This work aims to explain a performance management plan and how it is formulated and expressed to rate the business’s general performance. It compares and contrasts the two forms of performance management; compliance-based and relationship-based performance. The paper uses research methodology where facts are obtained from peer-reviewed journals to help distinguish the two categories. In addition, it uses general views from the lesson and the author’s thinking about performance management.
Performance management is critical because it states the rules to be followed in an organization and how each party contributes to the performance of the business. This work targets the importance of a relationship-based strategy in performance management and elaborates why a company should transit from the compliance-based system to heighten its achievements. Finally, the work summarizes why a business organization needs to have a performance management system.
The success of most businesses has been attributed to the performance management plans formulated and executed by them. Performance management is defined as the attributed qualities demanded by a company towards the execution of its transactions. The performance plan consists of guidelines on the step-by-step process of carrying out an activity (Franco-Santos & Otley, 2018). Such protocols have to be observed by every company employee to ensure a continuous workflow with high success rates as the management expects.
For a business to be successful, it should be well structured, and employees must conduct themselves as the management directs. These protocols followed by the employees are considered performance management, and they dictate the level of business success depending on how well the employees stick to the standards placed. Performance management is differentiated into compliance and relationship performance management.
Compliance performance management is a type of performance management that requires the employees to perform their duties strictly as the management directs. The activities of each employee are defined and well planned by the management. For instance, the employees in a manufacturing company are given procedures for carrying on with the manufacturing operation. An employee cannot present unique ideas but must cling to the strategies presented. Compliance performance management is created by top-level managers who fail to allow the employees to participate in the decision-making process about the running of the business (Blackman et al., 2017). A compliance performance management plan is given to the middle-level managers. They explain its contents to the subordinates and make sure that each staff understands their roles correctly.
Conversely, relationship-based performance management depends on the connection between the employees and their management. The management observes the strengths of each employee and helps them specialize in those areas for maximum performance. Top-level managers engage the employees in the decision-making process, identify their likes and dislikes and work with them towards achieving the goals set in every activity. Aiding the employees in identifying their strengths and weaknesses facilitates business development in the production sectors (Lauritsen, 2020). Relationship-based management generally involves the staff in deciding on the business’s future. It enables the growth of ideas incorporated in conducting duties as per the plan accumulating better performance from both parties.
The process of performance management involves three primary steps to be successful. Setting goals, monitoring the progress of the events, and evaluating the final results of the events are the steps involved in performance management (Lauritsen, 2020). Setting the goals is the initial stage where the management sets straight the objectives and lays down a plan on how the organization runs its activities towards a specific goal. The managers mandate the staff with roles and provide them with information and tools to facilitate their work.
After assigning the parts, the following process monitors the work’s progress, observing whether the workers are doing their designated job well or needing extra resources to continue progressively. At this stage, the directors decide whether to continue with the activities, depending on the outcome level. If the estimated effect at this stage may be hazardous or lead to losses, the leaders are forced to terminate the proceedings (Lauritsen, 2020). In the final stage, the business results are determined and evaluated to monitor the actual investment spending, wastage level, profits, and adverse outcomes.
If the company reviewed their strategy to operate the business, it would conclude that it is time to change from the old compliance-based approach to a relationship-based process. One, the compliance-based method does not allow the growth of employees in the business because it does not encourage their creativity and innovation. The management forces the employees to stick to their guidelines and does not involve them in the planning process.
Prohibiting employees from contributing to the planning process degrades them and makes them feel like they are not part of the business community (Lauritsen, 2020). They even opt for other alternatives which lower the success grate of their performance. Compliance-based strategy interferes with employee satisfaction and also underrates the performance appraisal.
Additionally, the compliance-based strategy hinders accurate performance monitoring because the process is only viewed from the manager’s eye. An employee may find it aggressive to formulate their alternatives in case of an emergency during the operations. The performance process slows down because time is spent consulting and waiting for directives from above because employees have to seek permission repetitively.
It becomes monotonous, and employees fail to project their success or failures in conducting business activities (Lauritsen, 2020). The management is also prevented from identifying its strong and weak employees. Therefore, compliance-based performance management is currently not suitable for the business’ progress.
As an alternative for using the compliance-based strategy, the company should use a relationship-based performance strategy. The strategy is suitable for the company because it achieves its objectives and employees’ welfare. The process promotes a mutual relationship between the management and its staff. A good employer-employee relationship advances business operations resulting in an acceptable performance. Using the strategy creates a commending environment for the formulation of plans that go in line with the performance of both parties. Employees manage themselves and work hard towards achieving the goals targeted because they were part of the committee that formulated the laws (Lauritsen, 2020). The company should employ the strategy since it encourages employees to contribute freely to the business’s success.
Second, after using the relationship-based strategy informing the business plan, the company should use the same method to monitor its progress in its activities. The managers discover areas where the concentration of the staff population and resources is required. Managers will additionally identify the scope that deserves shifting of resources. Human resources should be treated fairly and associated with the relationship-based strategy to promote their esteem during working hours as the most critical resources in an organization. Employees require caring managers who frequently visit them and know how they are faring. This way, the workers feel secure and are more prompted to give their all to keep a thriving business. Operations conducted using this strategy have gained popularity among other companies. This is because employees are aware that their needs are met and have no reason to focus on other issues, hence a higher probability of success.
Moreover, a relationship-based strategy promotes employees’ performance appraisal after evaluation of the results. Those working effortlessly towards the organization’s prosperity should be appreciated, while their team leaders should coach those leading to business failures to ensure an effective business plan. Performance appraisal encourages the employees to run the workability of the business and motivates them to improve in the next cycle. Today, to maintain workers in an organization, one has to identify the employees’ strengths and weaknesses and balance each staff to increase performance efficiency. During this stage, employees also familiarise themselves with their strengths and weaknesses and direct their energy towards correcting their weak points. The strategy translates to a self-realization stage among the employees and boosts their understanding, and promotes personal skills such as decision making.
During the evaluation of the relationship-based strategy, the company identifies the right employees for promotion. The business locates employees for promotions depending on how the employees manage themselves to offer quality performance. Reviewing the performance more regularly helps improve the employee’s output and both the management and workers enjoy. Employees identify areas that employers need to enhance and inform them to find alternative measures to strengthen the relationship between them (Blackman et al., 2017). The management tells the employee about their contribution to the business’s success and assigns duties to each of them based on their ability. It, therefore, gives the employees the direction to follow.
I recommend that the company changeover from the compliance-centered strategy into adopting relationship- grounded performance administration because employees better understand and clarify their roles in the business’s operational success. All subjects received a feeling of direction, and the organization became closer to reaching its goals during working time. Relationship-based tactics enable leaders and followers to recognize significant areas of concern and respond ahead of time to avoid damage. The company must involve itself in performance management through the relationship-based strategy to place itself in the top list of the modern-day business class.
Blackman, D., Buick, F., & O’Donnell, M. (2017). Why performance management should not be like dieting. Australian Journal of Public Administration, 76(4), 524-528. Web.
Franco-Santos, M., & Otley, D. (2018). Reviewing and theorizing the unintended consequences of performance management systems. International Journal of Management Reviews, 20(3), 696-730. Web.
Lauritsen, J. (2020). Creating a performance management process that works. Web.