In Today’s world of doing business, product differentiation or technology has ceased to be the key competitive advantage in many industries thanks to the internet and the enhanced speed of communication. More than ever before, it is now easy to access and copy competitors technology and products. Today, if a particular insurance company or bank launches a new product or service, it will not take competitors long before the same product is offered.
So, in the rapidly changing business operating environment, what makes some business stand out? What can be considered to be today’s competitive advantage? The answer is the organization’s Human Resource. Organizations that have a strong Performance Management System have succeeded in offering excellent customer service and are likely to remain ahead of their competitors. Nowadays, customers want value delivery within the shortest time possible and only people can make this happen. A sustainable competitive advantage can only be produced by people. It is therefore imperative that performance management systems be used to transform employees’ talents and knowledge into a business competitive advantage.
Performance Management is a common terminology in the present day corporate world. It has its origin from private sectors of developed economies and has now found its way into many developing economies. Performance management and measurement can be defined as any systematic and integrated approach to ensuring delivery of strategic objectives of an organization through continuous improvement of performance. Organizational Performance Management differs significantly from individual Performance Management which focuses on the personal performance of the employee. Although the latter plays an integral part in the overall Organization Performance Framework, it must be clearly linked to the strategic objectives of the organization. A strong Performance Management system must ensure that the strategic objectives of an organization are clearly cascaded from the top management to the lowest level in the organization.
Regrettably, many organizations have not succeeded in using Performance Management Systems in productive ways. Performance Management has been, in many instances, denigrated as a “requirement by the HR department”. In many organizations’ Performance Management has ended up being about filling tedious and often useless appraisal forms as a way of complying with the HR department’s requests. Performance appraisals and assessments are just one piece of the talent management puzzle. In order to build an empowered and skilled workforce, companies need to do more than audit employee achievements. An organization should work towards a management cycle where judgment isn’t the sole focus— ongoing support and improvement should be just as important, if not more.
Performance management does not end once a performance appraisal is delivered. Managers should take an integrated approach to employee learning. This means creating development plans that support an employee’s goals, career interests, and potential, as well as the organization’s business and talent needs. Evaluation is only effective when used as a tool for growth and success.
In order to realize the full benefits from Performance Management, organizations must view it as the process of quantifying the efficiency and effectiveness of actions and should be virtually intertwined and integrated with the strategic direction of an organization. Investing in modern performance management processes and technology that supports it can be the competitive edge a company needs. As businesses tackle the intersection of retention, engagement, culture, and learning, modern performance management will just become good management.