RIDA SHAKIL

SP19-MBAG-0030
QUIZ 3 (19/04/2020)
How PM is critical for Firms?
Employees performance management refers to aligning the organizational objectives with the
employee’s skills, competency requirements, development plans and the delivery of results.
Performance management emphasizes on improvement, learning and development in order to
achieve the overall business goals and to create a high performance workforce.
Performance management dates back to 60 years where it began as a justification for income of
an employee based on their performance. This later is being used as a method to drive an
employee’s performance by providing rewards based on performance.
Over the years’ performance management has evolved and has become more formalized and
specialized. Some of the developments that have shaped Performance Management in recent
years are the differentiation of employees based on talent management, management by
objectives and constant monitoring and review.
Performance management in simple terms can be explained as the act of engaging with an
employee to review their ongoing workplace performance and development. It combines
information gathering through monitoring goals and its completion, feedback and discussions
with the employee. By examining and analyzing the strengths and potential for growth,
organizations can develop and management their talent. This in turns enhances an employee’s
performance and reduces work errors.
An effective performance management of its workforce has become very important for
organizations around the world. Through formal and informal processes, organizations align
their employees, resources, and systems to meet their strategic objectives. An effective
performance not only helps an organization to align its resources, but can also serve as a
competitive advantage. This happens because organizations pull their employees to their best
abilities and enable them to work in the same direction.
The world is changing rapidly, therefore, it is also important for an organization to keep its
performance management responsive to the rapid changes such as technologies, markets, or
competitive environments.
Though performance management is a function to be performed by the HR professionals with
inputs from the respective departments, it helps the HR by boosting employee engagement and
productivity. Moreover, it also reduces the turnover ratio and the cost incurred due to frequent
turnovers because engaged employees stay longer and engage themselves to produce better
results, thus achieving the organizational goal. A right performance management boosts
productivity and maximizes ROI; a better bottom line.
Every organization wants its employees to be enthusiastic and ambitious who perform their
duties well and exceed expectations. However, this cannot be true at all times. Therefore, an
organization needs performance management systems to show the employees that they have
the support required by offering training and development and delivering rewards and
recognitions.
However, it is not an easy task for organizations to have an effective performance
management. Because it has become essential than it ever was, organizations are moving
towards it. Proper tools must be used with proper knowledge and training provided to those
carrying out the performance management.
It is important to remain up to date with performance management trend and to frequently
interact with the employees to find out ways the performance management could be improved
because eventually they are the ones most concerned with it.