HRM3706 PERFORMANCE MANAGEMENT Exam preparation

PERFORMANCE MANAGEMENT (HRM3706) STUDY UNIT 1: CHAPTER 1: PERFORMANCE MANAGEMENT AND REWARD SYSTEMS IN CONTEXT The Shift From Performance Assessment To Performance Management Performance assessment has a long history based on comparative judgements of human worth. Modern performance assessment developed from sophisticated rating systems designed by work psychologists for military use during the two world wars. Performance assessment was initially used for promotions, salary increases, and discipline (Price 2011:402). Fletcher and Williams (1992:5-8) provide an overview of the development of performance management. They trace the origins of performance management as far back as the First World War, focusing on the period since the 1950s, a decade that involved personality-based appraisal. The focus then was on evaluating performance, but with no intension of improving it. Fletcher and Williams (1992) further observe that, in the 1960s, appraisal practices shifted to a greater emphasis on goal-setting and assessment of performance-related abilities (and more recently, competencies) rather than personalities. The late 1980s and the whole of the 1990s saw organisations undergo a process of rapid and successive change. Almost inevitably, what Fletcher and Williams (1992) call “performance appraisal” became a central mechanism in a more holistic approach towards managing people and business in general. According to Mello (2015:438), the terms “performance evaluation” and “performance appraisal” imply a one-sided judgemental approach to performance management, where employees have limited involvement in the process. Traditional performance appraisal simply involves evaluative supervisory comments on the past performance of employees. According to Houldsworth and Jirasinghe (2006:6–7), things shifted again in the 1990s, when performance management began to be seen as more of a core management process, growing out of its “appraisal” box, and developing into an integrated, strategic and grown-up concept. In summary, the practice that we today know as performance management developed from humble beginnings some 60 years ago. During those early days, the emphasis was on individual competencies of employees. Over the last couple of decades, this has developed into a more sophisticated organisational function. Today, performance management is a fundamental part of a company’s HRM system and recognised as a HR activity contributing to the achievement of the strategic goals of the organisation. Performance Management: Definition 1. Continuous process of  Identifying, measuring and developing performance of individuals and teams  Aligning performance with strategic goals of an organisation  Process of setting goals and objectives, giving & receiving on-going coaching and feedback 2. Alignment with strategic goals  Managers to ensure that employee act & outputs are congruent with  organisation goals  Help organisation gain competitive advantage  PM creates direct link between employee performance and organisation goals