Does Performance Management Work?

A collaboration between Karlien Kruger: HR practitioner and Mpumelelo Mthembu: Research practitioner

The efficacy of performance measurement is often questioned. Organisations often experience major resistance to performance management systems, due to employees and top management harbouring negative sentiments informed by prior experiences.

Performance management efficacy

A once annual assessment of performance used as the basis for remuneration and reward decisions are frequently questioned by managers and employees alike.

Executives, Senior and Middle Management, on the other hand, grapple with whether such performance management systems really help organisations to improve business performance? HR Professional are thus often challenged about the relevancy of performance measurement, given the perceived lack of positive outcomes from such systems to the business.  It is often viewed as a time-consuming activity, preventing managers and employees from focusing on core business activities.

Cause and Effect

Given the observations in the previous two paragraphs it thus stands to reason that it is a question of linkage and of cause and effect. A linkage can be described as

  • a change (or hypothesized change) in the performance of one work unit as the result of a change in the performance of another
  • a change (or hypothesized change) in the performance of a team member on the rest of the team
  • a change (or hypothesized change) in the performance of different hierarchical levels of the organisation

Building an Effective Measurement System

In building an effective and positively received performance measurement system there are various considerations to be made. The first of these is a better understanding of the linkages between individual, team, and organizational performance, as well as performance at different levels of the organisation.

Changing a single aspect of an organization almost never results in a substantial change in organizational performance. Organizations are too complex, their performance too multidetermined, and their inertia is great for a single innovation at the individual level to have a substantial impact on organizational performance. Schneider and Klein, Automation of America’s Offices, 1985

Furthermore, a better understanding of the type of interdependence of units at an organisational level is critical to investigating the impact of the change on performance. Depending on the type of change, interdependencies moderate the extent to which changes have the desired effect on organizational performance and ultimately business performance.

Understanding the linkages among roles, as well as how subtasks within roles are linked, further explains how individual performance is impacted by changes in performance. Further examination of the complexity and the degree of the interdependence of these linkages is needed.

Conclusion

Closer inspection of the linkages and cause and effect of changes in performance may provide a better understanding of the interdependencies and provide for more fair and acceptable performance measurement.

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