BULACAN STATE UNVERSITY

City of Malolos

Human Resource Management

BSLM 2-B

REVIEW OF RELATED LITERATURE

APA Format

Name(s):
Aquino Rojahn Kayle B
Lopez Mark Oliver DC

Chosen Topic:
PERFORMANCE MANAGEMENT
Date of Submission: December 5, 2023

STUDIES IN THE JOURNAL (FOREIGN AUTHOR)

Reference:
Folan, P., & Browne, J. (2005). A review of performance measurement: Towards
performance management. Computers in Industry, 56(7), 663–680.
https://doi.org/10.1016/j.compind.2005.03.001
Verbatim Text:

Organizational performance has always exerted considerable influence on the actions

of companies. Consequently, the ways and means of accurately measuring this
performance is perceived as being an increasingly important field of research for both
organizations and academics alike. Indeed, in the last 15 years or so performance
measurement (PM) has been seen to occupy the minds of academics in an ever-
increasing number of fields. The mid to late nineties seem to have seen the peak of this
activity. Neely [63] estimated that between 1994 and 1996, some 3615 articles on
performance measurement were published alongside the statistic that in 1996 books on
the subject appeared at a rate of one every 2 weeks in the USA alone. A vast array of
disparate information concerning PM has been made available through the efforts of a
number of researchers in different functional silos [58] and the field is now well
recognized as being an important part of the manufacturing strategy literature [20]. As a
consequence of this flourishing PM research, however, organizations and academics
are facing a comprehension predicament: it has been suggested that the multi-
disciplinary character of the research is hindering developments in the field of PM [58],
[64]; while the fact that PM is not owned by academics in any particular discipline has
resulted in a reluctance to leave behind traditional functional boundaries when research
upon the topic is performed [63]. The results have been an abundance of isolated PM
information produced that may be duplicated and/or contradictory in nature.

PM is also evolving at a considerable rate to combat new organizational realities; owing

to the fight for industrial supremacy, the concept of performance, as it is measured and
evaluated, is undergoing a transformation in modern business organizations. The
external environment is becoming identified as the next frontier of PM: in the coming
years, there is expected to be a significant increase in inter-organizational PM
developments—such as supply chain PM, and, more particularly, extended enterprise
PM. The extended enterprise is a formation of closer co-ordination in the design,
development, costing and the co-ordination of the respective manufacturing schedules
of co-operating independent manufacturing enterprises and related suppliers [37]; and
is the consequent result of a move away from the traditional view of manufacturing
companies with clear boundaries, limited relationships with other companies and a
focus on internal efficiency and effectiveness only [15]. This is having a profound impact
upon PM practices in many organizations—an impact that is starting to be felt in the PM
literature.

Interpretation / Explanation:
Over time, organizational performance has had a significant impact on business
decisions. As a result, there is a growing understanding that precisely gauging this
performance is an important area of research for academics and organizations alike.
Over the last fifteen years, academics from a wide range of disciplines have become
more and more interested in performance measurement, or PM. This surge in activity
seems to have peaked in the middle to late 1990s.according to Neely(63) calculated
that about 3615 articles on performance measurement were published between 1994
and 1996. He also noted that, in the USA alone, books on the topic were coming out
once every two weeks in 1996. A variety of researchers working in various functional
silos [58] have made a diverse array of resources available. Various researchers in
different functional silos (58) have contributed to the availability of a diverse range of
information on PM, solidifying its recognition as a significant component of the
manufacturing strategy literature (20). Even with the growing body of research in PM,
organizations and scholars are currently facing a comprehension dilemma. Advances in
the field of PM have been suggested to be hampered by the multidisciplinary nature of
the research [58], [64]. Furthermore, during research on the subject, academics in any
particular discipline have not taken ownership of PM, which has made them reluctant to
cross conventional functional boundaries [63]. As a result, there is an abundance of
discrete PM data that may show contradictions or duplication in its source. In addition,
PM is changing quickly to meet the demands of modern organizational realities.
Performance is changing as a result of the continuous struggle for industrial supremacy,
which is changing how performance is assessed and measured in contemporary
corporate settings. With a predicted spike in inter-organizational PM developments in
the upcoming years, the external environment is starting to emerge as the next frontier
in project management. This covers topics like extended enterprise PM and, most
notably, supply chain PM. In the extended enterprise, related suppliers and
collaborating independent manufacturing businesses closely coordinate the design,
development, costing, and scheduling of manufacturing schedules [37]. This departure
from the conventional understanding of manufacturing organizations, which is defined
by distinct divisions, constrained interactions with other businesses, and an emphasis
exclusively on internal efficacy and efficiency.

STUDIES IN THE JOURNAL (FILIPINO AUTHOR)

Reference:
Torneo, A. R., & Mojica, B. J. (2019). Performance-based management in the
Philippine bureaucracy. Social Science Research Network.
https://doi.org/10.2139/ssrn.3851462

Verbatim Text:
The bureaucracy pertains to the administrative system designed to accomplish large
government undertakings by systematically dividing tasks and coordinating work. It also
pertains to the government organizations, composed of non-elected officials and
personnel, tasked with the implementation of public policies. It is the direct interface
between citizens and the state that translates abstract ideas and public policies into
directives and concrete action. Thus, the performance of the bureaucracy is critical for
good governance. Unfortunately, bureaucracies, especially in developing countries are
often criticized for rigidity, slowness, and inefficiency to the point that the term
“bureaucratic” has developed a negative connotation. Governments address these
issues though reforms and the adoption of management strategies. One such strategy
is the adoption of performance management systems (PMS) that monitor, evaluate, and
steer personnel and organizations towards desired targets and policy objectives. An
effectively implemented PMS is argued to address inefficiencies, motivate personnel,
and contribute to a well-functioning bureaucracy. Curiously, while the Philippine
bureaucracy is often criticized for inefficiency and corruption, among other problems,
there are few studies on this topic that explain how and why this is supposedly the
case. There are also few studies on whether interventions in the form of PMS actually
work. This study aims to fill this gap by providing an examination of the Philippine
government’s PMS and explore its possible impacts and implications on governance. It
will examine performance management (PM) in the context of the recent government
attempts to harmonize existing performance evaluation and incentive systems, adopt a
strategic PMS, improve the salaries of public personnel, and incentivize performance.

Given the large size of the bureaucracy, performance management is a challenge. The
Philippine bureaucracy has undergone several shifts in PMS in the past 60 years. In
1963, the government took an accountability approach to performance management by
implementing a performance rating scheme for all government employees. Fifteen
years later, the government shifted and took a management by objectives approach to
further align employees with organizational goals. By 1993, the CSC, the agency in
charge of setting and implementing policies pertaining to the hiring, promotion, and
management of public sector personnel, introduced a more comprehensive evaluation
system which attempted to objectively measure an employee’s performance and
behavior in the work place. To gain a holistic view of the employee’s performance, the
CSC established a multisource rating scheme in 1999, however this practiced proved to
be too complex, and the Philippine bureaucracy shifted PMS again in 2005. The focus
of the shift in 2005 was aligning employees to organizational goals as well as increasing
employee accountability. This was supposed to be accomplished by cascading goals,
employee contracting, and a tiered evaluation system. The PMS in the Philippine
bureaucracy has become more complex and each iteration built on past PMS
evaluation. Despite this, the views regarding PMS have remained relatively the same.
In general, the perspective of PMS focused more on employee evaluation, rather than
development. Past systems aimed to ensure that employees were effectively working
within the system and held accountable for their work. This is proven by the fact that the
old systems mainly utilized ratings, such as the New Performance Appraisal System,
the Management by Objectives and Results Evaluation, the Performance Evaluation
System (PES), and the 360- degree Evaluation System to evaluate employee
performance. This is further supported by the fact that these systems stressed
accountability more so than the development of employees. The motivation techniques
of past PMS mainly relied on extrinsic motivators, more specifically pay-for-
performance. The performance-based budgeting model known as the Organizational
Performance Indicator Framework (OPIF) stated that a carrot and stick approach
should be used to ensure management on a performance basis (Llanto & Brownette,
2007). Furthermore, past systems such as the Performance Evaluation System and the
Performance Management System-Office Performance Evaluation System (PMS-
OPES) identify pay-for-performance as the foundation for their system on performance
management. It relied heavily on pay-for performance incentives to motivate
employees; this practice can subconsciously influence the alignment of organizational
goals and employee behavior

Interpretation / Explanation:
By methodically assigning and coordinating work, the bureaucracy functions as the
administrative framework responsible for carrying out large-scale government projects
in an efficient manner. It consists of non-elected officials and serves as a bridge
between the people and the government, putting public policies into practical
application. Governments address these issues through reforms and management
strategies, such as the implementation of performance management systems (PMS).
Despite its crucial role in governance, bureaucracies—especially in developing
countries—often face criticism for perceived rigidity, sluggishness, and inefficiency,
leading to a negative connotation of the term "bureaucratic." Performance management
systems (PMS) are intended to track, assess, and direct individuals and groups toward
predetermined goals and policy objectives. It is thought that properly implemented PMS
resolve inefficiencies, inspire employees, and support an efficient bureaucracy. Despite
accusations of corruption and inefficiency in the Philippine bureaucracy, there are
surprisingly few studies examining the causes of these problems and assessing the
efficacy of solutions, especially when it comes to PMS. By analyzing the PMS of the
Philippine government and looking into its possible effects and ramifications on
governance, this study seeks to close this gap. This analysis will center on performance
management (PM) in light of recent government initiatives, such as efforts to adopt a
strategic PMS, raise public employee salaries, and incentivize performance. These
initiatives also aim to harmonize current performance evaluation and incentive systems.

BOOK (FOREIGN AUTHOR)

Reference: Pulakos, D. & society for human resource management [SHRM
Foundation]. (ca. 2004). Performance management: A roadmap for developing,
implementing and evaluating performance management systems (1st ed.) [Pdf]. SHRM
Foundation.

Verbatim Text:

Performance management systems, which typically include performance appraisal and

employee development, are the “Achilles’ heel” of human resources management. They
suffer flaws in many organizations, with employees and managers regularly bemoaning
their ineffectiveness. A recent survey by Watson Wyatt showed that only three out of 10
workers agree that their company’s performance management system helps improve
performance. Less than 40 percent of employees said their systems established clear
performance goals, generated honest feedback or used technology to streamline the
process. While these results suggest that there may be poorly designed performance
management systems in many organizations, it is typically not poorly developed tools
and processes that cause difficulties with performance management. Rather, difficulties
arise because, at its core, performance management is a highly personal and often
threatening process for both managers and employees. Managers are reluctant to
provide candid feedback and have honest discussions with employees for fear of
reprisal or damaging relationships with the very individuals they count on to get work
done. Employees feel that their managers are unskilled at discussing their performance
and ineffective at coaching them on how to develop their skills. Many complain that
performance management systems are cumbersome, bureaucratic and too time
consuming for the value added. This leads both managers and employees to treat
performance management as a necessary evil of work life that should be minimized
rather than an important process that achieves key individual and organizational
outcomes. In spite of the difficulties, performance management is an essential tool for
high performing organizations, and it is one of a manager’s most important
responsibilities, if not the most important responsibility. Furthermore, done correctly,
performance management can result in numerous important outcomes for an
organization, its managers and employees. The goal of this booklet is to provide human
resource (HR) professionals with useful guidelines for developing and implementing
effective performance management systems.

Interpretation / Explanation:

According to the author, Pulakos(2004) Human resources management's "Achilles'

heel" is performance management systems, which usually include employee
development and performance appraisal. They have shortcomings in many
organizations, and managers and staff frequently lament their inefficiency. A study
conducted by Wyatt(2009) revealed that just three employees out of ten believe that
performance is improved by their company's performance management system. Less
than 40% of workers reported that their systems used technology to expedite
procedures, produced honest feedback, and set clear performance goals. Although
these findings imply that many organizations may have badly designed performance
management systems, problems with performance management are usually not the
result of subpar tools and procedures. Instead, issues come up because performance
management is fundamentally a very private and frightening procedure for managers
and staff alike. Because they are afraid of facing backlash or jeopardizing their
relationships with the very people they depend on to complete their work, managers are
hesitant to give direct feedback and hold open discussions with staff members. Workers
believe that managers are incompetent in discussing their performance with them and
inefficient in providing them with skill development coaching. Performance management
systems are criticized by many for being time-consuming, bureaucratic, and
burdensome compared to their added value. This causes performance management to
be viewed by both managers and workers as a necessary evil of the workplace that
should be avoided rather than as a crucial procedure that produces important results for
both individuals and the organization. Not withstanding the challenges, performance
management is a crucial instrument for high-achieving companies and one of, if not the
most, a manager's most significant duties. When implemented properly, performance
management can also have a number of significant positive effects on an organization's
managers, staff, and overall performance. This booklet's objective is to give human
resource (HR) professionals practical advice on how to design and execute efficient
performance management systems.

BOOK (FILIPINO AUTHOR)

Reference: Dalanon, J. (n.d.). A Philippine rural school’s organizational climate,
teachers’ performance, and management competencies. https://eric.ed.gov/?
id=ED581405

Verbatim Text:
Relative to the concept of organizational climate, it is significant to recognize strategic
management. Strategically managed employees in an organization does seem to make
a distinction in how well the group functions. Knowing the reason for success or failure
of firms and their varying levels of performance is an essential stratagem. Findings of a
study conducted among faculty members of a rural, tertiary school in Cebu, Philippines
implied that managers should recognize and comprehend the wants and pursuits of his
workers. To satiate foremost their wants and interests is to inspire them to grasp
ultimate functioning. The encouraging element is not only an elevated wage.
Acknowledgement, belongingness, and integrity are other factors which people want to
satiate. Staffs and personnel who are content or fulfilled are blissful, which renders
them productive. And the job of the manager is to lead them to greater efficiency
(Magdadaro, 2009).

Interpretation / Explanation:

Understanding the idea of strategic management is crucial in relation to the atmosphere

of the organization. Group performance seems to be significantly impacted by an
organization's ability to manage its workforce in a way that is consistent with its
strategy. Determining the causes of businesses' successes or failures as well as their
disparate performance levels is an essential tactic. The findings of a survey given to
faculty members at a remote university in Cebu, Philippines, indicate that managers
ought to pay close attention to and understand the needs and goals of their staff
members. Meeting their core needs and interests not only inspires them but also
improves productivity. It takes more than just paying more to make people happy; they
also need to feel respected, like they belong, and have integrity.

UNPUBLISHED THESIS/DISSERTATION (FOREIGN AUTHOR)

Reference: Liesel Antoinette, C. (2013) The Performance management system of the
Department of Economic Development and Tourism.
https://core.ac.uk/download/pdf/148365507.pdf

Verbatim Text:
Employees are “paid to perform”; therefore they are expected to do a certain amount of
work to a certain standard order to be paid at the end of each month. The paradox is,
however, that without the correct performance management systems in place, how will
their performance be measured? In order to manage employee performance, both the
employer and employee would have to know and understand the position’s purpose.
When looking at an employees’ job description, the key performance areas (KPAs) and
indicators (KPIs) establish a set of standards by which the employees’ performance
should be measured.

This can only be achieved by managing people, which entails planning employee
performance, facilitating the achievement of work-related goals, and reviewing
performance as a way of motivating employees to achieve their full potential in line with
the organisation’s objectives (Van Reenen, 2009).
Interpretation / Explanation:
Performance management aims to plan, manage, and improve an employee's
performance. It is critical that management begin the performance management
process by establishing clear work standards with employees individually from the start.
Employees should always be clear about what they are expected to accomplish in order
to feel more at ease in their positions.

Another critical component of a successful performance management system

implementation is training for both managers and employees. They should be educated
on the system's mechanics, such as problem solving and conflict resolution. This will
help them manage the system more effectively.

UNPUBLISHED THESIS/DISSERTATION (FILIPINO AUTHOR)

Reference: Resurreccion, P. (2012). Performance management and compensation as
drivers of organization competitiveness: The Philippine Perspective. ResearchGate.
https://www.researchgate.net/publication/301618783_Performance_Management_and_
Compensation_as_Drivers_of_Organization_Competitiveness_The_Philippine_Perspec
tive
Verbatim Text: Performance management and evaluation is a well-established
element of any organizational system of human resource management (McKenna,
Richardson and Manroop, 2011). Performance is described by Lebas (1995) as “the
potential for future successful implementation of actions in order to reach the objectives
and targets”. Meanwhile, performance management is the “process through which
managers ensure that employees’ activities and outputs contribute to the organization’s
goals” (Noe, Hollenbeck, Gerhart, & Wright 2010a, p. 215). Many contemporary
organizations are placing a greater emphasis on their performance management
systems as a means of generating higher levels of job performance (Gruman and Saks,
2011).Performance management systems, along with other human resource
management programs, directly impactkey organizational outcomes such as financial
performance, productivity, product or service quality, customer satisfaction, and
employee job satisfaction. This prompts for an adaptable performance management
system that is rooted to strategic goals if organizations aim for favorable results in these
success indicators.The idea of alignment makes the association between performance
and organizational competitiveness very clear. Empirically, this relationship has been
well established. Introduction of a performance management system in IT companies in
India has brought about the considerable impact on organizational effectiveness(Maiya,
Krishnamurthy and Sukhesh 2011).Performance measurement systems do mirror the
firms’ strategic objectives given stable operating conditions(Euske, Lebas and McNair
1993). Meanwhile, Evans (2004) postulates that a well-designed performance
measurement model, which includes deciding which measures and approaches for
examining and evaluating results are applicable, is essential in the alignment of an
organization’s actions with its strategic direction. Firms with more developed
performance measurement systems elicit better customer, financial, and market
performance.To ensure that the desired alignment between performance and the goal
of organizational effectiveness is achieved, some firms make use of modern
technology-based performance management systems (Carr and Hasan 2008),
benchmarking (Tantau, Fratila and Grigore 2010) and the balanced scorecard (Tatar
2011). If an enterprise can make best use of performance management in enterprise
management, performance management will play an invaluable role in the process of
achieving enterprise strategic objective (Chen 2011).

Interpretation / Explanation:
Performance management and evaluation represent integral facets of contemporary
human resource management systems within organizations Lebas (1995) defines
performance as the "potential for future successful implementation of actions in order to
achieve the objectives and targets," while performance management is defined as the
"process by which managers ensure that employees' activities and outputs contribute to
the organization's goals" (Noe et al., 2010a, p. 215). Recognizing the importance of
performance management systems in improving job performance, modern
organizations are increasingly emphasizing them (Gruman and Saks, 2011). Together
with other human resource management programs, performance management systems
have a direct impact on key organizational outcomes such as financial performance,
productivity, product or service quality, customer satisfaction, and employee job
satisfaction. This highlights the importance of an adaptable performance management
system based on strategic goals in order to achieve favorable results in these success
indicators.

Alignment emerges as a critical factor in comprehending the relationship between

performance and organizational competitiveness. This relationship has been empirically
established, with the implementation of performance management systems in Indian IT
firms demonstrating a significant impact on organizational effectiveness (Maiya,
Krishnamurthy, and Sukhesh, 2011). Under stable operating conditions, performance
measurement systems reflect firms' strategic objectives (Euske, Lebas, and McNair,
1993). According to Evans (2004), a well-designed performance measurement model
that includes the selection of relevant measures and evaluation approaches is critical
for aligning an organization's actions with its strategic direction. Companies with more
developed performance measurement systems outperform their competitors in terms of
customer, financial, and market performance. Some businesses use modern
technology-based performance management systems (Carr and Hasan, 2008),
benchmarking (Tantau, Fratila, and Grigore, 2010), and the balanced scorecard (Tatar,
2011) to achieve the desired alignment between performance and organizational
effectiveness. According to Chen (2011), when enterprises use performance
management effectively in enterprise management, it plays an invaluable role in the
process of achieving enterprise strategic objectives.