Successful Performance Management System

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The success and sustainability of an organisation depends on performance of the organisation and how the goals of the organizations are being met in an efficient and effective manner. Effective utilisation of performance management system is critical to increase organisational performance, so as to attain a competitive position in global marketplace (Kovacic, 2007; Neely, 2005; Guler et al., 2002; Neill and Rose, 2006 and Franceschini et al., 2010). A successful performance management system assures that work performed by employees achieve the goals and mission of the organisation and that employees have a clear understanding of what is expected of them. Some of the popular performance management systems used by manufacturing industries are:…show more content…
Hence, a performance management system is construe as a broad set of functions, which include performance appraisals, feedback, counselling, coaching, reward systems, career planning and training and development. Managers in organizations carry out performance appraisals to measure both the actual and potential performance of current and future employees (Bartram, 2004). Organizations need to provide continual financial support to maintain the performance management system and offer incentives for superior performance. Managers are supposed to appraise their employees on measures inferred from the internal requirements of their organizations. This process depends heavily on job analysis and job evaluation information, which is specific to the organization. The findings of the study shows that financial support has a significant positive effect on the functions of a performance management system, because the hygiene factors can motivate an employee to work more effectively and efficiently in order to achieve organizational objectives Minette, K. A. (2004). (B. Sripirabaa,…show more content…
Research has shown that regular utilization of a performance management system (PMS) leads to improved results (Hoque and James, 2000; Ahn, 2001; Sandt et al., 2001; de Waal, 2002; Bauer et al., 2004; Malina and Selto, 2004). The author said that majority of performance management implementations in organizations fail due to unclear objectives, and responsibilities. When studying the failures, it becomes visible that the biggest issue is not in defining CSFs, KPIs or a BSC but in getting people in the organizations to actually start the process, and more important, keep using the system so sustainable benefits are achieved. The strategic performance management development cycle composed of three stages. When applying the strategic performance management development cycle in a systematic way the organization will be confident that it works on all facets of a successful performance management implementation. In the first stage launching the strategic structure of the PMS, where the organizational goals and job responsibilities are communicated to the employees, in the second stage designing the reporting structure, that who will report to whom and in the third stage creating the culture needed to become a performance-driven organization. (Waal,

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