Arobust performance management system is one of the key, difficult to imitate competitive strategies within the domain of Human Resource Management (HRM). Despite the obvious importance of performance management, the process has largely been a `failure' in the eyes of both employers and employees as backed by numerous surveys. Lack of precision in measurement, customer focus and consideration of situational constraints are the major reasons for the failure of this process. Performance appraisal processes are `typically seen by raters as extra work; and by ratees as at best irrelevant, at worst demotivating'.
By clearly defining, measuring and thereafter rewarding desired behaviors and competencies, organizations can set themselves apart from the competition. In line with the change in its name from performance appraisal to performance management or development, the objectives of the process are linking performance to organizational objectives and strategies, employee feedback, identifying development needs and determining rewards.
With regard to feedback, the biggest concern of those in line for appraisals is that the impact of circumstances are not fully taken into account by the appraisers. As a result, they cannot agree on what needs to be improved and how, leading to demotivation. In addition, the enormous administration and time burden imposed by bureaucratic systems further erodes the confidence required to make it meaningful and successful.
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