4: Performance Management

Decisions relating to employee performance are a very crucial aspect of managerial work as they can have implications for employee motivation and loyalty. In recent times, employee performance (or productivity) has come under focus in the HR literature as a number of global events, and surge in AI and ML have continued to redefine the prescriptive nature of performance management.

Performance management is a process in which individuals, teams and departments within an organisation are constantly evaluated in order to enhance their performance. The CIPD describes performance management as ‘an attempt to maximize the value that employees create’. This definition views the process of performance management from an economistic perspective, something that is seemingly favoured by profit-driven organisations; yet, sometimes, profit may not be the ultimate agenda for some organisations. For example, public healthcare agencies, government schools in England and largely, most government agencies do not seek to maximise profit, yet they equally want their employees to perform effectively. As different organisations seek different performance outcomes, the definition of performance and its measurement can be a challenging task, particularly when managers attempt to identify gaps in skills. In addition to identifying gaps in skills and expertise at different levels of organisations, performance management tends to be concerned with employees' behaviours, attitudes, expectations and relationships since these factors must be satisfactory for the organisation to function.