After a research conducted in 2011, researchers found out that the practitioners of performance management were of the following views −
● We are expecting the line managers to recognize performance management as a useful contribution to the management of their teams rather than a chore.
● Managing performance is about coaching, guiding, motivating and rewarding colleagues to help unleash potential and improve organizational performance. Where it works well it is built on excellent leadership and high quality coaching relationships between managers and teams.
● Performance management is designed to ensure that what we do is guided by our values and is relevant to the purposes of the organization.
Guiding Principles of Performance Management
It is necessary to identify any causes that are external to the job and outside the control of either the manager or the individual. Any factors that are within the control of the individual and the manager can then be considered.
First, the entire performance management process – coaching, counselling, feedback, tracking, recognition, and so forth – should encourage development. Ideally, team members grow and develop through these interactions. Second, when managers and team members ask what they need — to be able to do to do bigger and better things — they move to strategic development.
The researchers also got the following additional views from practitioners about performance management −
● A management tool which helps managers to manage.
● Driven by corporate purpose and values.
● To obtain solutions that work.
● Only interested in things you can do something about and get a visible improvement.
● Focus on changing behavior rather than paperwork.
● It’s about how we manage people – it’s not a system.
● Performance management is what managers do: a natural process of management.
● Based on accepted principles but operates flexibly.
● Success depends on what the organization is and needs to be in its performance culture.
Performance Management is NOT Performance Appraisal
It is sometimes assumed that performance appraisal is the same thing as performance management. But there are significant differences.
● Performance appraisal can be defined as the formal assessment and rating of individuals by their managers at, usually, an annual review meeting.
● In contrast, performance management is a continuous and much wider, more comprehensive and more natural process of management that clarifies mutual expectations, emphasizes the support role of managers who are expected to act as coaches rather than judges and focuses on the future.
Performance appraisal has been discredited because too often, it has been operated as a top-down and largely bureaucratic system owned by the HR department rather than by line managers. It was often backward looking, concentrating on what had gone wrong, rather than looking forward to future development needs.
Performance appraisal schemes existed in isolation. There was little or no link between them and the needs of the business. Line managers have frequently rejected performance appraisal schemes as being time consuming and irrelevant. Employees have resented the superficial nature with which appraisals have been conducted by managers who lack the skills required.
Psychological Contract with Performance Management
The concept of psychological contract is a system of beliefs that encompass the actions employees believe are expected of them and what response they expect in return from their employer. It is concerned with assumptions, expectations, promises and mutual obligations. Psychological contracts are ‘promissory and reciprocal, offering a commitment to some behavior on the part of the employee, in return for some action on the part of the employer.
A positive psychological contract is one in which both parties – the employee and the employer, the individual and the manager – agree on mutual expectations and pursue courses of action that provide for those expectations to be realized.
A positive psychological contract is worth taking seriously because it is strongly linked to higher commitment to the organization, higher employee satisfaction and better employment relations. Performance management has an important part to play in developing a positive psychological contract.
Performance management processes can help to clarify the psychological contract and make it more positive by −
● Providing a basis for the joint agreement and definition of roles.
● Communicating expectations in the form of targets, standards of performance, behavioral requirements (competencies) and upholding core values.
● Obtaining agreement on the contribution both parties have to make to get the results expected.
● Defining the level of support to be exercised by managers.
● Providing rewards that reinforce the messages about expectations.
● Giving employees opportunities at performance review discussions to clarify points about their work.