“Many of the things you can count , Don’t count. Many of the things you can’t count, reallyCount!” -Albert Einstein
Performance management is the systematic process of planning work and setting expectations,continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion and rewarding good performance
Although more and more organizations are using competency models and accompanying behavioural standards as a basis for performance management, there is also increasing focus on andimportance of evaluating employees’ results as part of the performance management process. Acritical issue faced by organizations is how to measure and evaluate results.PerformanceMeasurementcan be done in two ways : objective and subjective. Objective performance measuresinclude production data(dollar volume of sales, units produced, number of errors, amount of scraps),as well as employment data(accidents, turnover, absence, tardiness).These variables directlydefine the goals of the organisation, but, they often suffer from several glaring weaknesses, the mostserious of which are performance unreliability and modification of performance by situationalcharacteristics. The objective in performance appraisal should be to judge an individual’s performance and not factors beyond his or her control. Moreover objective measures focus not on behaviour, but rather on the direct outcomes or results of behaviour. Admittedly there will be somedegree of overlap between behaviour and results but the two are qualitatively different *.Finally, inmany jobs(e.g., those of middle managers),there simply are no good objective indices of performance, and, in the case of employment data(e.g. awards ) and deviant behaviours(e.g.covering up one’s mistakes),such data are usually present in fewer than 5 percent of the casesexamined**.Hence they are often useless as performance criteria.
In short, although objective performance measures are intuitively attractive, theoretical and practical limitations often makethem unsuitable. And, although they can be useful as supplements to supervisory judgements,correlations between objective and subjective measures are often low***.Consequently it is often not easy to predict employees’ scores on objective measures of performance. The disadvantages of objective measure have led researchers and managers to place
*(IIgen & Favero,1985) **(Landy & Conte 2004) *** Bommer, Johnson, Rich, Podsakoff & Mackenzie,1995:Cascio &Valenzi,1978:Heneman,1986).