Essentials of Performance Management System (PMS)

Effective Performance Management System

We live through activities which we expect to be contributing towards our well-being or wellness, which we may also call by the names of satisfaction, happiness etc. In our ways of living personal (private) and public (in jobs, social works etc.) lives, conduct various activities using the available resources like energy, money, time, materials, intellect, relationship etc. The final aim of these activities is to achieve the goal (or objective) which in other words can be explained as the anticipated outcome. The methodology of achieving the goal through organized activities involve a process called performance management. Performance management leads to effective and efficient use of resources to achieve the goal/ objective. It (performance management) applies to individuals and organizations equally. At the organizations level, business success depends totally on performance management system (PMS) in place, by design or otherwise. In the cases of growing organizations, they have to have well designed PMS without which growth may become unsustainable.

In the PMS of growing organizations, the need for change is often inevitable, be it in the attitude of people, use of technology or organizational structures. Failure of PMS, when it happens starts with the attitudes of people in general and their resistance to change in particular. Some of the excuses people (at all levels of organizations) offer to resist changes are:

  1. Everything is going on fine, – then why try new things?
  2. Who is he/ she (the change agent) to tell me what to do, when I know everything better than him/her?
  3. I have X number of years of experience and my experience tells me that everything here is working fine
  4. These changes are finally going to fail. Nothing new works here.
  5. Who has time and money to try new things when work is going on fine here!
  6. When things improve with these changes, my power/ authority over the people and work around me will reduce and I may become redundant.
  7. These changes need teamwork will reduce mu importance.
  8. Changes involve risk and I do not like to take risks.
  9. We are in Business and what matters the most in business is production/ operation (as the case may be, depending on the industry). Developing organization and organizational systems has hardly any connection with production/operation. If people meet my production/ operation targets, I am fine with it.
  10. Systems will bring in accountability and i am scared if accountability.

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The reasons people quote for avoiding performance management systems (PMS) could be more interesting. Some of the oft quoted ones are:

  1. There is no way one can measure performance.
  2. Performance matters in the case of production / operations/ marketing functions only. Why then a PMS for the entire organization?
  3. If something cannot be measured in number and figures, it is not performance.
  4. The sum total of individual performance in number and figures is equal to the complete performance of the organization and so. Focus only on those whose performance can be measured.
  5. Performance depends on individual capabilities and so there is no point in having a PMS for the entire organization.
  6. I can extract performance from any one with our PMS. I am good at sorting out people and every one performs well if put under pressure, targets and threats.

Times are changing and the need of the hour in organizations is effective performance management systems (PMS) encompassing all the resources including human resource materials, finances, technology, relationships etc. The fundamental to effective PMS is systematization. When it comes to the people who matter, personal fear of losing importance is the single most significant impediment in putting organizational systems in place. If organizations can address such fears right at the individual levels, there is no reason why a well planned PMS has to fail. What stands out while addressing personal fears and related delusions is the roles of organizational behavior (OB) interventions, training and organizational development (OD). These are critical in ensuring sustainable and effective performance management systems (PMS). Many organizations, large and small are using what are known as on-demand performance review systems. These are typically secure internet based systems that allow you to manage all if your performance reviews as well as document performance.