Performance management is an important process for establishing a mutual understanding what is to be attained in the organization. Implementing the performance management system in an organization is very challenging task for its human resource management department. This essay reviews the literature on the performance management and the challenges, which the organization faces in implementing the performance management practices. Implementation of objective and effective performance management system assists the employers in communicating the expectations and desired results to the employees. In turn, it drives better performance level from the employees. Here are some of the major challenges to consider, when improving and implementing the process of performance management system. The further study includes resistance to change, poor alignment, and lack of management and leadership support, absence of integration and skills and abilities gap. There is the discussion about a survey, which was conducted in Australia with various organizations.
Performance management has become a significant part of Human Resource Management in today’s dynamic working environment. An effective performance management prepares and energizes the people to obtain the responsibility of their own performance and achievement of better results. According to Armstrong (2010), it can be argued that performance management is a process for managing the performance. It can be considered as the natural function of dealing that includes the processes of planning, evaluating, monitoring and reviewing. This term is used in general not mechanistic. The justification for this statement is that it needs the implementation of various interrelated activities, which are managed with as a whole (Arnaboldi, Lapsley & Steccolini, 2015). It is analysed that performance management is used to improve the quality and performance of an organization. A study describes that for successful implementation, performance management system of an employee should balance the flexibility and consistency. The challenges of performance management in companies have different dimensions in this business era and developing focused solutions to overcome these challenges is not very easy. Ngumbau (2013) explains that there are some features, which lead the performance management system to failure, like; lack of transparency, poor motivation, unfairness, lack of communication and equity (Ngumbau, 2013).
According to Armstrong (2010), resistance to change is a major challenge for the organization. Generally, the employees do not accept the changes easily and they resist them. The only constant business in life is change, which could be small or large, planned or unplanned, slow or rapid, controlled or uncontrolled from a new system. The change management of performance management system can be managed strategically (Armstrong, 2010). The top management should manage drive the change process. The organization has to manage the resistance to change proactively.
According to Rajendran (2017), other challenges, which the organization faces in the process of implementation of performance management, are poor alignment and absence of integration, lack of management and leadership commitment, incompetence and skill gaps. Furthermore, Rooyen (2017) explained that management and leadership has a large impact on aligning and integrating system to deliver an effective performance management system. Managing the performance management system in an organization needs a disciplined structure. It requires the company to work on master plan shattered in different areas and parts of the responsibility (Armstrong, 2008).
There may be the lack of proper alignment due to different organizational processes. The connection between budgeting, strategic development and operational planning is developed by different teams of people with different structures, which are being used (Rooyen, 2017). In an organization, performance management system lacks arrangement between management performances, individual performance and organizational outcomes. Another thing, which can happen at many levels of the organization, is that poor standards for measurements are developed (Ngumbau, 2013). There may be some cases, in which objectives are set but no related measures are put in the place. In another cases, no information is gathered or stored as proof to track the performance. The understanding of management and leadership of the needs for attaining an efficient performance system is important to the success of performance. Lack of measurements can also work as the threat in this process (Panda & Reddy, 2016). It happens at all the levels of the organization, when the poor measures are developed. There may be many cases, in which the goals are set, but there are no relevant measures in the place. In another cases, there may be a situation, where no data can be gathered and kept as the proof to evaluate the performance.
Furthermore, Reynolds (2004) critiqued that gaps in the skills and abilities can create the issues in the performance management system of the organization. Learning and improvement are related to each other. The people, who are involved in the process of performance management system, should possess required skills, abilities, attitudes, knowledge and aptitude to use that system. In an organization, it happens so many times that people in the process do not understand the process and not able to use the system (Buckingham & Goodall, 2015). The required skills are like; management competencies, key performance indicators, key outcomes, communication of feedback and results and assessment and measurement of the performance system. In this process, the management gives the special emphasis on the development of behavioural aspects and soft skills. The employers should implement effective strategies to overcome these challenges like; training and development program, employee engagement program and other events (Rooyen, 2017). The employers can manage the challenges associated with the performance management by implementing an effective recruitment and selection policy.
According to Grogan (2015), a study was conducted about performance management system, which includes various companies of Australia. The survey concluded that companies are making some radical changes in the performance management system, which will help the organizations to overcome these challenges. These changes are like; removing the performance ratings, eliminating the link to rewards and avoiding the annual performance review cycle. Some of the Australian organizations are like; CSL limited, Asciano Limited etc. The employers should implement some alternative solutions to overcome the challenges of performance management system. According to the interviews, which are conducted with the employees of an organization, there are some more issues, which can be seen in the performance management process, for example; less involvement of the supervisors and middle level managers in managing the performance in the organization (Behery, Jabeen & Parakandi, 2014). Most of the people in interview said that supervisors lacked the skills in performance management and they do not have right attitude and support for the system. Generally, the people think that performance management is the only responsibility of Human Resource Management Department. For effective implementation of this system, the company has to establish a metrics, which is measurable and it need to link into the strategic plan of company (Bagul, 2012). Strategic plan helps them to get the focus on the things, which the company wants to achieve. It has to make balance between long term and short term metrics.
Armstrong & Baron (2002) stated that the organization should operate the performance management system flexibly to deal with the different situations. This process has to be accepted by all the employees as component of effective management and employment practice. The organization should operate it justifiably and fairly. The firm should develop a flexible performance management system, which can include basic competencies, like; type, basic attributes quality of behaviours and skills (Hendry, 2012). These are the core competencies, which employees are expected to show so they can achieve organizational objectives. Furthermore, for easy implementation of system and production of desired results, it has to be very simple and clear. It needs required skills and abilities for effective implementation of the performance management system. The system should be supported by the leadership and management. The leaders should commit effectively in the implementation process (Rajendran, 2017). They should be motivated to enhance the ability to create a collective vision, motivate the staff and create an effective performance management system, which drives the whole organization towards its overall objective. Each and every organization should try to operate these practices at the work place and motivate the employees towards the change. It will make the system more resulting and effective.
Conclusion
Thus, it hereby concludes that organizations are facing various challenges in the implementation process of performance management system. All the people will not be comfortable with the implemented changes, so it can create issues for the organization and top management. So, the employers should focus on its employees for enhancing their skills and abilities to work with the changes. From the study, it was found that organization faces the challenges at each phase of the performance management system, such as; planning, monitoring, development, evaluation and reward management. The organizations should understand that a successful performance management system needs an effective dedication from the top management, Human Resource Management Department and managers. The management can use various methods and processes to implement successful performance management system.
References
Arnaboldi, M., Lapsley, I. & Steccolini, I., 2015, Performance management in the public sector: the ultimate challenge, Financial Accountability & Management, 31(1), pp.1-22.
Armstrong, 2010, An Evidence-based Guide to Delivering High Performance, Kogan Page Publishers.
Armstrong, M, 2008, Performance Management: The New Realities. Institute of Personnel and Development, London.
Behery, M., Jabeen, F. & Parakandi, M, 2014, Adopting a contemporary performance management system: A fast-growth small-to-medium enterprise (FGSME) in the UAE, International Journal of Productivity and Performance Management, Vol. 63 Issue 1.
Buckingham, M. and Goodall, A., 2015. Reinventing performance management. Harvard Business Review, 93(4), pp.40-50.
Bagul, D.B, 2012, A research paper on “study of employee’s performance management system, Scholarly Research Journal for humanity Science & English Language.
Hendry, C., 2012. Human resource management. Routledge Publishers.
Ngumbau, M.D, 2013, Challenges of implementing performance management system at the Kenya electricity generating company (Kengen) limited, retrieved from https://chss.uonbi.ac.ke/sites/default/files/chss/MWENDANDU%20DANIEL%20D61-63756-2011_0.pdf.
Panda, S. & Reddy, K.J, 2016, A study on impact of performance management system on organization, International Journal of Industrial Management, vol. 2, pp. 1-6.
Rajendran, K, 2017, Challenges in Implementing a Performance Management System, Enterprise Risk Management Academy.
Rooyen, M.V, 2017, Five Challenges in implementing Performance Management, Performance Management Innovations.
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