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The Impact of Performance Management

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Organizations consider performance management as a critical process in business management because the practice focuses on organizational or departmental performance, procedures involved in the production of goods and other elements of the organization (Daniels, 1999). Performance management also refers to a sequence of steps through which businesses align their employees, resources, and systems with organizational priorities, strategic goals, and objectives. Essentially, performance management is a complex science, which guarantees the management of behaviors and results, which are principal elements of a performance. Organizations initiate performance management through supposed strategic tactics directed at enhancing organizational effectiveness via the enhancement of managers’ and employees’ performances. This is through the enhancement of the capabilities of both teams and individuals. Performance management exposes employees and managers to undue pressure, which ultimately results in poor levels of performance and dwindling organizational successfulness. Traditional points of view consider performance management on account of performance assessment systems having immense, positive effects on business performance. However, there is relatively little evidence to defend this hypothesis. There is a growing appreciation for the adverse consequences of performance management to both organizations and employees (Godener amp. Soderquist, 2004). One of the most prominent negative effects of performance management is the bureaucracy associated with the compilation of reports for regular assessments. The preparation of such reports takes at least two days, which is the normal quantity of time, invested from middle and senior managers for performance management purposes, in a month. The complexity of performance management is also a significant hurdle since it disconnects employees from the entire process of performance management. Measures such as composite measures and performance indexes, which managers use in performance management, may not be universally ideal. The negative impacts of performance management also include decreased departmental and organizational performance. The implementation of performance management has an adverse effect on the organization’s immediate performance, particularly with regard to employees’ performance. This situation emerges as a result of lack of proper training of employees and managers, especially in terms of formal change management. In addition, performance management results in diminished organizational performance when the review process fails to address the changes in the organization’s culture. Performance management demoralizes employees. This is because employees consider performance reviews as management-based tools used to get back at them, thereby, subjecting the employees to extreme levels of subjectivity. Performance management produces particularly adverse effects when the process fails to address employees’ fears and clarify the essence of the process and its benefits to employees. Furthermore, performance management results in low productivity due to inadequate management commitment to the process and a notable lack of consistency regarding performance management in different organizational departments. In addition, performance management, which is a two-way communication process, could degrade the communication.