1. Performance management: key points
PM aims: encourage, support, sustain high performance of individual, team and organisation
Is strategic and emphasises vertical and horizontal integration of HRM
Should be flexible and continuous process – not one-off event
AMO theory helpful in explaining how to manage individual performance
Is line manager owned and driven
Unlocking Human Resource Management Chapter 7

2. Performance management: cycle – key points
At operational level performance management can be seen as a continuous process or cycle with sequential activities
These activities typically include:
Induction
Observing and monitoring
Performance appraisal
Identifying training and development needs
Reward and recognition
Counselling and support
Unlocking Human Resource Management Chapter 7

3. Performance management: appraisal – key points
Focuses on reviewing past performance, assessing future objectives and development needs
Most common form: downward appraisal conducted by line manager
Other types: self-appraisal, upward appraisal, peer appraisal, customer appraisal and 360-degree appraisal
Appraisals can be problematic: prone to bias, time consuming, bureaucratic, difficulties in linking with pay
Unlocking Human Resource Management Chapter 7

4. Performance management: measuring – key points
There are two broad approaches to performance measurement: objective-based and competency-based assessment
Measurements should be valid, meaningful and fair. The SMART acronym is often used to describe the key requirements of good target setting
Performance ratings are often used to grade and rank employees’ performance
Unlocking Human Resource Management Chapter 7

5. Performance management: underperformance – key points
Performance management provides the opportunity to identify and address underperformance
Formal action includes training, learning and development, counselling and support, adjusting work duties and redeployment
Disciplinary procedures should only be used when performance has not improved over a period of time
Unlocking Human Resource Management Chapter 7

6. Performance management: key roles – key points
Line managers should own and deliver PM at operational level
Line managers need support to overcome problems of lack of skills and experience, work overload, lack of time, subjectivity
HR managers have role to play in designing policies and supporting line managers
Senior managers also play key role in setting culture and being positive role models
Unlocking Human Resource Management Chapter 7

7. Unlocking Human Resource Management Chapter 7
Learning summary
By the end of this chapter you should know:
Meaning and importance of PM
Role and different types of appraisal
Different methods of measuring
Approaches (formal and informal) to managing underperformers
Potential problems in operationalising PM
Critical role of line managers
Role of HR and senior managers
Unlocking Human Resource Management Chapter 7