The characteristics of performance management

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Performance management has been promoted, researched and emphasised upon in small and large enterprises since long. The topic has evolved from much technical performance appraisal system. However, with the passage of time, increased complexity in businesses and emerging concepts of knowledge transfer, innovation, strategic human resources and greater attention on capabilities of human assets have transformed the way performance has been perceived, measured, judged and understood in organizational perspective. Even its application to subsequent HR policies and strategies has also changed drastically with the advent of information systems, international operations and establishing cultural symmetries between multinational offices of firms. In such context, it becomes essential to revisit the definitions of these two areas of HRM, chalk out differences between the two and identify reasons for prevailing confusion. Performance management can be defined as a process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success (Armstrong 2009). Thus, thriving on this basic definition of performance management, it can be deciphered that performance management is concerned with synchronisation of individual and organizational goals, setting up of expectations, duties and responsibilities and providing for the development of employees through a modification in their attitude, work behavior, skills and abilities. The characteristics of performance management can now be charted out. Armstrong (2009) next opines that performance management system is the sum total of five basic elements- agreement, dialogue, measurement, feedback and reinforcement. Agreement takes place between what organizations want to achieve with the help of contribution of its employees and what employees want to achieve with the help of organizational culture, structure and policies. Dialogue is the sharing and dissemination of ideas, data and information to and fro employer and employees. In this respect, not only the managerial heads, but also line managers are responsible for the establishment of a two-way communication channel that exhibits transparency, reliability and truthfulness. Measurement of individual performance is based on continuously evolving standards, indicators and targets. Combination of these three tenets serve as foundation for constructive feedback mechanism through which employees identify their own deficiencies and shortcomings and policy makers also allow and arrange for their development and reinforcement of positive behavioural traits. Secondly, performance management is a flexible, continuous and evolving process which takes note of both past experiences and future requirements to chalk out present policies and strategies. It is not in the nature of authoritative or bureaucratic management where commands and orders follow from the upper echelons of hierarchy. Rather, it is a process done in partnership with employees themselves. As such, continuous changes in role expectations, job requirements, skills and competencies needed and other work aspects keep on surfacing out. Known by various names like merit rating, merit evaluation and others, performance appraisal is a narrower concept with respect to performance management. It is more formally and operationally focused upon evaluating the performance and work behavior of employees through the use of various rating techniques. Grote (1996:3) state that performance appraisals serve to fulfil three major objectives- one organizational and two individual. Organizations use it as a tool to determine the contribution of employees towards the achievement of