The Insight Towards Performance Management Commerce Essay

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This dissertation will evaluate the implication and the effective of performance management. The purpose is to investigate the usage and how performance management is effective in today's organisations. The dissertation will present the topic area as an introduction with the objectives.



This dissertation will explore today's modern era and the insight towards performance management, including motivated workforce, direct financial gains and the improving the management control within a large organisation and how this system is conventionally in practice and how it could be dismissed and managed by organisations. It will show a broad insight towards the current requirements that organisations use with their employees who are the core requirements that can modify a business strategy to success. This study will analyse the performance management, in addition to indentifying employees' desires and the organisation's benefits.

Organisation usage of performance management might not be desired to its full advantage; however the measures of performance management have the reliability to achieve organisational goals if the practice is used wisely. It could be a common human response to want to discard something that organisations may find difficult or a waste of time.

For that reason, large UK organisation may dismiss such practice for improving employee's performance and productivity. This paper will therefore investigate if performance management should be considered by large organisations to improve employee's behaviour towards their job-role and how it should be applied. The paper will investigate how performance management in any form should still be a foundation of management practice, only for the reason that it would benefit that particular organisation in realising its strengths and weaknesses. Performance management offers a way to understand and identify the opportunities with employees and their employers. Aspects of performance and attitudinal development, that of efficient performance management systems, is naturally intended to achieve collating the accurate results in realising what can be improved. Not only do organisations benefit from this, but can also develop and improve performance, as employees will feel appreciated; thus motivation is increased where set targets and deadlines are met more effectively.

Aims and objectives

There are numerous activities that would enhance employee's ability to perform such as appraisal system, rewarding, flexibility and performance management, where employee's looked upon as recognition, which are all types of motivational factors for employees. Given the limitation of ten thousand words for the dissertation, therefore performance management will be one motivational area focused upon, although keeping in mind that other context is fundamental to what performance management is used for in business practice.

The aim of this paper is to examine how major organisations utilise and handle performance management in today's modern era and how it is demonstrated and practiced in a large business environment. The objectives are to explore the relevance of performance management in a large organisation and how such practice is used or discarded. The dissertation will outline the focal issues towards employees motivational gained as well as business processed enhance will the simplest requirements and usage of performance management.

The objectives for this dissertation:

To analyse the effect which performance management has on the employees and on the organisation

Examples of performance management usage.

The influences and impact it has.

The strengths and weaknesses on such practice been used.


2.1. Introduction

This part to the dissertation will show the focal point on how information was collected whilst writing this paper. This dissertation aims to focus on the implementation and the effective usage of performance management. Therefore primary research is a vital element to conduct as this produces the factual examples. The field research will assist numerous forms of research through questionnaires and interviews. Therefore secondary data was not much relevant as qualitative method would be used to evaluate existing information, which would not be updated as much as the key topic to this dissertation is to see the effective of performance management and if it's still undertaken, thus real life exploration is essential through primary research.

2.2. Primary data

Primary data consist of field research, which involves collecting data that does not already exist. It is the most suitable data to consist for this dissertation as real life data can be collected to analysis the effective of performance management. Primary research still represents a significant part towards research as when some insight is collected through secondary data; primary research can therefore be undertaken when the accurate requirements is investigated.

There are advantages in using primary data for this dissertation, addressing specific research issues can be done on its own to carry a specific research on a particular area. Therefore collecting the accurate source of research will assist this paper as information that is purely based on the topic area will be the focal point towards this investigation. The information consists of greater control on how much information is required to answer the topic question, for example the size of the project hence the responses needed and the location it will be conducted. Compared to secondary data where large sources of research available could be lengthy, whereas primary source is focussed on the research that is necessary and information is produced at its own relevance's.

Nonetheless by obtaining secondary data is far cheaper as information is collected whereas primary research can be expensive as materials to produce questionnaires and preparing as well as carrying out research can be costly. Primary data can be also time consuming, as research can be difficult to obtain. Questionnaires might be ignored or given back at a later date. However primary is at best practiced used in the dissertation as it will point out the key elements towards the usage of performance management and how it is effective.

The sources through newspapers, textbooks, academic journals, the internet and University lecture notes have all provided me with crucial information that has assisted with the academic part of this paper. The University databases, Proquest, Emerald, ABI, Science Direct and Lexis were used to obtain relevant source for the dissertation. Internet search engines such as Google, Ask Jeeves, Msn Search and newspaper websites have been used. This has led me to look at a wide range of view points towards the topic area through articles and company information.


3.1. Introduction

The term Performance Management can be used in to different context, improving the team, organisation and the key area looked upon this topic; individual performance where process is purely based on dealing with underperforming employees. Armstrong and baron (1998) defined it as 'A strategic and integrated approach to increasing the effectiveness of organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors'. Performance management is a cyclical process, which aims to improve organisational objectives and to improve employee's performance and productivity. Armstrong and Baron (2004) in addition describe performance management 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 to be achieved and an approach to leading and developing people which will ensure that it is achieved'.

Organisation first measure current behaviours within the company, subsequently appraisal are introduced to indentify the current progress with the progress goals, which will assist to indentify the dissimilarity. Therefore action is taken into place as the organisation has a fair idea on what to focus on in order to enhance the performance. The action will then be put into practice and observing the situation either weekly or monthly, for a better inspection towards the continued improvement for the organisation and its employees. According to Armstrong (2006), 'Performance management is a planned process of which the primary elements are agreement, measurement, feedback, positive reinforcement and dialogue'. Thus this process is taken step-by-step which will calculate the final input towards the employer and their employees.

'Presumably, a good performance management system consists of a balanced set of factors that are critical for the success of a company, and a limited number of indicators that are a measure for organizational performance' (Elzinga et al, 2009) Performance management is a used to enhance performance through measuring, appraising, action and the observing the progress regularly for developing underperformers and good performers. It is a measure that is applied to organisation through groups, teams and the organisation as a whole. Armstrong (2006) further states 'performance management is to establish a high-performance culture in which individuals and teams take responsibility for the continuous improvements of business processes and for their own skills and contributions within a framework provided by effective leaders'. As a result performance management is a practical tool that is available to use as Armstrong (2006) stated, it can be seen as a valuable tool that can facilitate organisation to enhance employee's performance.

'Performance management, and PMS, are widely used and yet when probed provide substantial differences of meaning. For example, PMS is often used in the context of human resource management (HRM) systems and in relation to controlling individual (employee) behaviour:

……performance management includes:

• planning work and setting expectations,

• continually monitoring performance,

• developing the capacity to perform,

• periodically rating performance in a summary fashion, and

• rewarding good performance'

(Broadbent and Laughlin, 2009)

Broadbent, J. and Laughlin, R (2009) Performance Management systems: A conceptual model, Management Accounting Research [online] vol. 20 (4), p283-295. Available from: [Accessed 23th November 2009]

Armstrong, M. (2006) Performance Management. 3rd ed. London: Kogan Page Limited.

ARMSTRONG, M. and BARON, A. (2004) Managing performance: performance management in action. London: Chartered Institute of Personnel and Development. Available from: [Accessed 12th October 2009]

Armstrong, M. & Baron, A. (1998). Out of the tick box. People Management, 4, 15, 38-39.

Elzinga, T., Albronda, B. and Kluijtmans, F. (2009) Behavioral factors influencing performance management systems' use. International Journal of Productivity and Performance Management [online], vol. 58 (6), p508-522. Available from: [Accessed 19th November 2009]

3.2. Performance Management, Appraisal and Motivation

Performance appraisal could be seen as a similar object to performance management; however these to subjects are dissimilar as performance appraisal assist performance management. It is a process which may require in looking at the past performance, where employers may review the outcome thus employers engaging a one-to-one conversation with the employees till all areas are resolved. However, organisation implementing performance appraisal cannot exclude performance management as this should be applied appropriately. Performance Management brings a range of practice can be a vital tool, which together contributes towards the effective management and employees, which builds an effective organisation performance to resolve employees performance and look upon long term goals. Performance appraisal is the operational, which is based for a short to medium term and is looked on the employee's development and current performance. Performance appraisal is a similar tool as some elements feed into performance management.

3.3. Summery

To summaries performance management can be predicable