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Understanding Performance Management, in Context When you hear the term “performance management,” what are a few thoughts that come to your mind? You may first think about the performance of an employee and then the performance appraisal process. If so, you are heading in the right direction. Many managers may be under the assumption that the performance appraisal process is the same as performance management; however, they are misinformed. The performance appraisal process allows a manager to assess an employee’s performance within a specified time frame. The performance appraisal is employee driven, whereas performance management focuses on methods used by an organization to remain competitive and aids the organization in developing strategic business goals. While the performance of an employee is one component of the operation, there are multiple layers required for an organization to reach the desired mission and goals. Sound performance management procedures require the employees, teams, and leaders to take a methodical approach in setting and achieving organizational goals. Within a performance management structure, you will find the following components to help employees attain career and organizational goals:

Employees and managers need to set objectives.

Managers must constantly assess the progress of employees.

Managers should offer constructive feedback and coaching.

Employees should be recognized and rewarded for achieving organizational goals.

When the HR professional implements a well-designed performance management system, it helps put the employees and managers on a positive track. The employees have clearly defined goals to achieve. The managers are able to set benchmarks to assess the results and reward employees according to their achievements. However, a performance system that is poorly designed can be considered unfair by employees, can spur on employee misconduct, and could possibly end in litigation.

The HR professional must ensure that the performance management system aligns with the strategic goals of the organization.

Components of a Well-Designed Performance Management System Performance management system is a tool a manager can use to assist the employees in meeting the organization’s operational and strategic goals. The manager can proactively use the performance reviews to manage employee performance, assess opportunities for areas of growth, and set new employee goals. Ultimately, a well-designed performance management system creates a win-win situation for all.

Review the tabs to know more about the components of a well-designed performance management system.

Oversee the employees’ performance.

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Example: Coaching, mentoring, and providing constructive and positive feedback on an area for improvement.

Constantly set new goals for the employees and assist them in achieving departmental and organizational goals. Example: Using SMART goals.

Ensure employees are knowledgeable of the job requirements by offering constant and continual training. Example: Offering on-the-job training or having the employees attend offsite training.

Reward and recognize employees when they receive exceptional reviews. Example: Giving nonmonetary and monetary rewards.

Evaluate, coach, and implement plans for corrective action and constantly communicate with the employees regarding their performance. Example: Combining the performance appraisal with SMART goals.

Additional Materials

From your course textbook, Performance Management, read the following chapter:

Performance Management and Reward Systems in Context

From the South University Online Library, read the following article:

Reward Management: Linking Employee Motivation and Organizational Performance 

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Understanding the Performance Management Process You are a new HR Manager for a company with 250 employees. During your third week of employment, you have discovered that none of the employees have job descriptions. Some employees have worked for the company over five years. Employees have been classified as exempt when, in fact, they are nonexempt employees according to the Fair Labor Standards Act (FLSA). In addition, the company has never established a performance management process. Employee morale is low, employees are not performing at an optimal level, and employee reviews have not been conducted for two years. What are the necessary steps to take in order to get the organization on track?

First, you must have a clear understanding of the organization’s mission and strategic goals and then create a list of jobs. Without a list of jobs, it will be virtually impossible to begin the process. There are multiple steps in understanding the performance management process:

1. Know the mission and strategic goals of the company.

2. Conduct a job analysis.

3. Write job descriptions.

4. Implement a well-designed performance management process.

5. Determine when performance appraisals will be conducted and how coaching feedback will be given.

6. Define the type of employee behavior required to attain the desired outcome.

7. Establish a set of new goals to attain and set benchmarks.

The scenario suggested above actually happened. After three weeks of employment in her first role as an HR Manager, this manager found the organization to be in total disarray. Prior to her onboarding, an employee had filed a grievance since he was classified as exempt when he was actually a nonexempt employee. Employees were disgruntled because they had not received a raise in over two years. The company did not have a clear idea of the mission or strategic goals. When the performance management process was clearly defined and linked to the strategic goals of the organization, employee morale lifted.

Benefits of the FLSA Employers are required to follow the guidelines established by the FLSA to ensure employees are properly compensated for the work performed.

Review the tabs to study the benefits of the FLSA through the given case studies.

Case Study 1

Case Study 2

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The manager of your fast-food restaurant has advised all employees to clock out after their eight-hour shift; however, the manager insists that the employees cannot leave until the restaurant is cleaned and ready for the morning crew. The manager has been trying to remain within the monthly budget. A disgruntled employee filed a claim since she has not received overtime pay. The franchise is now facing a class action lawsuit.

Locate a court case to understand the repercussions for an employer failing to adhere to the FLSA.

What are some other options the manager could have used to remain within the monthly budget?

What are five critical areas that you have discovered from reading the court case you selected?

How can you apply this knowledge to your current or future organization?

Additional Materials

From your course textbook, Performance Management, read the following chapter:

Performance Management Process

From the South University Online Library, read the following article:

10 Performance Management Process Gaps 

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Organizational Performance and Strategic Planning Consider for a moment that you decide to go skiing. There is signage directing you on the safe slopes and advising you of the slopes that are not safe. Throughout the week, you followed the signs and adhered to the designated path for all skiers. You are now very confident with your ability to ski on the black run. The next day, you seek more of a challenge and take the path that is off-limits. As you are heading back to the lodge, a whiteout occurs. When it clears, you are totally disoriented and cannot find your way back to the lodge.

Lack of strategic planning is like a whiteout and can leave an entire organization disoriented. How can the HR professional prepare the employees, managers, and leaders to understand and utilize performance management and strategic planning on a daily basis? The HR professional must ensure that everyone understands the concept of strategic planning, which is to determine the organization’s future goals, recognize obstacles, develop a plan to ensure the organization has clear visibility to move forward, and maintain competitive advantage. The performance management system must depend on the strategic planning process that has been executed if it is to be of any use to the organization. “The behaviors, results, and developmental plans of all employees must be aligned with the vision, mission, goals, and strategies of the organization and unit” (Aguinis, 2013, p. 81). The HR professional must be sure that each manager and leader realize that a well-designed performance management system is the main component for the successful implementation of an organization’s strategic plan. All employees, managers, and leaders must adhere to the policies that have been established.

Reasons Why Strategic Plans Fail Strategic planning is a process that involves describing the organization’s destination, assessing barriers that stand in the way of that destination, and selecting approaches for moving forward. The main goal of strategic planning is to allocate resources in a way that provides organizations with a competitive advantage. There are several reasons strategic plans fail.

(Aguinis, 2013, p. 60)

Review the tabs to study the reasons behind the fail of strategic plans through examples.

Additional Materials

From your course textbook, Performance Management, read the following chapter:

Performance Management and Strategic Planning

From the South University Online Library, read the following article:

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The Missing Link to Strategic Planning: Meeting Methodology Lines Up Performance Management with Execution 