly affect each employee's daily activities and performance cannot get out of the starting gate. Senior management will merely be conducting a paper chase if its performance appraisal system is not sychronised with the organisation's strategic plan and developed in harmony with each staff member's position description".

The next issue is that of the support of management. Without management support the performance appraisal process will fail. Where an organisation does not have a performance appraisal system, there may be some resistance from those who have to carry out performance appraisals. This resistance may be toppled by a senior management linking the performance appraisal system with the organisational strategy. Outside consultants could be used to present the

Bevan and Thompson (1991) believe that a 'text-book' performance management system would contain the following features :

  1. Corporate strategies


  1. Departmental strategies


  1. Individual performance planning and review


  1. Individual position descriptions


  1. Individual action plan

Grote also sets out what issues that have to be established before any performance appraisal takes place :

Key Accountabilities:





  • The major areas with which the employee is responsible for getting results
  • The employee will achieve within each accountability area
  • Used to evaluate how well the employee has achieved each objective
  • Competencies or behaviours critical in determining how results will be achieved
  • Elements of which the employee will complete during the year

The next issue Grote examines is what are the respective responsibilities of both Manager and Employee in respect of Performance Appraisal:



  • Create conditions that motivate
  • Observe performance
  • Update objectives
  • Provide feedback
  • Provide development
  • Reinforce behaviour
  • Commit to goal achievement
  • Solicit performance feedback and coaching
  • Communicate openly
  • Collect data
  • Prepare for reviews

One of the problems that will befall a HR practitioner is when an employee is failing to achieve the objectives set by the organisation. The practitioner must ask whether the failure is due to :

  • A personal problem 
  • A performance problem

If the failure is due to a personal problem then enquiries have to be made as to the source of the problem. Is the problem:

  • Domestic: Matrimonial or bereavement 
  • Professional: A clash of personalities, either vertically or horizontally

If the failure is due to a Performance problem then the next issue to resolve is whether the problem is an:

  • Unwillingness
  • Inability

Is there an element of volition or capacity ? Each requires discrete approaches.

If the issue is one of capacity the issue of training and development is then raised.

The employee is:

  1. Failing to achieve all objectives
  1. Achieving all objectives: No problem
  1. Performance problem
  1. Personal problem
  1. Inability - a lack of capacity
  1. Lack of training
  1. Personality clash: vertical; horizontal
  1. Domestic Problem: Matrimonial Bereavement

Fig 1

Clearly, as will be seen in Fig 1, there are issues that are within the remit of HR and others that HR have no control over. Where HR does have the capacity to deal with the performance problem, then the sooner the problem is tackled then the following consequences will ensue:

  • the employee will then be achieving objectives set by the organisation;
  • the organisation will be able to demonstrate in the event of disciplinary or even dismissal proceedings that they took all reasonable steps to address the issue of the employees performance problems.

There exist various methods of carrying out performance appraisal. All appear to have their virtues and each is appropriate to particular types of organisations. Some key terms should be identified at the outset.

Skills - abilities that are:

  • Measurable
  • Observable

Which have been developed through:

  • Practice
  • Training
  • Experience
  • Competence - "a motive, trait, skill, aspect of one's self-image or social role, or a body of language" Boyatzis (1982). "The set of behaviour patterns that the incumbent needs to bring to a position in order to perform its tasks and functions with competence" Woodruffe (1990)

Grote identifies a number of performance appraisal methods:

  • Job Performance model
  • Situation analysis
  • Performance-focused approach
  • Behaviour-based appraisals
  • Results-focused appraisal techniques
  • Global performance appraisal techniques

Rudman identifies the following methods:

  • Forced distribution
  • Ranking methods
  • Behaviourally-anchored rating scales (BARS)

A fundamental question to be answered when addressing issues of performance is what is actually being reviewed. Rudman identifies two basic issues:

  • Personality - does a person have drive and motivation where these are traits relevant to the particular position?
  • Competency - described by Jacobs(1989) as "an observable skill or ability to complete a managerial task successfully."

Like any process there may be difficulties in establishing a performance appraisal system. Here are some key points:

  • If there is no or reluctant management buy-in then the whole process may be doomed
  • Has the organisation formulated corporate objectives and departmental objectives?
  • Should there be a project team to initiate the process and from what part or level of the organisation should they be chosen?
  • The group assigned to deal with the implementation of have not had any or sufficient training on performance management
  • There may not be sufficient time given by the organisation devoted to the project
  • Some tasks may be immeasurable and could be the subject of more subjective consideration

A well-run performance management system will have the effect of focusing those in an organisation on organisational, departmental and individual objectives and will also provide evidence in the event of a personal grievance to support a dismissal.


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Disclaimer: This information has been written for and submitted to HRINZ for publication and has been published in good faith for the general information of HRINZ Members of the Institute. HRINZ accepts no legal responsibility for the contents of the Knowledge Base and appropriate professional advice and assistance should be sought in particular cases.

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