For many businesses, the single highest expenditure does not reside on the balance sheet but on the income statement. An organization's success relies on its human capital. The business world of tomorrow will not be the same as it is today. Organizations must look to its human resources to gain the competitive edge. An organization's distinct competitive advantage lies in its people.
Employee satisfaction is critical for organizations that rely on their employees to achieve its goals. Components including performance management, appraisals, workplace turnover, worker safety and health will be addressed in this paper. Future challenges and trends in human resource management will be discussed briefly.
According to management and organization development consultant, Susan Heathfield, "...performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities..." (Heathfield, 2005). Performance management begins when a job is defined and ends when an employee leaves an organization.
Heathfield opines that many writers and consultants are using the term performance management as a substitution for the traditional appraisal system. "The goal of performance is to achieve the company mission and vision. Almost no one performs, for the organization, however, if his or her own mission and vision are not accomplished as well" (Heathfield, 2005). By harmonizing employees' personal objectives with those of the organization, a win-win situation is created.
An effective performance management system is the process through which managers ensure employees' activities and outputs contribute to the organization's goals. (Noe, Hollenbeck, Gerhart, & Wright, 2004). A performance management system sets new employees up to succeed and helps the organization achieve its goals. Performance management provides enough guidance so employees understand clearly what is expected of them, but provides enough flexibility so that individual creative talent and strengths...