Performance Management Theory

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Performance Management “If you take care of your employees, they will take care of your business.” Richard Branson. Performance management is a management activity tasked with enabling employees to perform their roles in the most efficient and effective manner possible. Employees are the most vital part of any organisation and successful performance management can develop a competitive advantage within a business. There are many scholarly definitions of performance management in which to draw from, Armstrong and Baron (1998) describe it as “a process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance. As such, it establishes shared understanding about what is…show more content…
Evolution of Performance Management: It is intrinsic within human nature for people to rate and evaluate each other. This can be from a young age in children playing sport together and picking teams, wanting the perceived best people on their team. This selection is an evaluation on a very base level. According to Armstrong and Baron (2007) “Modern performance management” was first introduced in the 1970’s but they state that “it is not precisely known when formal methods of reviewing performance were introduced”. The idea of appraising the performance of an individual has existed for many years and can be traced back to the reign of the Wei Dynasty in third-century China (Eichel and Bender, 1984). An “imperial rater” was appointed in order to monitor and evaluate the performance of the royal family. Armstrong (2009) states that in the 16th century a formal system for rating members of the Jesuit religious order under Ignatius Loyola was…show more content…
As such it establishes a shared understanding of what is to be achieved and an approach to leading and developing people that will ensure it is achieved”. Other scholars define the performance management as a more operational with Briscoe and Claus (2008) stating that “Performance management is the system through which organisations set goals, determine performance standards, assign and evaluate work, provide performance feedback, determine training and development needs and distribute rewards.” Work by Bevan and Thompson (1991) commented that performance management systems are integrated processes that combine various human resource processes with the objectives of the organisation. As cited by McMahon (2009), Bevan and Thompson outline a description of a “textbook” performance management system that includes, • A shared vision of the organisation’s objectives communicated via a mission statement to all employees. • Individual performance targets which are related to operating unit and wider organisational

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