Increasing complexities in functions of business have lead to the emergence of new and comprehensive concepts in business management.
Understanding performance management
Performance management is a concept in the field of human resource management. “Performance management is a continuous process of identifying, measuring and developing the performance of individuals and aligning performance with the strategic goals of the organization” (Aguinis, 2009). Performance management is many times mistaken as performance appraisal but the latter is just a part of the former.
There is no single universally accepted model of performance management. Various experts have explained the concept in their own ways. Mabey has prescribed the model of performance management system in the form of ‘performance management cycle’. This cycle has 5 elements which suggest how performance management system should be implemented in an organization. The elements of performance management system cycle includes:
- Setting of objectives.
- Measuring the performance.
- Feedback of performance results.
- Reward system based on performance outcomes
- And amendments to objectives and activities (Mabey et al, 1999).
What others say
Salaman says there are two theories underlying the concept of performance management:
- The goal-setting theory.
- Expectancy theory.
Goal-setting theory had been proposed by Edwin Locke in the year 1968. This theory suggests that the individual goals established by an employee play an important role in motivating him for superior performance. This is because the employees keep following their goals. If these goals are not achieved, they either improve their performance or modify the goals and make them more realistic. In case the performance improves it will result in achievement of the performance management system aims (Salaman et al, 2005).
Expectancy theory had been proposed by Victor Vroom in 1964. This theory is based on the hypothesis that individuals adjust their behavior in the organization on the basis of anticipated satisfaction of valued goals set by them. The individuals modify their behavior in such a way which is most likely to lead them to attain these goals. This theory underlies the concept of performance management as it is believed that performance is influenced by the expectations concerning future events (Salaman et al, 2005).
- Aguinis, Herman. 2009. 2nd Edition. Performance Management. Dorling Kindersley India Pvt. Ltd.
- Salaman, Graeme; Storey, John; Billsberry, Jon. 2nd Edition. 2005. Strategic Human Resource Management: Theory and Practice. Sage Publications Ltd.
- Mabey, Christopher; Salaman, Graeme; Storey, John. 2nd Edition. 1999. Human Resource Management: A Strategic Introduction. Blackwell Publishers Ltd.
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