Performance Management System

A performance management system (PMS) is an ongoing process which enables organizations to plan, measure and control their performance, so that decisions, resources and activities can be better aligned with strategies to achieve desired results (Bento and Bento, 2006).

According to Dixon et al. (1990), performance measurement systems (PMS) are designed to provide a set of mutually reinforcing signals that direct managers’ attention to strategically important areas that translate to organization performance outcomes. I see that PMS is very important to guide managers’ behavior toward key organization outcomes.

The main purpose of PMS is to integrate organizational activities across various managerial levels and functions (Sinclair and Zairi, 1995). Besides, I found that PMS also can help the employees in improving work performance to produce desired outcome. PMS is also seen as a recognition and reward for the contributions of employees in achieving organizational goals. By doing so, employees will be motivated to strive for better performance in the future. Additionally, PMS can also increase employee morale resulting from on-time performance appraisals and rewards commensurate with employees’ contributions.

The five major dimensions of PMS are planning, monitoring, developing, evaluating and rewarding. In planning, the performance expectations and goals for employees are set to channel their efforts toward achieving organizational goals. Next, in monitoring, the tasks assigned to the employees are monitored consistently to provide ongoing feedback to their progress. In developing, employees are provided with training to encourage them to perform better, strengthen job-related skills and competencies. Next, evaluating is very helpful for the employees to compare their performance among each other. Lastly, rewards means recognizing employees for their good performance and acknowledging their contributions towards organizational goals.

In conclusion, PMS is very important to improve employee involvement, commitment and motivation (Bevan and Thompson, 1991). It also acts as a communication tool to provide feedback on employees’ contributions to achieving organizational goals (Cheng et al., 2007).

References:

1. Dixon, J., A. Nanni, and T. Vollman, 1990,  The New Performance Challenge: Measuring Operations for World-Class Competition, Homewood, IL: Dow Jones Irwin

2. Sinclair D., Zairi M. (1995), Effective process management through performance measurement Part I, Business Process Reengineering and Management Journal, Vol. No. 1, pp. 75-88

3. Bento, A. and Bento, B. (2006), “Factors affecting the outcomes of performance management systems”, Journal of Information Technology Management, Vol. 17 No. 2, pp. 23-32.

4. Bevan, S. and Thompson, M. (1991), “Performance management at the cross-roads”, Personnel Management, November, pp. 36-40.

5. Cheng, M.I., Dainty, A. and Moore, D. (2007), “Implementing a new performance management system within a project-based organization”, International Journal of Productivity and Performance Management, Vol. 56 No. 1, pp. 60-75.