TOPIC 5: PERFORMANCE MANAGEMENT SYSTEMS

Assalamualaikum.

Hi everyone! Today, my topics are PERFORMANCE MANAGEMENT SYSTEM (PMS). According by Neely et al. (1995) performance management system (PMS) defined as “a set of metrics used to quantify both the efficiency and effectiveness of actions”. PMS is a process to enables organization to plan, measure and control their performance to achieve desired results (Bento and Bento, 2006). By other researcher’s definition, PMSs are a means of executing organizational strategy by signaling to employees what is really important in the organization, fixing accountability for behavior and results, and helping to improve performance (Biron et al., 2011; Bae, 2006).

In my opinion, PMS is a system used by the organization to make the process of assessing, planning, and monitoring the performance of employees and management to ensure the efficiency of their target or achieve the results they want. They will assess the current performance of employees and management whether increase, decrease or consistent.

            PMS can be defined as a systematic process which organization involves their employees to improve the effectiveness of the organization by focusing the employees to achieve the organization plan such as mission, vision, objectives and strategic goals.

Advantages of PMS’s are to motivate employees to improve their performance and achieve organizational goals. By using PMS, organizations can increase profits because employee’s performance is always effective and less mistakes. In addition, creating healthy competition among employees in the organization and the quality of work done is good and satisfied employees.

But, for me this system also has the disadvantage namely increased turnover. When I look, if the process is not seen as fair, the employees may become upset and leave the organization. That means, they can leave physically (quit) or with draw psychologically such as minimize their effort until they are able to find a job elsewhere.  Other than that, this system wasted time and money because these resources are wasted when systems are poorly designed and implemented.  In addition, this system also unclear ratings system because of poor communication, employees may not know how their ratings are generated and how the ratings are translated into rewards.

As the conclusion, performance management system can give benefits to organizations, managers and employees. Performance will be better workers and productivity will increase, thus reducing mistakes during work activities. Assessment of the labor can be done easily and the employee can show their skills and competencies at any time. Although this system has its disadvantages, but if improved and well manage, then the result is effective and successful.

References:

1. Dipak Kumar  Bhattacharyya. (2011) Performance Management Systems and Strategies. Pearson Education.
2. T. V. Rao. (2004). Performance Management and Appraisal Systems: HR Tools for Global Competitiveness. Sage Publications.
3.  Armstrong, M. (2006). Performance management: Key strategies and practical guidelines (3^rd ed.). London: Kogan Page.
4. Herman Aguinis (2009),  Performance Management  Second Edition, Pearson International Edition
5. Kramar, Bartam, et al. (2010). Performance Management. Human Resource Management in Australia, Ed 4, McGraw Hill.
6. Elizabeth C. Pope. (2005) HR How-to: Performance Management. CCH Incorporated.