A Performance Management (PM) system enables the business to measure, manage and optimize its performance and profitability by relating the employees' pay to competency and contribution. It ensures a conducive business environment-enabled healthy performance and brings all the employees under a single strategic umbrella. Integrating the components of PM and managing it effectively isn't easy. In reality, companies have realized that it requires a high level of coordination between information-sharing and timely review.
Performance management is considered as the heart of any "people management" issue in an organization. It encompasses the entire relationship of the organization with its employees. PM is the process of creating a work environment where people are encouraged to perform to their fullest potential and rewarded for their effectiveness. It is a broader work system that begins when proper job descriptions are developed and expectations are clearly communicated to the employee and ends when he leaves the company.
Performance management is a substitution for the traditional performance appraisal system as the focus shifts towards the entire spectrum of development issues in an organization. An effective PM system comprises employee performance development, training, cross-training, provision of challenging assignments and regular performance feedback. |
