Executive Summary
This paper discusses performance management, a concept that expands on the idea of performance appraisal to engage HR departments in effectively maximising the company’s performance. It does so by incorporating the human factors that are currently underresearched, such as motivation, job satisfaction and teamwork. These indicators can enhance a worker’s motivation and inclination to innovate for the company’s benefits if maintained at a high level. To evaluate the current performance management framework as well as its state in practical implementations, the author conducts a literature review that aims to encompass the definition of performance management, best practices in the area and the state of the discipline in various companies.
They find that performance management is associated with substantial improvements in performance when compared to traditional approaches. With that said, there are also issues such as the lack of fit with some other popular business frameworks and the differential effects of performance management approaches on various aspects of performance. Moreover, practical implementations of performance management have demonstrated several other weaknesses that do not appear in theory. As such, both theory and practice in performance management have substantial advantages but also weaknesses that have to be addressed before widespread adoption is possible. Managers should research the paradigm and consider its relevance to their business before committing to the change, being prepared to make substantial changes to guarantee performance management’s effectiveness. The paper provides a recommendation and implementation plan for businesses that aim to follow the report’s conclusions.
Introduction
It is in a company’s best interest to ensure that each of its employees produces as much of the good expected of them as possible. To achieve this goal, they have to be motivated to commit as much effort to their work as can be reasonably expected. Additionally, this work has to be directed productively, avoiding wastage and inefficiencies. The task of managing all these factors is considerably challenging, especially at large companies that employ massive numbers of workers. When a long-term orientation is taken into consideration with all of its implications, such as employee health or growth, the matter becomes massively challenging. To overcome the problem, scholars and managers have been researching general approaches that can be applied to most organizations to achieve optimal employee productivity.
The framework in question has become known as performance management and is nowadays an essential part of the human resources department’s duties. Kerwin and Chelladurai (2018) define it as “all the HR practices employed by an organization to ensure that employees have the means, the motivation, and the opportunity to improve firm-level performance” (p. 244). Performance management is strategic in nature, aiming to produce the highest benefits for the firm in the long term. To that end, it incorporates a variety of practices, such as goal-setting, regular evaluations, coaching, assistance in career development, and others. As a result, with a robust performance management system, employees perform well at their positions. Eventually, they are promoted to jobs that enable them to use their competencies to their full potential.
With that said, as with many other areas of business, performance management is in continuous development. One of the issues that slow down progress in the area is the nature of the business environment, which is separated into numerous companies with unique practices and external factors. As a result, practices such as variable pay, which produce excellent results at many organizations, may fail in numerous others, and it is challenging to determine the reason. This phenomenon has complicated the adoption of performance management approaches and the determination of best practices in the field. As Bainey (2016) notes, many companies use an outdated form of performance management that is more harmful than beneficial to performance to this day. Nevertheless, substantial advances have been made in the practice of performance management, both in theory and in practice.
This dissertation aims to evaluate the current scholarly consensus on the topic of performance management as well as its current implementation in businesses. It will review the literature regarding a variety of the components that are currently considered to be critical to the practice and compare the findings to the results of practical studies conducted recently. To that end, the dissertation will aim to answer the following research questions:
- What methods of performance management are currently considered best practices in HR scholarly literature?
- How should those approaches be implemented in practice to achieve optimal performance?
- How do these recommendations compare to the current state of performance management implementation in business?
Research Methodology
The research was qualitative in nature, conducting a systematic review of the current literature regarding performance management. It has worked with secondary data due to various constraints placed upon the research, such as the lack of time and the challenges of obtaining a broad sample of company information.
Additionally, this approach enables it to collect knowledge regarding the current scholarly consensus on performance management (Freytag and Young, 2018). As the purpose of this research is as much to gather information on best practices in the field as to evaluate the current practical implementations, this approach is suitable for the purpose. As such, scholarly literature was a significant part of the paper, comprising the entirety of the sources from which information was drawn.
The search for sources was conducted in databases such as Google Scholar, JSTOR, and the university library. The primary keywords used were “performance”, “management” and “HR”, all of which are essential to the topic. An additional recency criterion of publication five years ago or less was introduced to ensure that the findings reflected current scholarly notions. After an initial search, secondary keywords were introduced to refine the results, such as “definition”, “appraisal”, “communication”, “feedback”, and others.
The author then reviewed part of the produced papers that were displayed at the top manually and selected the most appropriate ones for their purpose. Overall, 83 articles were produced through a variety of searches including combinations of these keywords and a cursory manual review. Twenty-eight of them proved to be unsuitable upon further inspection and were discarded from the sample, leaving 55 scholarly works, both books and journal articles.
Table 1. Search Process Display.
Afterward, the remaining items underwent a thematic analysis to clarify the overall state of the field. First, a preliminary sample of broad literature on the topic was inspected to identify the overall scholarly trends within the field. The remaining works were separated based on the topic and its relevance to a particular aspect of the research and processed in groups. They were viewed in the context of each other to find similarities and differences, which would, in turn, clarify the greater picture. The author would then reflect on their findings and the understanding that they were able to gain. Lastly, they would organize the insights and process them into a written form, forming the body of the review. It is separated by topic and subtopic to simplify the reading and comprehension of the paper.
As in most qualitative research, the most significant concern for this paper was researcher bias, which could substantially skew the results. Confirmation bias is a significant issue, with the author more likely to accept theoretical and practical results that would support their views (Juarez Ramos, 2017). To avoid it, the author attempted to view the sources while remaining aware of the possibility, refusing to dismiss results and reporting on them regardless of their personal opinion. Another potential problem is reporting bias, as the author had neither the time nor the intention to include the entire context and full results of each paper. To prevent it, they have tried to encompass as much of the result that pertained to the topic as possible. Overall, while the complete prevention of the possible biases was not possible, the author was able to minimize it to an extent by remaining aware of the potential problems.
Literature Review
Performance Management Practices
The definition of performance management is relatively new, emerging from the older concept of performance appraisal. DeNisi and Murphy (2017) find that it has first appeared in scholarly literature much later than the other term but grown to incorporate it over time. While performance management is based on evaluating employee productivity and results, it expands further to produce superior results. Landy and Conte (2016) claim that the term currently has three essential components: definition of performance, the measurement process, and the communication between the employee and the supervisor. Combined, they help the manager understand gaps in the employee’s performance and work with them to address the issues. As such, each component warrants an additional consideration and will be elaborated on below.
Performance is a complex concept due to the various factors that may be considered part of it. Nevertheless, Prescott, Correa, and Shabiyi (2017) provide a simple and agreed-upon definition of “the achievement of predetermined goals and outputs” (p. 396). This notion can be considered an oversimplification of the concept, designed to provide a broad definition that one may adjust based on their needs. Behl (2017) provides a somewhat more detailed description, noting that “efficiency, efficacy, productivity, and profitability” are critical components of performance (p. 102). However, each of these concepts also requires additional explanation, further highlighting the complexity of the performance. Overall, the use of a specific approach to defining the term often depends on the specific manager or scholar.
Performance measurement is otherwise known as an appraisal and is possibly the best-researched area in performance management. Jenkins and Hook (2019) describe the established practice as regular reviews and less frequent formal evaluations, intended to find problematic areas and reward employees who perform above expectations. Depending on the company, a variety of different metrics may be employed to conduct the process. With that said, there is a well-researched problem of performance appraisal in organic organizations due to their less rigid definition of tasks, jobs, and work processes (Rabenu and Tziner, 2018).
Even in environments where it is applicable, Trost (2017) highlights the long-standing controversy surrounding the highly varied effectiveness and negative implications of the approach. The author claims that, rather than the fault of the managers, this narrative may be the result of an inherent flaw in the concept of appraisal.
The last aspect, communications, is frequently associated with the success or failure of a performance appraisal. As Scott and Lewis (2017) state, “effective performance management involves routine supervisor-subordinate feedback exchange” (p. 1142). HR managers have to communicate successes and issues to employees, encouraging them to imitate the former and alleviate the latter. Trost (2017) adds that many sources will often try to solve appraisal issues by telling managers to speak to employees more positively instead of demotivating them with negative discussions. However, communication also has several other roles in performance management, such as the identification and transmission of a broader vision for the company (Wilton, 2016). Without a general climate of transparency and shared goals, employees may not want to perform above the bare minimum due to the expectation that they will get nothing in return.
Best Practice in Performance Management
To expand the understanding and implementation of performance management, scholars have challenged the traditional definition of performance and attempted to expand it. Farndale and Paauwe (2017) note that the profit-oriented description of the term favored by managers in the past is a significant limitation in human resources professionals’ ability to improve organizational success.
Such an approach disregards the importance of the human element, which can affect numerous factors within the organization and enhance or damage its operations. As such, given that the effective implementation of performance management begins with the creation of a performance-oriented culture (Mathis et al., 2016), it is essential to expand the definition. From an HR perspective, this task is best accomplished by understanding the relationship between human resources and performance.
The HR department can determine whether employees are performing to expectations, which is often considered the primary purpose of performance appraisals. However, per Katou (2017), it can affect performance both directly and indirectly through items such as job satisfaction, motivation, organizational citizenship, and cooperation, which, in turn, change operational performance. By keeping employees satisfied, the organization can convince them to perform above what is expected of them voluntarily.
On the other hand, by extorting performance from workers, it induces dissatisfaction, attempts to avoid work, and, ultimately, the desire to leave the job. As Della Torre et al. (2018) find, this tendency can be heavily damaging to a company because both turnover and new hires disrupt productivity. As such, measures such as satisfaction and cooperation have to be considered when determining organizational performance.
Lastly, the notion of innovation has to be considered, as it is becoming increasingly prominent in the current business environment. Gupta and Wales (2017) state that entrepreneurial orientation, an expansion of the concept, is a critical determinant of performance, though the entirety of the relationship between the two is not yet understood. As innovations tend to come from all levels of the organization, the human capital and the HR measures used to manage it are essential to success. Urban and Joubert (2017) confirm that intellectual capital is a significant predictor of performance and requires the optimization of human resource usage for its full utilization. Overall, performance appears to be contingent on various personal determinants that may be challenging to measure but are essential nevertheless.
To address the weaknesses of prior methods of performance appraisal and incorporate these challenging factors, scholars and managers have implemented and tested new, superior approaches. Idowu (2017) claims that the 360-degree system is commonly accepted as the best method of evaluating employees, though it is inhibited by expression domain and quantitative analysis-related limitations. In the 360-degree approach, multiple sources provide information regarding the employee’s performance instead of a single person.
As a result, more detailed and accurate results can be obtained, reducing biases and benefiting performance. Maghsoodi et al. (2018) confirm this belief, conducting a detailed analysis of multiple performance appraisal methods and finding that the 360-degree method is the optimal one among them. As such, the next matter to consider is how the appraisal should be structured and what aspects it should include.
To be accepted by employees, a performance appraisal should be clear and transparent in how it operates. Kampkötter (2017) finds that if it is linked to compensation directly, employee job satisfaction increases, and if there is no apparent connection, the opposite effect can be observed. Workers need to be interested in the appraisal instead of seeing it as a meaningless formality that the HR department imposed upon them.
It is also essential that the event helps create a sense of organizational unity, helping the workers feel like a part of a greater entity. Fachrunnisa, Adhiatma, and Tjahjono (2020) highlight judgment, dateline assignment, and praise for excellent performance as measures that may help do so, enhance employee engagement across the organization, and foster innovation. With that said, some potentially problematic matters warrant consideration when designing performance appraisal practices.
In particular, appraisals may have a negative effect on innovations, which cannot be demanded from employees for consistent delivery. Seeck and Diehl (2016) claim that closely compensation-related practices can negatively affect new developments, particularly less tangible ones. While they may motivate product improvements where the change is easy to evaluate and reward, the same is not the case with process innovations. As such, the employees may redirect their efforts to these other avenues in an effort to maximize their benefits from the system. Andreeva et al. (2017) also find that knowledge-related appraisal as part of a well-aligned HR framework does not improve incremental innovation and damages its radical expressions. Until a superior approach emerges, managers at companies have to consider their priorities and adjust the appraisal accordingly.
Once the results of the appraisal have been obtained, it is necessary to communicate them to the employees in a manner that improves their performance instead of reducing it. Marlow et al. (2018) state that for that purpose, it is essential to enhance communication quality rather than frequency. Such a result requires a substantial amount of competencies from HR professionals that they may not necessarily possess in every scenario. Kotamena et al. (2020) find that an HR professional’s competence did not have a significant effect on employee satisfaction and performance, while their communication skills did. As such, workers in the field should begin refining their abilities in the area and develop new, superior approaches to the task.
One area where it may be possible to improve communication is the mode in which information is being transferred. Ishizaka and Pereira (2016) have developed a performance management system that employs visual techniques to clarify crucial improvement areas for each employee. The format enables concise and easily understandable communication that lets each employee know what is required of them and explains the evaluation process in detail. Bititci, Cocca, and Ates (2016) find that such an approach can improve numerous factors that are involved in business management or related to it, enhancing the overall organizational performance. Innovative approaches such as these can help achieve widespread improvements without an excessively high investment.
Practical Implementations of Performance Management
Empirical research confirms the relationship between HR practices and performance in various ways that may not have necessarily been considered before. Khan et al. (2019) find that various practices, notably training, performance appraisal, and variable pay, have a direct effect on employee performance that is mediated by job satisfaction. The introduction of these new factors warrants a reconsideration of current performance management approaches and their implications for these additional items at many companies. Managers, in particular, should take note and adjust their personal practices. Ismail et al. (2019) state that management support is a substantial moderator in the relationships mentioned above. However, many organizations have not engaged in the transmission of the new approach to a substantial degree, failing to capitalize on the benefits.
One possible reason for this low adoption is a lack of convincing evidence that the new performance definition can generate measurable benefits for the company that justify the cost. As Marler and Boudreau (2017) highlight, only a small portion of the literature on the topic provides empiric analyses of HR analytics, which incorporate the idea by necessity.
As a result, many managers are likely unaware of the approach or the deficiencies in their implementations of it. Others likely consider it too theoretical and unlikely to generate results in practice, choosing other initiatives over it. As budget constraints play a significant role in the adoption of new HR practices in organizations (Uysal, 2016), this perception likely limits the extent to which the new perspective can spread. Reviews of HR practices at various organizations confirm this notion, though a widespread analysis appears not to have been conducted yet.
With that said, there are also organizations that have committed to the change and have been able to produce excellent results after implementing it. Zirar, Trusson, and Choudhary (2020) find a mostly uniform spread of self-rating on the topics of several HR practices that pertain to performance management’s modern definition. While there is an organization that is only beginning its transition (and has already generated benefits), there is also one that has a perfect score and consults other organizations on the topic of adopting the practice.
Doing so is essential to the spreading of the initiative, as it is highly complex and prone to misunderstanding. Anwaar, Nadeem, and Hassan (2016) find that, while new HR performance-related practices can improve a company’s performance, various issues, including a lack of understanding and ineffective HR practices, can complicate the matter. Ultimately, substantial progress needs to be made before the new approach to performance becomes widespread in practice.
A similar trend can be found in performance appraisal, which does not necessarily benefit many companies due to its outdated form and lacking implementation. Bellé, Cantarelli, and Belardinelli (2017) state that bias is consistently present in managers during appraisals, skewing the results. Imran, Haque, and Rębilas (2018) analyze the firefighter services of Malaysia, Canada, and Pakistan and find that manipulation in personal self-interest has harmed the performance of all three services. Schaerer et al. (2018) suggest that performance appraisals may be consistently inflated, creating an illusion of transparency.
Bellisario and Pavlov (2018) recommend the development of multifunctional performance appraisals as opposed to the current approach. Mollel Eliphas, Mulongo, and Razia (2017) claim that training and promotions in Tanzanian businesses are not based on performance. Overall, the deficiencies in performance appraisals appear to be widespread and significant.
These issues may extend beyond the scope of specific businesses and local managerial failures. Kim and Holzer (2016) assert that understanding individual views of performance appraisal is critical to successful uses of the practice. However, Soltani and Wilkinson (2020) claim that individualized performance appraisals recommended by the current paradigm conflict with total quality management.
Shrivastava and Purang (2016) add that the role of fairness, which drives perceptions of appraisals in large part, may be underestimated. Evans and Tourish (2016) criticize the emphasis on economic motivation in employees, stating that this theory harms managerial perceptions and, consequently, their evaluations. Harbi, Thursfield, and Bright (2017) also note that performance appraisals may be rooted in Western culture and conflict with Saudi concepts. Overall, substantial adjustments to the theory appear to be necessary to enable its success in various contexts.
With that said, it should still be noted that the fundamental assertions between the new view of performance appraisal appear to be accurate to some degree. When applied appropriately, the practice can be effective at increasing employee satisfaction (Ismail and Abd Razak, 2016; Nabi, Syduzzaman, and Munir, 2016). Banerjee and Raju (2018) find the same assertion to hold for motivation, as well, though improper usage of appraisals lowers it, instead. Kulkarni (2017) highlights the importance of transparency, though he also states that it is harmful to provide them with too much information.
Eyoun et al. (2020) make a case that generational differences have to be considered in appraisals. Lastly, Hosain (2016) confirms the effectiveness of the 360-degree method but notes that it is best supplemented with additional approaches due to flaws such as negativity and employee resistance. By reviewing additional evidence and incorporating the latest findings, scholars and managers can achieve improvements in their programs.
The communication-related issues highlighted in the review of theoretical literature also manifest in practical environments. Al Samman (2017) discusses the case of a construction company where the HR department is distrusted by both top management and employees due to poor communication, failing to achieve meaningful results. The lack of feedback from the HR department to workers is not the only potential problem, and Sharma et al. (2017) identify failure to listen to employee concerns as another consideration. Per Cappelli and Tavis (2016), part of the problem is the focus on formal evaluations rather than frequent informal conversations. As a result, discussions tend to focus on past errors rather than future growth.
With that said, informal and open communication appears to be effective where it is adopted. Khurshid et al. (2017) find that both supervisor feedback and leader-follower exchanges generally improve an employee’s performance. Krishnan et al. (2018) state that workers respond positively to day-to-day feedback and informal performance recognition, both of which motivate them. Ridwan (2019) connects feedback and evaluations with optimal resource usage at the organization level. Lastly, Atambo and Momanyi (2016) claim that effective communication improves employee performance in general, particularly when modified by communication technologies. Overall, communication and feedback improvements can benefit a company, but a substantial effort is necessary to achieve that purpose.
Findings, Analysis and Discussion
Analysis
The research aims to provide an outline of performance management as currently envisioned by scholars and implemented in practice. To answer the question, the author conducted a systematic literature review and engaged in template analysis. They identified three primary themes in the literature: definition, appraisal, and communication. The definition theme has the following sub-themes: aspects of performance and the human factor. Scholars are attempting to expand the metrics used to measure performance and connect them to specific human resources parameters.
The appraisal theme is separated into current practice criticism and suggestions for new appraisal methods. Researchers focus on the failings of present practices, both in theory and in practice, and seek ways to redesign or abolish them. Lastly, the communication theme is also differentiated into descriptions of the current approach and theorization regarding possible changes. Studies investigate the failure of many HR departments to operate effectively within the organization and suggest approaches that can remedy the issue.
Findings
The research used a definition of performance management that consisted of three different aspects: the meaning of performance, its appraisal, and communication. The company’s performance management strategy is dependent on how performance is understood, as this awareness defines the indicators that will be targeted. The specific measures used for each employee are determined based on an evaluation, or appraisal, a practice that has existed for a substantial time but is now undergoing change due to heavy criticism (Seeck and Diehl, 2016; Trost, 2017).
Lastly, the results of the analysis, as well as other measures that constitute performance management, should be relayed to the employees, and their responses should be taken into consideration. All three components have to be functional for performance management to achieve meaningful results.
The research has concluded that performance is currently being redefined to include a variety of human factors that can affect performance indirectly but significantly. As such, the role of the HR department in improving the company’s position has increased and expanded (Mathis et al., 2016). Notions such as motivation, job satisfaction, and cooperation have to be promoted to maximize performance and spur innovation (Farndale and Paauwe, 2017; Katou, 2017). However, the adoption of the new approach in realistic environments is happening slowly because of a variety of issues.
Many companies are struggling with the transition because of its complexity and the challenges involved in defining it. Moreover, managers are often reluctant to change their practices because of a lack of evidence for the effectiveness of the new definition (Uysal, 2016). As a challenging and mostly theoretical notion, the inclusion of the human factor has to gather a more substantial evidence base before widespread use becomes feasible.
Performance appraisals have been found to be effective at improving employee performance and job satisfaction, but only when applied appropriately. In particular, it can be beneficial to establish transparent connections between the process and an employee’s compensation, letting them know that their efforts are valued (Kulkarni, 2017). Otherwise, a prevailing perception that the appraisal is a meaningless formality may appear, acting counterproductively to the purpose of the measure.
Practical results confirm some aspects of this perception but also highlight how performance appraisals are applied inappropriately in many companies (Bellé, Cantarelli, and Belardinelli, 2017). They also somewhat contradict theoretical assertions, discovering multiple weaknesses that do not manifest in theory (Soltani and Wilkinson, 2020; Shrivastava and Purang 2016). The deficiencies and advantages of both sides should be considered when developing additional theory and practical appraisal designs.
Lastly, the literature is in agreement with empirical findings on the matter of communication and its effects on performance management. The practice of scheduled, formal communication that has taken place alongside performance appraisals at many companies appears to be outdated, and many enterprises are switching to a different model (Cappelli and Tavis, 2016).
They are finding that regular, often daily informal communication is more effective at facilitating the employee’s development and increasing their satisfaction. By contrast, infrequent formal communication increases the distance between workers and their superiors and effectively punishes them for past mistakes instead of creating opportunities in their future (Krishnan et al., 2018). Moreover, it has the potential to alienate the HR department from executive management, as well (Al Samman, 2017). In such a scenario, it will not be able to contribute meaningfully to the company’s strategy or operations, defeating the purpose of performance management.
The modern conception of performance management appears to still be in development, with significant mismatches between theory and practice. The issues emerge on both sides, with scholars failing to consider various factors that may complicate the process and managers dismissing the paradigm or implementing it inappropriately due to old habits and a lack of conclusive evidence (Anwaar, Nadeem and Hassan, 2016; Evans and Tourish, 2016).
As such, a substantial amount of work will be necessary to refine the concept of performance management and ensure that more companies apply it and create value in doing so. Some of the chief concerns that currently affect the notion are the integration of performance management with other business practices, failure to state clear organizational goals, and misaligned competencies in the HR department.
Many businesses are currently in the process of embracing various overarching paradigms to improve their performance, such as lean or total quality management. These initiatives typically involve widespread changes in organizational culture to account for the inclusion of new values. However, performance management improvements also have the same goal, and the efforts of those who would implement the different methods may conflict. The review has found that it integrates well with lean but does not work together with TQM (Soltani and Wilkinson, 2020). As such, the method is not yet universally applicable, and managers have to familiarise themselves with performance management before making the decision to adopt its practices at their company. Additionally, scholars have to research the interaction between it and other widespread practices and potentially make adjustments that help it integrate with these paradigms.
Another issue that emerges with performance management is the goals that it pursues, which can be problematic to define. Challenges are emerging to financial orientation, which claims that it disregards many essential human factors, such as motivation. Perhaps most importantly, some findings suggest that the focus on generating profits for the company stifles innovation (Seeck and Diehl, 2016; Andreeva et al., 2017). However, money remains a critical motivation for most businesses, as it defines whether they can survive and grow. As such, executive management has to decide which priorities they set for different objectives. Then, they can set an orientation for the HR department to pursue to maximize performance. With that said, the department should also participate in this goal-setting, which gives rise to the third and final problem.
Human resources personnel have traditionally focused on the problems of hiring employees and managing their working terms, such as compensation, vacations, and other non-directly work-related items. As a result, they have developed a set of competencies that did not necessarily include excellent communication skills due to the rarity of their direct interactions with their coworkers. As a result, they may not be competent to implement a substantial change such as that required for performance management, being unable to communicate their ideas to either top management or employees (Al Samman, 2017). A reassessment of the skills necessary for HR work may be required, followed by changes in hiring and training procedures. Otherwise, it will be highly challenging for the department to formulate performance targets or achieve them via any sort of practice.
Discussion
The results of this review show that, while there are many benefits associated with the modern conception of performance management, it is also associated with significant issues. As such, managers can be partly justified in their reluctance to adopt the practice, being well-informed about the circumstances of their organization. With that said, in many cases, the refusal to adopt it is also the result of the failure to embrace change or deep-seated issues at the business (Anwaar, Nadeem, and Hasssan, 2016).
While the theory behind performance management can benefit from an adjustment, it is based on fundamentally sound and well-established notions. As such, HR department employees and leaders should critically review their practices and identify deficiencies in their practices, considering performance management a valid option and a potential aspiration.
With that said, it is necessary to consider the limitations of the review that may call some of the results into doubt. It has worked with a small sample size due to various constraints, which was further subdivided by topic. As a result, the study may have missed works that would have shown a different perspective on the subject (Booth, Sutton, and Papaioannou, 2016). Moreover, it is likely that an article that may be considered an outlier in the broader landscape of performance management research would not have appeared as such in the review due to this small sample size. The author’s screening of articles for such outliers was limited due to the concern mentioned above over confirmation bias. As such, care should be taken when adopting the results of the research for practical purposes.
Nevertheless, if a company’s management finds the results of the study useful, there are several avenues that it may pursue to improve its operations. In particular, it can be beneficial for businesses to reconsider their current human resource management practices and their purposes. Companies would benefit from a closer alignment between their objectives and their HR departments, which would enable them to persuade employees to perform better. With that said, the HR department also warrants criticism due to its misaligned competencies that do not necessarily contribute to performance (Sharma et al., 2017).
Once the parties come to a mutual understanding, they will likely find it substantially easier to implement performance management that effectively adheres to modern conceptions. Such a practice would justify the existence of the concept and demonstrate its validity, spurring further adoption and industry-wide improvements.
Future research can explore the topic in additional detail and provide additional context for the findings. It may confirm the notions suggested by this paper or deny them, both of which results would be valid and acceptable. The three directions identified in this paper are particularly important areas of research for future work. The interactions between performance management and other popular business approaches have to be considered in detail. The differential impacts of performance management on various aspects of performance also warrant an investigation, helping companies orient themselves better. Lastly, the communication abilities of HR workers have to be researched to understand their competencies and deficiencies. All of this research can help further the concept of performance management and make it more effective.
Conclusions
This work has evaluated the current theory behind performance management and the characteristics of its practical implementations. It considered the literature on various topics that constitute aspects of the practice as well as case studies of particular successes and issues at different companies. The results of the search were then divided into specific topics and processed using thematic analysis to create a broad yet specific overview of the topic.
The data produced a variety of results once arranged in this manner, which has both theoretical and practical implications. The strengths and weaknesses of performance management as imagined by scholars and implemented by companies were considered. The recommendations that stem from these findings were also formulated and provided in the paper.
The paper has found that, while human-resource-related performance considerations have existed for a substantial part of the 20th century, the more extensive concept of performance management has only emerged recently. Classic performance appraisals mostly aim to ensure that employees meet specific numeric criteria, which are often assigned out of their control. As a result, the practice can be demoralizing to workers, who feel disenfranchised and treated unfairly (Bellé, Cantarelli, and Belardinelli, 2017).
On the other hand, performance management includes critical terms, such as employee satisfaction and motivation. To that end, it features more transparent processes with less formality that both processes the employee’s current performance and helps them grow in the future. The HR department becomes substantially more involved in daily company work, helping steer workers in directions where they become more productive and enjoy their jobs.
Performance management includes the classic aspects of appraisals mentioned above instead of replacing them. It takes the concept of performance evaluation and expands it by redefining performance to incorporate additional factors. The traditional numerical approach of performance appraisals is no longer applicable and is expanded to incorporate less formal metrics. To avoid bias, which is nearly inevitable in these assessments, the research recommends sourcing information from multiple people (Hosain, 2016; Maghsoodi et al., 2018). Lastly, the results are communicated to workers as a part of informal day-to-day interactions with the purpose of helping them develop their competencies. It is essential to establish discussions with workers organically and focus on the future rather than the past to achieve growth.
As a result, performance management is able to generate substantial benefits compared to performance appraisals alone. Motivated employees are substantially more likely to engage in innovation, which is critical to success in the modern environment with its rapid movement. Additionally, they will seek to leave the company less frequently, minimizing disruptions that hurt its operations (Katou, 2017). These improvements are accompanied by a variety of other, less significant increases in productivity and, consequently, performance, which is nevertheless vital as they combine to form a substantial advantage. All of these benefits have been proposed in theory and proven to exist in practice. However, there are also some considerations that inhibit the success of performance management in business.
The concept of performance management is complicated and relies on many attributes that cannot be quantified easily. As a result, many managers are refusing to adopt it because of the complexities involved and a lack of understanding of the benefits (Uysal, 2016). Others attempt to do so but are misguided, resulting in environments that do not improve the company’s results. Performance management has also not been tested in all environments, and research has found that there may be misalignments between it and widespread approaches such as TQM. These failures further contribute to performance management’s professional reputation of unreliability and turn off more managers. Scholars should work on addressing the issues found in this paper, conducting additional research, and refining the theoretical framework.
Overall, performance management is an approach that warrants more widespread implementation, but managers should take care before choosing to adopt it. It is not suitable for all organizations at this time, and many businesses have to resolve underlying issues before they can competently introduce the practice.
As such, scholars and workers should work together to understand the concept better and make implementations easier. The study provides recommendations for managers as well as potential future research directions for researcher’s benefit. By following them and reviewing the results of the research, people can improve the current state of the discipline.
Recommendations and Implementation Plan
First, companies that aim to establish a practical performance management framework will need to evaluate their current procedures. The HR department should undergo a thorough audit that clarifies its functions and past activities. If it is not meeting expectations, the management should begin discussing changes and implementing them, aiming to overhaul the department’s functions.
Regardless of the result, the review should produce a framework of the performance practices and beliefs held at the department. They can be compared to the values necessary for successful performance management and adjusted accordingly. Once this step has been completed, the organization can proceed to the implementation of the new practice.
The preparation to introduce performance management should begin with training for the HR staff who are found to have inadequate communication abilities. The success of the approach depends on their ability to establish relationships of professional trust with workers, to which end these competencies are essential. As such, they have to understand the various modes of communication and know what the workers expect of them so that they can then deliver it. Additionally, it would be beneficial to teach them to collect and process employee feedback on an individual basis, adjusting their approaches in the process of continuous growth. Ultimately, they would be able to deliver satisfactory results to all workers and ensure their happiness and productivity.
For the next step, the HR department will research the concept of performance management and develop a framework for it. They will have to understand the theory, process it into a usable form, and adapt it to the company’s specifics and needs. Performance appraisal, in particular, is vital, and the department will need to collect employee opinions on the current form of the process. Based on the feedback and the theoretical assertions, the process will have to be adjusted to incorporate a broader range of variables, 360-degree assessments, and less formal nature. The experiences of other companies can be helpful in establishing a working framework that is based on experience and prior successful implementations.
The appraisal will be introduced as part of a broader framework that aims to encompass all aspects of performance management and enable synergies between them. It will feature communication practices, training and development approaches, data processing that features improved transparency, and other components. The system will aim to foster employee trust while improving their motivation and helping them grow professionally. It will be put into practice gradually, as different components are completed and enter operations. They will then be tested for effectiveness in practice and modified whenever opportunities for improvement emerge. Once the entire system is in place and confirmed to be effective, the implementation process is complete.
It will be essential to secure employee understanding and acceptance of the practice at all times. As such, the human resources department and management will make them aware of the practice and explain its benefits for the company. Feedback will be welcome throughout the implementation and after it, and it will be taken into consideration to improve the process. The initiative will aim to ensure that the employees are aware of the change and how it helps them. As such, the issues related to the framework’s acceptance will be minimized.
With that said, business is in the process of continuous improvement, and performance management will be part of that framework. To that end, it will be necessary to periodically review the performance of the system and identify any deficiencies. They will be analyzed and processed, with the management developing ways to overcome the problem. The reviews will also be accompanied by investigations of current best practices and their adoption where necessary. Additionally, improvement proposals will be taken into consideration, with their potential consequences analyzed. After acceptance, they will be refined with the help of various professionals within the company and put into practice. Through continuous review and improvement, the company will maximize the benefits of its performance management at all times.
Personal Learning Statement and Reflection
Throughout the writing of this paper, the author has expanded and cemented their understanding of performance management. They have understood the history and theoretical underpinnings of the concept as well as the details of its implementation. If asked to implement it in practice, they would now be more competent than they were before starting this paper.
The author also recognized a variety of benefits to the practice and found practical evidence of their existence. As such, if they begin working as human resources professionals, they will advocate for performance management and help implement it in practice. In doing so, they will be able to enhance the performance of the company at which they are working and help its employees grow as professionals.
The author has also been able to understand research into human resource management and, more specifically, performance management better. By reviewing numerous articles on the topic, they have been able to understand the broad consensus. Additionally, they have attained a better understanding of how scholarly work in the field is conducted, for both qualitative and quantitative studies.
Their skill at searching for information has also improved as a result of successfully finding works with different perspectives on specific topics that come from reputable sources. Overall, the author’s competencies as a scholar have improved substantially as a result of writing this paper. The knowledge gained in the process will help them in the writing of any future dissertations or similar research works.
With that said, there were negative perspectives on various aspects of performance management as well as positive ones. By reviewing and accepting them, the author was able to help develop their critical thinking, evaluating an idea from several disagreeing viewpoints. In the process, they have been able to review performance management thoroughly, finding strong points and weaknesses in both theory and practice. Opportunities for improvement in all areas emerged, and the author was able to perceive and describe them. Critical thinking will be essential in the author’s future work, regardless of its direction due to the presence of different ideas in most contexts that involve people. As such, this paper was highly beneficial for the author in multiple ways that will help them perform excellently in the future.
Personally, the author has grown substantially as a person as a result of the course that they took and this paper, which was its capstone project. They have become more competent as human resources professionals due to the knowledge that they learned. The familiarisation with both the theory behind the practice and the practical environments where it can be applied enables them to be more confident in their ability to perform at the job and introduce meaningful, positive change. The aforementioned critical thinking skills will enable them to introduce better-considered initiatives and evaluate those proposed by their colleagues. As a result, their competencies will expand further, and they will be able to attain recognition and grow as a professional.
With that said, the process also exposed some issues in the author’s performance that may need to be addressed before they can consider themselves entirely competent as a professional. The consideration of personal communication skills needed for HR work has led the author to think about their abilities in the field. They have found that they lack in that department, preferring to communicate at work in a formal and professional manner. They also sometimes do not adequately review and accept others’ opinions, choosing to dismiss or misrepresent them during a discussion. This trait can be problematic when they are trying to implement a new approach and receive feedback that disagrees with their opinion. As such, they should begin work on amending that problem and improving their overall competencies.
In the future, the author will begin work to capitalize on their strengths and reduce their weaknesses. They will conduct additional research into various human resource management concepts that they do not understand entirely. In the process, they will review and compare various sources critically, forming their unique opinion. Additionally, they will begin to try communicating with their colleagues informally and listening to their concerns, bringing the valid ones to the parties responsible for such matters. To assist in the process, they will undertake a communication skills course and complete it, participating in various scenarios and learning different modes of communication. They will review their progress regularly, evaluating their current abilities and modifying the curriculum to accommodate their current concerns.
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