Comparative Analysis of Performance Management Effectiveness

The purpose of this assignment is to analyse and compare two articles that relate to performance management effectiveness within an organisation. Performance management refers to a range of different activities that are undertaken by the organisation to improve the performance of individuals, with ultimately the purpose of improving the overall effectiveness of the organisation (Denisi, 2000). Both articles suggested that performance management is a key driver for implementing new strategies and continues to help with the development of the organisation however; in turn both also stated that there are high levels of dissatisfaction and many inconsistencies had been established in regards to its effectiveness. The involvement of senior management was also a similarity that was identified within both articles. The differences that were identified throughout the articles were simply the methods each used to promote performance management effectiveness within the workplace. One article believed strategic and tactical goals was more effective then the other article, which stated that employee recognition, was more effective overall.

The article ‘Performance management effectiveness: Lessons from world leading firms’ uses the signaling theory to suggest that when firms promote certain facilitating practices in turn it has an effect on the effectiveness of the performance management systems. The framework uses four performance management system facilitators that push managers attention towards performance related issues. Firstly, while many firms refer to practices such as performance evaluation or feedback as the core component of performance management a more comprehensive approach may reflect the firms view of performance management not just as a tactical tool but also as a strategic one. Secondly, senior management involvement may contribute to the overall success of the system by means of a stronger alignment between the firm’s strategies and its HR practices (Wright & McMahan, 1992). Thirdly, a clear communication path during the implementation of a system may assist employees in understanding what is expected from them and why their efforts are important to the organisation and finally formal rater training shows the firms efforts in trying to keep performance assessments impartial. Research shows that trained managers were found to be more knowledgeable of performance appraisal procedures and their discussions were perceived more satisfying to employees when compared with untrained managers (Davis & Mount, 1984). The presence of these indicators shows that the organisation cares about performance management and in turn the effectiveness of the organisation overall.

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The article ‘performance management effectiveness: practices or context’ investigates the influence of practices and context on performance management effectiveness. The article outlines three performance management practices which include performance management training, multisource feedback and employee recognition as well as performance management contextual factors which included culture, climate and the strategic integration of human resource management in which performance management is implemented. The main issues outlined throughout the article are related to overall performance management effectiveness rather then on specific design interventions. Studies throughout the article have stated that too much time and effort is placed on the design of the system and not enough is being placed on the implementation process (Posthuma & Campion, 2008). This proving that the main purpose of this article is to help managers improve the functioning of their specific employee performance which involves setting goals, coaching, ongoing feedback, regular performance appraisals and employee development.

The first similarity identified within both articles is that performance management is a channel for implementing new strategies and continues to expand the development of the workforce (Lawler & McDermott, 2003) however, research has suggested that there is a high level of disappointment with the functioning of these systems and many irregularities have been established in regards to its effectiveness. The articles state that many companies are finding that their systems are not living up to their expectations and that these inconsistencies are linked to the lack of information given regarding the factors that could assist in improving the effectiveness of these systems. Another similarity that both articles had in common was the need for senior management involvement and performance management training. The articles state that performance management is likely to be more effective when senior management outlines this process as a fundamental and core procedure of the HR function and the organisation as a whole. Senior managers should undertake performance management training as it can assist with the delivery of performance management tasks to their employees, which in turn will help to gain a clearer assessment of overall performance effectiveness. Research showed that those closely involved with performance management processes are integral to the success or failure of the system and therefore should be trained correctly (Kanin & Bevin, 1992).

The first difference between the articles that was identified was the use of performance management as a strategic and tactical tool with the comparison of the use of employee recognition to met organisational goals. Throughout the article lessons from world-leading firms studies suggested that the use of performance management systems are designed to achieve a variety of different organisational objectives. These systems are designed to achieve strategic business objectives as well as being used to gather valid and useful information for making important HR decisions, including salary, employee retention and termination. The information gathered allows managers to provide on going coaching to employees by identifying their strengths and weaknesses as well as pointing out the causes of performance shortages (Cleveland et al, 1989). In comparison the article practices and context outlines that employee recognition assists organisations in meeting their goals. Employee recognition is seen to be reinforcing and has the capability of shaping the behaviour of employees as well as improving overall performance. Managers provide employees with behavioural penalties for their actions as a way of reinforcing the behaviour that they want to encourage to improve the effectiveness of the system. This same article also suggested that organisational culture plays an important role in ensuring the effectiveness of performance management systems. The organisation will receive more positive performance outcomes when employees believe they are valued within the organisation and when a higher emphasis is placed on the employee’s commitment to their jobs.

In conclusion, both articles outlined that implementing a performance management system assists with the development of the organisation however; research has shown that there are high levels of dissatisfaction with the functioning of the system and inconsistencies occur due to a lack of information and minimal training options. The differences identified throughout each article were simply the methods that each believed were effective in implementing the system. The comparison was made between the use of strategic and tactical goals and the use of employee recognition in order to improve the effectiveness of performance management systems.

Reference List:

1. Cleveland, J.N., Murphy, K.R., and Williams, R.E. (1989), ‘Multiple Uses of Performance Apprasial: Prevalence and Correlate,’ Journal of Applied Psychology, 37, 439-452.
2. Davis, B., and Mount, M. (1984), ‘Effectiveness of Performance Appraisal Training Using Computer Assisted Instruction and Behaviour Modelling,’ Personnel Psychology, 37, 439-452.
3. DeNisi, A.S. (2000), ‘Performance Apprasial and Performance Management: A Multilevel Analysis,’ in Multilevel Theory, Research and Methods in Organisations, eds. K.J. Klein and S.Kozlowski, San Francisco, CA: Jossey-Bass, pp.121-156
4. Kanin, J., and Bevan, R. (1992), ‘Don’t Evaluate Performance – Manage It,’ Journal of Compensation and Benefits, 7, 51-54.
5. Lawler, E.E. III, and McDermott, M. (2003), ‘Current Performance Management Practices: Examining the Varying Impacts,’ WoldatWork Journal, 12, 2, 49-60.
6. Posthuma,R.A., and Campion, M.A. (2008), ‘Twenty Best Practices for Just Employee Performance Reviews,’ Compensation and Benefits Review, 40, 47-55.
7. Wright, P., and McMahan, G. (1992), ‘Theoretical Perspectives for Strategic Human Resource Management,’ Journal of Management, 18, 295-320