Performance Management is a hot topic in business today. Many companies now understand that unless you develop goals and an associated Performance Management process it is difficult
· to succeed (as the entire company is not aligned in what it is trying to accomplish) and
· to provide the corporation with a long-term focus that is achievable
Carter McNamara, PhD, defines the following as the key benefits of Performance Management.
1. Performance Management focuses on results, rather than behaviours and
activities.
A common misconception among supervisors is that behaviours and
activities are the same as results. Thus, an employee may appear extremely busy,
but not be contributing at all toward the goals of the organization. An example
is the employee who manually reviews completion of every form and procedure,
rather than supporting automation of the review. The supervisor may conclude
the employee is very committed to the organization and works very hard, thus,
deserving a very high performance rating.
2. Aligns organizational activities and processes to the goals of the
organization.
PM identifies organizational goals, results needed to achieve those goals,
measures of effectiveness or efficiency (outcomes) toward the goals, and means
(drivers) to achieve the goals. This chain of measurements is examined to
ensure alignment with overall results of the organization.
3. Cultivates a system-wide, long-term view of the organization.
Richard A. Swanson, in Performance Improvement Theory and Practice (Advances in
Developing Human Resources, 1, 1999), explains an effective performance
improvement process must follow a systems-based approach while looking at
outcomes and drivers. Otherwise, the effort produces a flawed picture. For
example, laying off people will likely produce short-term profits. However, the
organization may eventually experience reduced productivity, resulting in
long-term profit loss.
4. Produces meaningful measurements.
These measurements have a wide variety of useful applications. They are
useful in benchmarking, or setting standards for comparison with best practices
in other organizations. They provide consistent basis for comparison during
internal change efforts. They indicate results during improvement efforts, such
as employee training, management development, quality programs, etc. They help
ensure equitable and fair treatment to employees based on performance.
Carter McNamara, PhD, http://www.managementhelp.org/perf_mng/benefits.htm
Other benefits to be
gained from Performance Management can be found here.
Next section: ARM Outputs