Performance management

In a nutshell, performance management can be defined as the continuous communication process whereby managers and employees work hand in hand to ensure that the employee’s performance is in line with the general goals of the company (Cascio & Aguinis, 2005).

Some of the primary reasons why performance management systems always fail are due to the weak structure of the process, lack of communication, and overemphasizing recent performances. Poor structure accentuates failure because performance management is not a one-time process and needs to be addressed regularly. A well-structured performance management system aids employees to understand better the goals of the company, which helps to improve the general performance of the employees (Cascio & Aguinis, 2005). Lack of proper communication between the manager an employee will fail the performance management system because the employees will not be aware of what is expected of them. Due to the various biases such as recency bias, overemphasizing on recent performance will lead to failure of the performance management system.

An excellent example of a performance management system that failed is one that was previously adopted by Adobe. The company removed all its formal performance management activities because it believed that performing annual reviews was labor intensive. The experiment was declared a failure after the company reported that no performance management was not working. The reason why Adobe was forced to change its performance management process was that the previous one lacked strategic focus (Cascio & Aguinis, 2005).

On the other hand, an exemplary example of a performance management system that was successful was one adopted by General Electric. The company chose a once-a-year review ritual which proved invaluable in improving the performance of the company. The success of the performance management system was due to more feedback and putting more emphasis on development.


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