Prior to discussing the main peculiarities of developing, implementing and evaluating performance management system, it is of the crucial importance to define this process, because performance management can be discussed from various perspectives. Overall, this process can be interpreted as a set of measures, aimed at increasing the productivity of the company. It comprises such stages as planning, monitoring, rating, training, and rewarding (O’Leary, 2004). Despite the fact, that this technique is relatively young, the majority of top companies use this method, because its efficiency has already become apparent. Nevertheless, it should be borne in mind, that misuse or misinterpretation of this technique can easily prevent the organization from achieving the assigned task i.e. increasing the company’s productivity.
If a person is employed as HR director in US-Chine joint venture, and he or she has to develop and implement performance management system, it would be prudent to make the following steps. First, it is necessary to clearly identify the goals that the company sets for a certain period of time. Judging from that, HR director can identify the qualities, which the employees should possess (Hedge, 2002). It should be taken into consideration that the person, who is responsible for implementing performance management system, should focus not only on the requirements for a particular job, but also on cultural aspects. US-China joint venture is an international company, which means that employees must have experience of intercultural communication.
Performance expectation should consist of the following parts: job description or general responsibilities, in other words, the worker should be informed about his or her immediate duties and work-related activities, which must be comprehensible and attainable for him. Furthermore, performance expectations are supposed to describe professional and personal qualities that the worker should possess. Certainly, they usually depend upon the position, the employee holds, however, in this particular context; it is possible to make some generalizations. First, the person must possess communicative skills, particularly, the knowledge of a foreign language.
Moreover, he or she has to be aware of the cultural differences, existing between Chinese and American people. Certainly, this list can be easily continued, and one cannot disregard leadership qualities, flexibility, or ability to make independent decisions. In addition to that, the management has to familiarize the employee with the rating system and explain it to him or her in order to avoid any misunderstanding (Messmer, 2004).
The second stage of performance management is monitoring, recording, or observing work-related activities of the employee. The management has to identify those aspects, which should be improved or eradicated (if it is necessary).It should be taken into account that the process of monitoring cannot be limited only to observation, the manager has to make sure that the worker is meeting the standards established in the company.
Moreover, monitoring should identify deviations in the employees behavior, especially regarding his or her immediate duties. The observation and further assessment should be based on the analysis of quantitative and qualitative data, for instance, timelines, output (the number or services, which the employee has provided fort a certain period of time). Such criterion as quality should include customers satisfaction (or dissatisfaction), accuracy, and effectiveness. At this stage, the management should be able to identify the causes of underproduction (O’Leary, 2004).
While rating the productivity of the employee, one should develop the grading system. As a rule, the effectiveness is assessed on five-point scale (outstanding, good, acceptable, needs improvement, and unsatisfactory). The management has to define to each point, and develop criteria for assessment. The employee should be informed about the results of such assessment. These results also determine the degree of intervention, or measures that the organization has to take in order to increase productivity (Tyler, 2004).
The forth stage or developing is aimed at improving the employees work-related skills. The training program should be evidence-based and clearly reflect the companys and workers needs and demands. As regards the particular case, we can single out several aspects, which need to be addressed, namely, immediate duties (or work related activities), professional and personal qualities of the employee or employees. For instance, if the cause of poor performance is the cultural differences between employees or low cultural awareness, the organization should provide additional seminars or courses, which would solve this problem. Additionally, the employees should take extra language courses, because underproduction occasionally originates from misunderstanding or limited proficiency in the foreign language.
The last stage of management performance is rewarding, which should be based on the following principles. First, it must be commensurable with the workers achievements. The main problem is that very often, the employees progress is not objectively evaluated, which eventually leads to dissatisfaction and low commitment to his or her duties. Furthermore, rewarding must have stimulative effect, even, those workers, who perform at a satisfactory level, should receive some bonuses from the company.
Thus, we can arrive at the conclusion that the process of performance management cannot simply be divided into five parts, because components are closely intertwined, and every mistake, made by the management at initial or intermediate stages can make the process virtually useless.
In order to assess the effectiveness of performance management system HR director should make the following steps. Traditionally, return on investment (or ROI) is calculated according to this formula: the return (or gain) from investment is divided by its cost. However, such algorithm is not readily applicable to the field of performance management; especially it concerns the gain from investment, which cannot be always measured numerically (OLeary, 2004).
Moreover, very often it has only qualitative representation; each measure, taken by the management can have many consequences. Thus, it is not always possible to measure constituent parts of this equation. Measuring return on investment, managers usually focus on numerical data, for instance, the cost of training programs or seminars, rewarding expenses. The gain from investment is usually determined by the companys output, in other words the number of products or services. However, such approach does not reflect the complexity of performance management. Naturally, qualitative improvements do not always have numerical representation, but it does not mean that they can be overlooked.
Christopher J. O’Leary (2004). Job Training Policy in the United States. W.E. Upjohn Institute for Employment Research.
Jerry W. Hedge (2002).Implementing Organizational Interventions: Steps,. Processes, and Best Practices. Jossey-Bass.
McLean, G. N. (2005). Examining approaches to HR evaluation. Strategic HR Review, 4(2), 24-27. Web.
Messmer, M. (2004). Developing Effective Performance Reviews. Strategic Finance, 85(9), 13-14. Web.
Tyler, K. (2005). PERFORMANCE ART. HRMagazine, 50(8), 58-63. Web.