Performance Management

Essay by PotexUniversity, Bachelor's March 2004

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In today's management, most of the organisation emphasise the importance of performance management (PM). Why is PM so important to them? Is PM an essential practice to these organisations? According to Curtis (1999), PM is an approach to management which individual managers and employees are unified to attain organisation's strategic goals. Strategic goals are defined, and outputs are then identified to attain the goals which were clearly defined. Commitments of managers and employees are gained, to achieve the identified outputs, and outcomes are monitored. In another words, PM is an on-going process that constantly measured, monitored and controlled the overall performance in an organisation (Barlow, 1989), and it is a forward looking and developmental strategic process (Armstrong, 2000).

Armstrong (2000) stressed that PM has become more and more important from the formally widely used performance appraisal scheme to today's an integrated and continues approach. PM in today's human resources (HR) practice is no longer depends on the merit rating form as the only measurement.

However, PM defines strategic goals, and identified outputs to achieve strategic goals. Managers and employees are committed to achieve the identified outputs, and monitor outcomes. Furthermore, (Armstrong and Baron,1998; Schiemann and Lingle,1999) prove that, firms that adopted PM fares better in terms of financial, and non-financial factors than those firms that do not practice PM. Hence, the understanding of PM and its processes for today's firms is essential in determining and assuring its competitive advantage in the ever changing business environment.


Through PM process, employees' talent, strengths, as well as areas which require improvements are clearly identified. (Mwita, 2000)This will ensure that employees are well prepared for career advancement. The process of performance management consist of mainly five major steps as illustrated in the summary of the performance management...