Performance Management as a HR Management Concept
The very mention of appraisals, reviews and ratings is enough to make seasoned professionals cringe and rejoice alike. For some, these are occasions when they would come out smiling out of the review whereas for others, there is nothing memorable about the whole process. So, what is it that is so important about performance management?
For starters, performance management is the process of reviewing an employees performance during the preceding year or cycle and deciding where he or she stands as far as their peers in the same band are concerned.
The process of reviewing results, arriving at a rating and then deciding upon the bonus or salary hike is what performance management is all about. Before we look at the topic sentence, it is important to understand what goes into the decision making process and who is involved in the same.
Typically, the process of performance management starts a month or two before the appraisal cycle ends. The appraisal cycle can be half-yearly or yearly depending upon the policies of the organization. Further, the appraisal cycle can be based on the calendar year or the financial year i.e. it can run from April to March of the following year or January to December of the same year. In the same vein, it can be half-yearly as well.
There are different rounds to the appraisal process.
What we have described in the above paragraphs is the way the system ought to work. However, as any HR professional or Industry magazines would tell you, the performance management process as it exists in many organizations leaves a lot to be desired.
In fact, surveys and studies have found that the majority of employees who quit organizations do so because of differences over their ratings. In other words, attrition is in many cases a direct consequence of the way in which the performance management process is managed.
The question as to why this happens can be best understood if we understand the dynamics inherent in the process. For instance, despite exhortations from HR professionals and experts about letting personal biases and prejudices affect the process, in many cases, if the manager and the employee do not see eye to eye on many issues, the appraisal and the ratings are the place where this difference of opinion comes out into the open.
Further, the organizations are themselves to blame in some cases as the process of normalization means a winner takes all approach which leaves the moderate performers bracketed with the poor performers. The point here is not to belittle the competitive environment that is the reason for this. On the other contrary, what is needed is a more holistic approach towards performance management that takes into account the varying needs of employees and a broader appreciation of differing working styles and motivations.
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