INTRODUCTION to PERFORMANCE MANAGEMENT
Performance management is a step wise approach which should be followed in a systematic way. It is a process through which performance of employees mare measured and they must be satisfied with the system and should also feel that it adds some value to their day to day activities (Baron and Armstrong, 2007). Performance management is a holistic approach which brings together different elements and makes successful practice of people management including learning and development. The report undertakes Hilton group of hotels as an example in order to understand the importance of performance management and the reasons behind that it becomes complex and could be misunderstood.
It analyzes that performance management is just not related with analyzing the performance of employees but also needs to manage it and identify certain factors that hinder efficiency of employee’s performance. Furthermore, the study also focuses upon the different elements of people management practice such as motivation, training and development and performance appraisals and also other aspects to deal with different situations at Hilton (Beardwell and Claydon, 2010). Moreover, the report also discusses the detailed understanding about each of the element and describes their roles in managing performance. At the end, the report provides recommendations based on implementation of different elements and the ways through which it helps in developing the performance of employees.
TASK 1 PERFORMANCE MANAGEMENT
Understanding performance management
Performance management is a approach which is adopted by every organization in order to monitor and review the performance of their employees and understand the level that needs to be achieved (Marchington and Wilkinson, 2005). The focus of an effective performance management is in the improvement of quality leading, managing and learning different practices in business. In today’s competitive era, performance management system plays a significant role in managing human resources that assists in achieving the set targets of hotel. Under this approach, both managers and subordinates work together to support and plan the targets and goals to achieve aims and objectives. The key focus of management is on the performance of individual’s performance that is continuously reviewed through appraisal methods and their efficiency is measured by analyzing the availability of resources and their ability to accomplish the tasks.
Performance management also plays a significant role in understanding the need of training and development for employees and also acquires the necessary skills and competencies for the job (Lasserre, 2012). Through measuring the performance it benefits the business in terms of gaining better revenues through reducing cost, increasing sales and motivated workforce to work with more efficiency.
Performance management is complex and capable of being misunderstood
Performance management can be defined as the process that involves collecting and receiving information that linked with performance of staff members in order to improve the efficiency of people and achieve the set targets (Pettinger, 2010). Sometimes, it is complex to understand the performance management and also it is misunderstood by different individuals. There are three critical components of performance management that are planning, measurement and management. Performance management is complex as there are no fix criteria available to measure the performance or work done by individuals in business. On the other hand, perception of every individual and business is different so that it affects to understand the performance management. The perception of every individual is different in organization and it leads to misunderstand the meaning of performance management.
In Hilton entire organization is facing the problem of understanding the performance management due to different definitions and theories given by various authors. There is no direct meaning available therefore every employee working in organization perceives a different meaning of performance management and hence, it acts as a hurdle for the whole business. Due to the lack of knowledge and misunderstanding among the employees it hinders the performance and productivity of employees in the enterprise (Scullion and Collings, 2011). While, it is the duty of management to clear the concept of performance management so that workers can effectively utilize the resources and attain goals. However, performance management is beneficial for business as it is considered one of the best approach through which performance of employees can be improved and monitored effectively. Hence, it directly benefits the organization and in turn increases the profitability. There are four main stakeholders in business and their perception towards performance management is enumerated below-
HR manager- According to the view of HR manager of hotel, performance management is the process through which manager and subordinates work together to attain desired goals (Guest, 2011). It directly control and monitor the work done by employees in the organization and thus its helps business to achieve the desired goals. The performance management process involves setting objectives and providing feedback to employees so that improvement can be done on continuous basis. It is the role of HR manager to directly focus on improving the performance of workers through employing different methods and attain goals.
Organization- Under this, performance management can be managed effectively through achieving the goals and objectives and increasing the market share and profitability of business. Therefore, management of hotel should follow performance management for its employees and attain desired goals (Yang, Hong and Modi, 2011). Thus, it will directly improve the financial performance of company and helps employees to focus on achieving the mission and vision of business.
Line managers- As per the view of line mangers of Hilton, performance management is very essential because it directly helps workers in increasing productivity and achieving desired targets (Strandberg, 2009). Also, it is the responsibility of line managers to manage different employees and motivate them to attain goals. Line managers of every department are in direct contact with every employee so that they can motivate them to achieve tasks as assigned on monthly or daily basis.
Employees- They are the main integral part of organization and as per their view, performance management is the way to develop their professionalism. Through employing different performance management techniques and reviewing them on timely basis it helps employees to develop their skills and knowledge and attain goals (Baron and Armstrong, 2007). Hence, this does not develop complexity in business.
Performance management theories
Performance management is the concept in human resource management and it is a continuous process of identifying, developing and measuring the performance of employees and also aligning the performance with the strategic goals and objectives. Sometimes, performance management is mistaken and considered as performance appraisal but the later is just a part of the former (Lasserre, 2012). There are various experts who explained that there is no single universally accepted model of theory of performance management. The performance management cycle has five elements which are as follows-
- Objectives setting
- Measuring performance
- Feedback of results
- Rewards based on outcomes
- Amendments to objectives and activities
The above mentioned elements are described as one of the theories of performance management cycle. The cycle starts from setting the objectives as performance standards which are successfully met when the last step in the cycle is achieved as amendments to set objectives and activities (Guest, 2011). In regard to this, after setting the objectives, performance has to be measured effectively with an aim to set objectives for taking appropriate action according to which workers effectively achieve organizational goals and objectives. Employees also try to achieve individual goals in terms of gaining rewards and incentives so that the performance management cycle can carry on. Also, feedback is the stage and it is given when all the activities of employees are assessed and evaluated. At the end, it sets the basis for which amendments in activities and objectives are easily met by top level authorities so that organizational objectives can be achieved.
Thus, according to the above approach these five steps in performance management cycle are the basis of improving the staff performance and achieving goals. There are two basic theories which are explained as under-
Goal setting theory- The theory states that individual goals and objectives are established in a manner that it helps in motivating staff to achieve the superiors performance. It is because employees keep on following their goals and in case if the goals are not achieved for some or other reasons, performance is improved through training or goals are modified and become more realistic (Pettinger, 2010). There are different elements such as measurement, rewards, feedback and amendments but theory helps in improving the performance of employees. As, when it is said that goals are modified or it means that it is not achieved. Furthermore, it states that in case if the performance is improved then it results in attaining major goals and objectives of performance management. Leaders of business often try to improve the performance of their employees in order to achieve the set objectives and implement that in business. Also, there are possibilities that several goals are complex and cannot be altered because of their inflexible nature. Thus, the objectives of performance management can be achieved through improvement in performance and attaining desired goals (Beardwell and Claydon, 2010).
Expectancy theory- This theory is based on the hypothesis that employees adjust their nature in the organization on the basis of anticipated satisfaction of valued goals that has been set by them. Moreover, employees modify their behaviour is such way which is most likely to lead them and attain goals. Thus, it can be said that this theory is based on the fact that individuals often mould their behaviour as per the set standards and attain goals (Scullion and Collings, 2011). Further, it helps the individual to gain the set objectives and attain profits in effective way. Also, this theory is related to performance management as it is believed that performance is always influenced by the expectations of individuals concerning in future events.
- Baron, A. and Armstrong, M., 2007. Human Capital Management. Kogan Page.
- Beardwell, I. and Claydon, C., 2010. Human Resource Management: A Contemporary Approach. Harlow: FT Prentice Hall.
- Lasserre, P., 2012. Global Strategic Management. Palgrave.
- Marchington, M. and Wilkinson, A., 2005. Human Resource Management at Work. CIPD.
- Pettinger, R., 2010. Organisational Behaviour – Performance Management in Practice. Routledge.
- Scullion, H. and Collings, D. G., 2011. Global Talent Management. Routledge.