Benefits of a Performance Management System

A good performance management system works towards the improvement of the overall organizational performance by managing the performances of teams and individuals for ensuring the achievement of the overall organizational ambitions and goals. An effective performance management system can play a very crucial role in managing the performance in an organization by:

Ensuring that the employees understand the importance of their contributions to the organizational goals and objectives. Ensuring each employee understands what is expected from them and equally ascertaining whether the employees possess the required skills and support for fulfilling such expectations. Ensuring proper aligning or linking of objectives and facilitating effective communication throughout the organization. Facilitating a cordial and a harmonious relationship between an individual employee and the line manager based on trust and empowerment.

Performance management practices can have a positive influence on the job satisfaction and employee loyalty by:

Regularly providing open and transparent job feedbacks to the employees. Establishing a clear linkage between performance and compensation Providing ample learning and development opportunities by representing the employees in leadership development programmes, etc. Evaluating performance and distributing incentives and rewards on a fair and equated basis. Establishing clear performance objectives by facilitating an open communication and a joint dialogue. Recognizing and rewarding good performance in an organization. Providing maximum opportunities for career growth.

An effectively implemented performance management system can benefit the organization, managers and employees in several ways as depicted in the table given below:
Organizations Benefits Improved organizational performance, employee retention and loyalty, improved productivity, overcoming the barriers to communication, clear accountabilities, and cost advantages. Saves time and reduces conflicts, ensures efficiency and consistency in performance. Clarifies expectations of the employees, self assessment opportunities clarifies the job accountabilities and contributes to improved performance, clearly defines career paths and promotes job satisfaction.

Managers Benefits Employees Benefits

Clearly defined goals, regular assessments of individual performance and the company wide requirements can be helpful in defining the corporate competencies and the major skill gaps which may in turn serve as a useful input for designing the training and development plans for the employees. A sound performance management system can serve two crucial objectives:

Evaluation Objectives

By evaluating the readiness of the employees for taking up higher responsibilities. By providing a feedback to the employees on their current competencies and the need for improvement. By linking the performance with scope of promotions, incentives, rewards and career development.

Developmental Objectives

The developmental objective is fulfilled by defining the training requirements of the employees based on the results of the reviews and diagnosis of the individual and organizational competencies. Coaching and counseling helps in winning the confidence of the employees and in improving their performance, besides strengthening the relationship between the superior and the subordinate. In a nutshell, performance management serves as an important tool for realizing organizational goals by implementing competitive HRM strategies. It helps in aligning and integrating the objectives with the KPIs in an organization both vertically and horizontally across all job categories and the levels and thus helps in driving all the activities right from the bottom level towards one single goal Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans. 2. The supervisor analyses the factors behind work performances of employees. 3. The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. 2. 3. 4. 5. 6. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc. To identify the strengths and weaknesses of employees to place right men on right job. To maintain and assess the potential present in a person for further growth and development. To provide a feedback to employees regarding their performance and related status. To provide a feedback to employees regarding their performance and related status. It serves as a basis for influencing working habits of the employees.

To review and retain the promotional and other training programmes. Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case. 2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority. 3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes. 4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard. 5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways: a. Through performance appraisal, the employers can understand and accept skills of subordinates. b. The subordinates can also understand and create a trust and confidence in superiors. c. It also helps in maintaining cordial and congenial labour management relationship. d. It develops the spirit of work and boosts the morale of employees. All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a
persons efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

What Are the Benefits of Performance Appraisals to the Organization?

by Lisa Bigelow, Demand Media

The performance appraisal may provide additional training opportunities.

The performance appraisal is an essential part of the human resources department's contribution to an organization. An effective appraisal may not only eliminate behavior and workquality problems, it can motivate an employee to contribute more. Often, a company will ask its employees to perform "360-degree feedback" that assesses peers and subordinates as well as supervisors and

management. Regardless, the opportunity to receive -- and give -- constructive criticism shouldn't be ignored.

Improving Communication
All too often, employees and managers don't get along and can't understand why. Problems that stem from a lack of communication can sometimes be resolved with a performance appraisal. If the appraisal is used as an opportunity to describe the criteria on which performance is judged -- using meaningful and relevant examples -then the employee will walk away from the meeting with a better understanding of how to best perform his job. For example, "John, when I say you need to be more customer-focused, what I really want is to see you greet the customers with a smile when they enter the store, and ask how you can help."

Providing a Career Path

The performance appraisal is the perfect opportunity to address long-term goals that may not be on the everyday to-do list. Not only does this provide the employee with an opportunity to be of greater use to an organization, the employee feels pleased and valued. Lighting the way toward a successful career path inspires loyalty and stability and can improve the bottom line, especially when the employee's first concern is the health of the business, and subsequently, her career.

Encouraging Good Work and Improvement

Celebrating a job well-done is the easy part of the performance appraisal. Noting areas of improvement is not so easy. Nevertheless, no one is perfect, and the performance appraisal is an ideal time to diplomatically highlight areas that need improvement. Even the most valuable employee could benefit from additional training, while those who are on the cusp of dismissal need the heads-up. Be specific by providing examples and clearly explain what needs to occur to turn things around. Showing an employee that you care enough about them by taking the time to work with them may make even the most hardened employee feel better.

Improving Decision-Making Ability

When a company has detailed information on employee performance, business decisions become easier. Filling open positions with existing staff strengthens the organization and promotes loyalty. Knowing which employees display what strengths improves the speed with which projects can be assigned. Appraisals also provide a framework when making decisions about compensation -- and layoffs. If the organization becomes the unfortunate party to a lawsuit, the performance appraisal can refute or support claims. As a result, the effective use of performance appraisals helps an organization operate efficiently and with focus. By: Sharon Armstrong , Sharon Armstrong and Associates sharon@sharonarmstrongandassociates.com Published: July 2005 Sharon Armstrong takes us through the benefits of conducting a downward performance appraisal - the benefits to the organization, to the supervisor, and to the employee himself or herself.

Organization Communicates corporate goals

Supervisor Builds management skills

Employee Finds out how theyre doing

Provides management with decision-making information on human resources Provides objective basis for raises, promotions, training, and other personnel actions Builds stronger working relationships Improves overall organizational productivity Provides documentation for inquiries on general promotion policies or individual claims of discrimination

Develops and improves rapport with Provides recognition for employees accomplishments

Identifies and rewards high performers Identifies performers needing improvement for coaching/training Improves individual employee productivity Identifies general training needs Demonstrates fairness to employees Improves group morale Rate this item: Comments:

Allows for two-way communication on goals and performance Encourages taking responsibility for their performance and progress Helps set goals and direct efforts Provides opportunities for career development and improvement Assures fair individual evaluations

SECTION 8.15: THE BENEFITS OF PERFORMANCE EVALUATIONS Last Update: 11/11

The performance evaluation benefits the employee, the supervisor, the agency, state government, and indirectly, the public.

Performance evaluation benefits the employee by: Translating job duties into specific performance expectations (goals/strategies). Describing the agencys mission and showing how the employees job contributes to it. Prioritizing and clarifying the employees job duties, goals, and roles.

Providing a formal opportunity to inform the supervisor about barriers to work accomplishment. Outlining the expected performance standard and how the employee will be evaluated. Identifying resources and tools needed to improve performance. Providing meaningful job performance feedback. Providing an opportunity to give feedback or present new ideas to the supervisor. Recognizing work achievements and strengths. Laying out a plan for future career development. Serving as an assessment on which to base a pay increase decision.

Performance evaluation benefits the supervisor by: Communicating job performance expectations, standards, and evaluation criteria to all parties involved. Reinforcing the employees accountability for job performance. Identifying potential in employees to be developed, enhanced, and encouraged. Providing a means of either encouraging the employee to continue good work or to change/improve in areas that dont meet expectations. Providing an opportunity to paint a picture of past performance and lay a roadmap for planning and development. Serving as formal documentation of numerous personnel actions such as training needs, performance improvement needs, recognition of goal accomplishment and exceptional performance, pay increases, job redesign, and discipline. Gaining insight into what motivates employees. Employees providing feedback on how to improve processes and bringing up new ideas.

Performance evaluation benefits the agency by: Communicating the agencys strategic plan and linking it to employee performance. Improving the agencys overall performance.

Identifying competency needs and performance gaps in employees that need to be addressed to align with the agencys strategic plan. Creating a platform for agency success through employee development and proper employee utilization. Helping to define and clarify roles. Helping to determine when program and policy changes need to be made. Helping to plan for the future. Encouraging retention through employee development, recognition, and feedback. Increasing employee morale, quality of work, employee relations, and performance.

Performance evaluation benefits the State by: Aligning the work goals/strategies of the employee with the mission and strategic plan of the agency and the State to deliver services to the citizens. Helping to satisfy the increased public demand for government accountability. Providing a standard method of giving employees feedback about their job performance. Getting a greater return on investment of human capital.

1. Small Business > 2. Managing Employees > 3. Employee Training

Employee Discipline & Documentation Practices

by Ruth Mayhew, Demand Media

Related Articles

About Employee Discipline The Best Practices for Manager-Employee Relations The Best Practices for Human Resources Employee Discipline Issues Why to Train Employees on Progressive Discipline Practices Relationship Between Discipline & Morale

Maintaining a company where employees feel appreciated,productive and satisfied with their jobs requires a collaborative effort between departmental managers and the human resources department. There must also be communication among the three groups--workers, human resources and leadership. Importantly, however, is the need for a written employee handbook and new-hire orientation that thoroughly explains the guidelines by which the company operates.
Sponsored Link Dual SIM 3G Smartphone Dual SIM Android Idea 3G Smartfone at INR 5994.Additional 3G Benefits! ideacellular.com/devices

Human Resources Responsibilities The key document for a human resources department is the employee handbook. The type of work environment generally determines what kind of handbook is suitable for your company. An employee handbook can be a set of fluid guidelines in a workplace that encourages a very casual, lenient and congenial approach to work. These are usually very small businesses where a formal set of rules is unnecessary. Another approach is an employee handbook that contains very strict guidelines, and in some cases, standard operating procedures. Purpose of Disciplinary Process Regardless of the type of handbook you believe is suitable for your workplace, you must address the issue of employee discipline. An explanation of the employee disciplinary process is what employees need to ensure their work and behavior is consistent with the employer’s expectations. It is strongly recommended that all employers have a written disciplinary process that is distributed to employees upon their first day of employment. There may be times when disgruntled employees will challenge their employer’s commitment to fair employment practices if the company does not have written disciplinary procedures. Written disciplinary procedures protect the company and the employee. Progressive Disciplinary Process The most common type of disciplinary process is called “progressive discipline.” A progressive disciplinary process usually provides for a warning for the first infraction. The second infraction may require a conference with the supervisor and written disciplinary form with suggestions for improvement. The third infraction may be a serious conversation about continued employment, documentation of the circumstances and the time allotted the employee for improvement. If the employee does not improve after the third infraction, then the company may end the employment relationship. The number of warnings, reasons for disciplinary action and number of written documentation may vary from one employer to another; however, progressive discipline is the type that escalates from warning for a minor mistake to one that may jeopardize the employee’s tenure with the company. There are, however, instances of misconduct that are terminable offenses, meaning the progressive disciplinary progress is not used.

Misconduct such as drug possession and use, weapons, workplace threats and violence are some examples of terminable offenses. Documentation of Disciplinary Action Just as your company should have a written employee handbook, you should also have formal disciplinary forms for each type of infraction or each level of discipline. Every interaction with your employees must be documented, including nondisciplinary actions. Employee discipline can become a serious issue if there exists no documentation to support the employer’s actions, particularly if the employee is eventually terminated for poor performance, absenteeism or any other type of misconduct. The disciplinary form must be signed by the supervisor or manager as well as the employee. Some employees will refuse to sign the disciplinary form believing that if it is not signed, it means they do not agree with the disciplinary action. In cases like this, write “employee refused sign” on the employee’s signature line. Always provide a copy of the disciplinary form to the employee for her files, and maintain a copy of the disciplinary form in the employee’s official file in the human resources department. Texas-Specific Employment Laws Before finalizing your employee handbook and disciplinary policy, be sure that your policies are consistent with state regulations governing employment. Texas is an "at will" state, meaning that the employment relationship can be ended at any time by the employer or the employee, provided the reason is nondiscriminatory. This statement will need to be in your employee handbook, along with other Texas-specific laws that apply to your company and its employees.
Sponsored Links Motivate your employees Build great relationships using NLP Join Now NLP Practitioner Course! www.soexcellence.com/business+nlp Convert Powerpoint in PDF Convert Documents and Files to PDF. With the Free PDF Converter App! www.my-pdf-converter.com

Dual SIM 3G Smartphone Dual SIM Android Idea 3G Smartfone at INR 5994.Additional 3G Benefits! ideacellular.com/devices Employee Evaluations Don't make mistakes get our proven HR documents readyhrdocs.com References

East Tennessee State University: Progressive Disciplinary Procedures Oregon State Bar: Problem Employee Discipline, Documentation & Discharge FindLaw: Documenting Employee Discipline: Developing and Implementing Documentation Procedures To Protect Your Organization National Law Review: Implementing Progressive Discipline Policies Texas Southern University: Discipline And Termination Policy

Resources

Texas State Human Resources Association Society for Human Resource Management State of Texas: Drug Testing In The Workplace Texas C-Bar: Nonprofit Guide To Employment Law Issues In Texas

About the Author

Ruth Mayhew began writing in 1985. Her work appears in "The Multi-Generational Workforce in the Health Care Industry" and "Human Resources Managers Appraisal Schemes." Mayhew earned senior professional human resources certification from the Human Resources Certification Institute and holds a Master of Arts in sociology from the University of Missouri-Kansas City.

Workplace Discipline has so many aspects associated with it and many companies are realizing the effects of this factor on the employee performance as well as retention. It is something thats often taken for granted by employees and needs to be handled with utmost caution at every level. While maintaining the perfect balance by being a strict manager while allowing some leniency sounds difficult, it is very important nevertheless. But then management is all about organizing the right way, isnt it? With this write-up you will come to know how to tread the thin line between maintaining discipline and keeping employees happy. Be Strict But Not Hostile While stating your displeasure for certain unwanted activities and laying out rules, you have to maintain the right balance and not come off as someone who wants to curb the freedom of employees. That way they tend to look for other opportunities even if they are placed at a good position. Frame Guidelines Based On Facts While creating disciplinary policies, research well on acceptable behavior along with considering the factors like

Average age group at the office The workplace environment The scenario at firms that are known for higher retention rates

Set An Example Just like parents have to act the way they want their children to behave, you have to do the same for your subordinates. For e.g. if you want them to avoid making long personal calls, shouting at others or arriving late at work-you need to be a role model and reflect positive actions. While punishment for wrong behavior may a bit harsh at times, you can start by rewarding good behavior. Handle Issues Professionally Back your warnings or disciplinary statements with written proof. That way you can never be accused of saying something unjust and can avoid hearing that the

employee was not aware of a certain detail. You can issue letter of warning and suspension and even termination but in no way can you deny them their basic rights as a punishment. Keep the channels of communication open to avoid frustration from creeping in the office environment. Remember, what may seem like an innocuous act today may be copied by others tomorrow, so dont leave any loophole in your policies. Do not enforce any unjust rule on employees; you need to earn their appreciation as a good leader who wants to protect the organizational environment. This way you can even avoid any kind of untoward legal hassles as well.