Unlocking Human Resource Management Chapter 7

Performance management: key points

• PM aims: encourage, support, sustain high performance of individual, team and organisation

• Is strategic and emphasises vertical and horizontal integration of HRM

• Should be flexible and continuous process – not one-off event

• AMO theory helpful in explaining how to manage individual performance

• Is line manager owned and driven

Unlocking Human Resource Management Chapter 7

Performance management: cycle – key points

• At operational level performance management can be seen as a continuous process or cycle with sequential activities

• These activities typically include:• Induction• Observing and monitoring• Performance appraisal• Identifying training and development needs• Reward and recognition• Counselling and support

Unlocking Human Resource Management Chapter 7

Performance management:appraisal – key points

• Focuses on reviewing past performance, assessing future objectives and development needs

• Most common form: downward appraisal conducted by line manager

• Other types: self-appraisal, upward appraisal, peer appraisal, customer appraisal and 360-degree appraisal

• Appraisals can be problematic: prone to bias, time consuming, bureaucratic, difficulties in linking with pay

Unlocking Human Resource Management Chapter 7

Performance management: measuring – key points

• There are two broad approaches to performance measurement: objective-based and competency-based assessment

• Measurements should be valid, meaningful and fair. The SMART acronym is often used to describe the key requirements of good target setting

• Performance ratings are often used to grade and rank employees’ performance

Unlocking Human Resource Management Chapter 7

Performance management:underperformance – key points

• Performance management provides the opportunity to identify and address underperformance

• Formal action includes training, learning and development, counselling and support, adjusting work duties and redeployment

• Disciplinary procedures should only be used when performance has not improved over a period of time

Unlocking Human Resource Management Chapter 7

Performance management:key roles – key points

• Line managers should own and deliver PM at operational level

• Line managers need support to overcome problems of lack of skills and experience, work overload, lack of time, subjectivity

• HR managers have role to play in designing policies and supporting line managers

• Senior managers also play key role in setting culture and being positive role models

Unlocking Human Resource Management Chapter 7

Learning summary

By the end of this chapter you should know:• Meaning and importance of PM• Role and different types of appraisal • Different methods of measuring• Approaches (formal and informal) to managing

underperformers• Potential problems in operationalising PM• Critical role of line managers • Role of HR and senior managers