Performance Management Applied In Human Resources Commerce Essay

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The essay focus on performance management applied in human resource management in company. First, a personal experience regarding performance management is introduced and analyzed. Then why performance appraisal is the hardest part is explained in two aspects, from perspectives of characteristics of performance appraisal and subtleness that needed in appraisal conduction. Further more, ways to improve process of performance management and employment relationships are introduced. Finally, problems while not seriously treated are discussed.

Related Personal Experience

The author has been working in a company holding policy of performance management. Unfortunately, the execution proved to be unsuccessful. The manager prefers to a complete control and supervision over all employees and drew up the policy of performance management according to his will. Without consulting and discussing with the employees, the management plan was taken into action. The direct result is an average decrease in the salary. From perspective of an employee who was restricted by the performance management, his or her actual salary decreased, so he believed that it is factually a process of decreasing salary with a cover of performance management (Herman, 2006). When most employees found they can not gain benefit from the new policy, they were not satisfied and began to resist the reform. Finally the performance management plan, especially the appraisal methods were improved through a discussion with employees.

The reasons why the performance management failed at first are as follows: The first reason lies in incomplete performance appraisal standards. For lacking of relevant managerial experience, the manager drew up the performance management plan and method according to imitation of other companies in the same industry rather than the factual conditions. The performance appraisal standards are inappropriate, unpractical. Error occurs when the performance appraisal standards are applied into actions. The second reason is multi-level evaluation. For evaluating performance of a normal employee, every level of the managers has words to say about his or her performance. For development of the employee's career and personal interests, different levels of managers view the performance from different perspectives and have different extent of knowing the practical working condition and effort of the employee. Disparities in the appraisal of one employee arise often. Usually, the upper-level manager has more say than the lower-level manager, the conclusion of appraisal are decided by the upper-level manager. The lower-level manager may feel frustrated, his or her sense responsibility can be bated due to less authority; while for the employee, he may show discontent to challenge authority of the lower-level manager. It will exert bad influence to the normal operation process. Thirdly, it is due to the quota system in performance management. In the performance management, the quotes of different levels are fixed. For example, the percentage of A level employee should be 10%, B level should be 20%. Factually, most managers do not have a complete and detailed understanding of each employee, so the rationale of the percentage quotas can not be testified. The percentages quotas usually go astray from the practice. The business department loses trust in the human resource management department. The employee will express their dissatisfactory to the upper-level manager and lower-level managers. Sometimes, for an appraisal quote, different departments or employees can have conflicts, then the effectiveness and efficiency will be influenced for everyone focus on the performance appraisal results. The third factor is owing to the 'confidential appraisal results'. The appraisal results are treated as top secret in the company. The opaqueness can enhance sense of appraisal unfairness and distrust to the human resource management department (Bruce and Abdullah, 2005). The employees hardly know the expectation from their managers, both upper-level and lower-level. Without a clear understanding of the organizational objective, the employee has difficulties in adjusting his or her work to meet the demand of the company. It can be a barrier blocked in the function mechanism of the performance management. By and by, the employees lost their confidence in the effectiveness and efficiency in the performance management itself. Without transparency in the appraisal results, the objective of evaluating and helping employees for their development are in vain.

Performance Appraisal: Hardest Part

Performance management can be defined as a series of actions taken to ensure that the objective of an organization can be achieved in an effective and efficient manner. Usually, it can be divided into five related process: The performance management planning part is the first step which is according to the department or organizational objectives and duties. Execution and management of performance plan is the most time-consuming process for communication, record of performance and consultancy should be conducted and enhanced in the whole process (Ainsworth and Smith, 1993). Performance appraisal is the crucial and hardest part in the whole process. Feedback part usually is companied with the performance appraisal part through solve the misunderstandings by communication. Appraisal applying is the last part for allocating positions.

Performance appraisal is the hardest part in the whole process. The reasons lie in the following aspects:

On one hand, it can be explained by the characteristics of performance, which is multi-factors, multi-dimensions and dynamic. Multi-factors refers to that the performance does not depend on the single factor, but a combination of forces exerted by various factors. Main factor of the working performance for employees are composed of the motive, skill, environment and opportunities, among which environment and opportunities are objective factor, and the motive and skills are subject factor owned by employees their selves. In a word, the performance can be concluded as a function with variables, including environment, skills, opportunities and motives. So it proves to be difficult in summarize the four factors together and quantified in performance appraisal. Multi-dimensions can be due to many perspectives explained by the performance. Many variables can be taken into consideration while performance appraisal is conducted. For example, if we conduct performance appraisal performance, we have to pay attention to the completion of the indexes, as well as the consumption index, and energy-consuming condition, time-consuming condition. Not only is the objective performance appraisal needed, but also the subjective factors, such as working attitude, morale, obedience and sense of responsibility should be examined. When too much have to be taken into consideration and quantified, the performance appraisal proves to be the hardest part. Usually, weight of each factor should be fixed through research, discussion and communications with both employees and experts. The third characteristics, dynamic mean that the performance, a combination of both working behaviors and results in a certain period, can be different due to different period. It is of great importance to view the working performance of the employees from a dynamic and developmental perspective. Standards undue should be adjusted according to the new environment of the company; both internal and external environment should be taken into consideration (Bernardin and Beatty, 1984). The performance appraisal should be dynamic and adjusted in due time. So it is hard in performance appraisal part. The characteristics of the performance can be a great explanation for the performance appraisal as hardest part in the performance management.

On the other hand, for any manager who wants to improve the performance and achievements, the only one way is to improve effectiveness. Measurement is crucial. If a manager cannot measure the performance, he can never control it. If he can not control he performance, he can not manage it. If he cannot manage it, he can not improve it. So measurement can be crucial in the whole process. When it comes to the performance management, the measurements refer to the performance appraisal. The performance appraisal should balance the interest of both employees and managers, personally and organizationally. Once inappropriately conducted, performance evaluation can result in unpredictable results. Subtleness and carefulness should be of top concern (Andy, 2002).

Ways to Improve Employment Relationship

The ways include: employee-first conception, two-way communication, and combination of strategy, management by objectives with performance appraisal

The performance management should be employee-centered by connecting the employees' personal performance and strategic objectives of the organization. Various methods should be applied to promote performance in a more effective and efficient manner. The performance management is not only a process of managerial process day by day, but also a process of supporting and developing employees consistently. It should include the following process connected closely with the employees: setting goals for company, departments, team and employees, execution and applying of performance appraisal system, appropriate salary strategic and theme, development and training program, personal career path planning, culture management and so on. Two factors should be paid into serious attention, which are sense of fairness and sense of satisfaction (Rene, 2007).

Sense of fairness can be enhanced by allocation equitably, procedure equitably, interaction equitably and information equitably. Allocation equitably can be influential in the performance of employees. Psychological research shows that employees tend to compare ratio of personal input (including personal skills, effort, education, training, experiences and so on) and output (return gained from the organization) to that of the other employees. When they are equal, employees can feel a sense of fairness which can be incentive for his pr her working attitude and morale. When the ratios are not equal, especially when he input more but output less, he will have a sense of unfairness. Meanwhile, the unfairness leads to the worried and nervous mood, then intention for solving method to reach equity restoration, both psychologically and physically. Procedure equitably can be attained that in the process of performance management, employees can have a right to say, to express his or her opinions and suggestions, to participate in the processes of objective setting, performance appraisal and so on. If they have opportunities of more say, they can feel a sense of fairness in the procedure. Interaction equitably can be reached by interpersonal equitably. The manager should treat the employees enthusiastically and respect them, which is interpersonal treat an employee gain from a manager. Many factors can influence sense of interpersonal fairness, such as mercies, neutrality and respect of the manager. Information equitably can be satisfied by the appropriateness of ways to provide related procedures and result to employees by the manager. The explanation should be open and honest without hiding information and deceiving.

Sense of satisfaction can be explained by the compare between 'what an employee gets' and 'what should an employee get'. The narrower the gap is, the less satisfactory an employee gets. Sense of satisfaction is a comprehensive index comprising of related personal factors, working factors, general operating condition, and prospect of a field. Sense of satisfactory can be measured by the working-related factors, such as ability utilization, achievement, activity, authority, moral value, creativity, independence, security, social service, social status, responsibility and variety

Nonworking-related factors are advancement, company policy, compensation, co-worker, recognition, supervision human relations, supervision-technical, work conditions.

'Employee first' can be a tool for improving the employment relationship through inspire sense of fairness and satisfactory in performance management.

Communication takes a role in management of four functions, including controlling, motive, mood expressing and information. Communication can control the behaviors of the employees directly or indirectly.

Two-way communication includes up-down communication and down-up communication. Communication should be dynamic without a specific subject or object. Performance management is a process containing consistent communication; communication composes the whole procedures in performance management. Only by consistent communication, can demands of both employees and managers be satisfied. Finally, objectives of performance of management can be reached. For managers, communication is of vital importance. Firstly, it can aid in knowing development in working and the tightness of procedures, looking for potential problems and solving the problem before it becomes more complicated. Secondly, manager can have a complete review of working conditions of employees, progress condition and providing guidance or resources to aid in working. Thirdly, effectiveness of the work can be promoted by communication, and then sense of satisfactory can be stirred by the incentive system and performance appraisal. For employees, consistent communication can gain more information about feedback or response from customer complaint, efficiency in working, product quality and so on, which will assist the employee improve his or her working methods and professional skills. Secondly, employees can gain support of resource and help and achieves the objectives more easily. Thirdly, employees can find fault with last working period and set improving point for the next stage (Edward, Timeothy and Pobert, 1988).

In performance management planning stage, two-way communications are needed for setting performance objectives. The performance indexes are split level by level from up to down. In the process, managers at each level should negotiate and inform the index to the lower-level manager, till to each employee by communication. Foe employees, they should propose their advices and suggestions to upper-level managers. Sometimes communication can be a way to delivery disagreement in index allocation or resource needed to fulfill the tasks. If at the first stage, the company fixes up the performance index without discussion and communication with the employees, they can easily turn into unpractical data without any factual meanings.

In the process of execution and management of performance planning, managers will be a mentor for employees to aid them in improving professional skills and possible adjusting deviation, and revising the objectives. It is a process of handling with the problems in time by both employees and managers through communication. If necessary, objectives and tasks can be rearranged to be more practical. In the two-way communications, both upper and lower levels can gain information, enhance mutual understandings. The work of employees can run smoothly. The whole process is dynamic and flexible allowing for adjustment and rearrangement. Two sides should be concluded, both positive and negative. Positive praise can recognize the effort an employee made and instill him or her sense of satisfactory; while the negative will help him realize the problems and solve it in a short time. Performance appraisal is also a process of communication. Performance interview can be part of it. It is not for a quarrel, but a face-to-face interview in a comparatively open way. The employees can have a basic understanding of the performance before and improve in the next stage. Performance feedback and appraisal applying also can be concluded as processes of communication. Objectives and plans of next stage can be understood by both employees and managers.

Through effective and efficient two-way communication, employment relationship can be improved.

Strategic management will take the whole company as a whole to executive management to optimize the mechanisms. The characteristic of strategic management demands a general view of performance management. Basic on the complete understanding of the strategy, detailing the strategic objectives and evaluating personal performance can be guided with a clear direction. The strategic management needs decisions of upper-level managers, but also support and anticipation of lower-level managers and all staff. Once fixed, execution of strategy depends on the understanding, devotion and support from lower-level managers and all staff to some extent. The strategy is mission of every employee, so the performance appraisal should be a process including: 'appraisal - analyses - feedback - revise - reappraisal'. It should be emphasized that in setting performance objectives, mutual communication should be conducted in an open and transparent environment. Performance appraisal connects the company strategic objectives and detailed objectives of every employee or department (Victor, 2004).

Management by objectives can be defined as a managerial method to guild different levels of employees to achieve the anticipation of the whole company. The theories can offer some enlightening in performance management. The first is setting objectives together by managers and employees. Personal roles and duties are emphasized so the employee can realize relationship of personal task and company mission (Adrian, 2004). The transparency in objective setting makes it available to achieve and allocate the contributions from each employee. For managers, they can have a full understanding of future development direction and make the operation in order. Thirdly, personal objective should be in line with the company objective. Meanwhile, incentive mechanism can be a way to improve morale and inspire the potential of employee.

By applying concept of company strategy and management by objectives, performance management can be easier and employment relationship can be improved.

Objectives and Attitude towards Performance Management

If the manager get 'too busy' to undertake the performance management with their staff, his actions and behaviors indicate that he does not take the performance seriously. If so, employees hardly devote to the performance management, especially the performance appraisal part. The concept can be deep-rooted gradually, and no employee would like to offer suggestions or advises, finally, the performance evaluation can be nothing but an empty framework.

If the performance management is ignored by the manager, the objectives following can not be realized. Firstly, the realization of strategy can go astray. As discussed above, performance management connects personal objective and organizational objective. Without detailed objective and conception of organization objectives, the strategy can never be achieved. The second objective being influenced should be managing employees. In many managerial decisions, performance management information, especially appraisal results can be supportive. The performance management should be vital in promotion, rotation, training program and so on. Without being taken seriously, managing employees can not be effective. The third objective is to inspire the potential of employees (Bruce and Champagne, 1993). In performance management, communication can be conducted to make the employees realize the deficiency and problems in working, training can be a great tool to improve the professional skills and explore the potentials of employees.


Started by a personal experience of the author, performance management is introduced in the essay. From perspective of a case study, the essay analyzes the unsuccessful performance management and list problems existing. The reason why performance appraisal is the hardest part the five processes of performance management is discussed. It can be concluded that both characteristics of performance appraisal and subtleness needed while conducting performance appraisal. Moreover, ways to improve employment relationships and performance management are introduced, employee first conception, two-way communication, combination of company strategy, management by objectives included. Finally, problems arises when not taken seriously by manager are listed.