Literature Review: Effective Performance Management System

Introduction

This first chapter discusses about the literature review by analyzing the past and recent knowledge of specific topics. Previous articles, journals were browsed in order to give a clear understanding of the areas of the field that have been pursued. There are also secondary surveys that have been interpreted by famous authors who wrote articles related to the title. The purpose of the review is to define and limit the problem we are working on and furthermore to relate the findings to previous accrued knowledge and suggest further research. The aim of this review is to evaluate the effectiveness of PMS and whether it is designed to cater for the needs of employees and organizational strategy.

Definition of Performance Management

A cumulative two-way discussion and written documentation focusing on employee performance: areas of excellence, goals for improvement and development needs.

Effective Performance Management System

Performance management system is employed for many reasons and for it to be effective the main purpose of the system must be clearly stated and communicated within the organization. It is important that the firm assist employees to achieve superior performance by providing a supportive environment as well as other extrinsic motivators.

According to Furnham, 2004, for a PMS to be effective, links to pay, succession planning, organizational strategy and performance objectives must be clearly set.

According to Armstrong (1994 p.17), for performance management to be effective, it must direct the vision of all managers and employees towards a common goal. It must ensure that the higher levels understand what is expected from its subordinates. Moreover it must motivate each manager to maximize efforts in the right direction.

Strebler et al (2001) suggested that the following principles were imperative for performance management to be

Peter McLaughlin (2007) proclaimed that “...feedback conversations are essential. They force the team to come face to face with the problems that cause the team to underperform, and rise out of the swampland to a higher level of productivity – and a more enjoyable work environment.

Research has shown that those who receive more frequent and specific performance feedback and coaching are better performers than those who do not (Locke &Latham, 1990; London, 2002). Moreover, effective performance feedback has the ability to enhance employee engagement, motivation, and job satisfaction (Aguinis, Gottfredson, Joo, 2011).

According to Du Plessis, Beaver, and Nel (2006), providing feedback and coaching at quarterly reviews during the year is better than surprising employees with shocking performance ratings at the end of the year when it is too late for any corrective action.

Employees want to receive feedback in a non-judgmental and non-threatening educational manner which fosters a productive manager / employee relationship. Employers should be sensitive to this, offering return feedback in the same manner. Expressing disappointment or anger, verbally or non-verbally can push towards counter-productivity. Managers and supervisors should be specific when offering criticism for poor performance and be just as specific when offering praise (Anonymous,