Evolution Of Performance Appraisal Essay

2.1 Evolution of Performance Management

Performance management is a multidisciplinary field, there is a varied group of complementary disciplines and equivalent theories. Strategic Management, Operations Management, Human Resources Management and Organizational Behaviour are all contributing to the field of performance management (Smith and Goddard, 2002; Thorpe and Holloway, 2008). For example, in the Human Resource Management (HRM) literature, the goal of performance management involves aligning HRM practices so that employee performance and development are enhanced, with the aim of maximizing organizational performance, whereas in strategic management, the importance of performance management lies in the formulation of firm objectives and

Performance management has its origins in systems of performance appraisal. Performance appraisal has existed for many years and revolves around an evaluation and review of the objectives of an organization by managers and subordinates (Atkinso, Waterhouse, and Wells, 1997). It is often believed that performance appraisal is the same as performance management, but there are significant differences between them (Armstrong, 2006). Moreover, according to Mone and London (2010), many researchers and others engaged in this field continuously use the term ‘performance management’ interchangeably with ‘performance appraisal’ and other forms of performance assessment including performance evaluation, performance monitoring, and performance reporting (Halachmi, 2005; Pollitt, 2005; Wholey, 1999). However, one should not confuse performance management with performance appraisal and evaluation. According to Armstrong (2006), the basic distinction between them is that in performance appraisal and evaluation, managers usually assess and rate employees’ performances in an annual review meeting whereas performance management is more comprehensive and continuous process of management. Over time, performance appraisal has become one dimension of more integrated systems of performance management (Guest, 2011). Therefore, the idea of performance management is a more recent development with a future

The word “system” is important because it implies that all performance management practices belong to a set of entities forming an integrated whole that links individual behaviour to the organizational objectives. Traditionally, performance management systems have been implemented as a means of managing and measuring the performance of individuals or teams by providing clear accountability and measures on which to assess performance. The intent is that such systems support the strategy and goals of the organization, and that by having a transparent system, all employees are encouraged to contribute, individually or in groups, to the strategic direction of the organization. PMS has been defined as ‘an integrated set of planning and review procedures which cascade down through the organization to provide a link between each individual and the overall strategy of the organization’ (Smith & Goddard 2002, p. 248). Thus, this definition will be adopted in this