Defining Performance Management Concept

Defining Performance Management Concept

What Is Performance Management?

Explain performance management, its evolution, and the role it plays within an organization.

Performance Management:

Aguinis (2019) defines performance management as “an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization.” When applied in the organizational context, performance management establishes a foundation upon which employee efforts can be aligned with the company’s goals.

Performance Management Evolution:

Performance management can be traced back to the 1960s with the introduction of a performance appraisal system that was used to evaluate employee’s behavior and performance through Annual Confidential Reports (ACR’s) or Employee Service Records (ESR) (Juneja, 2015). The negative comments on employee performance affected the individual’s promotion and career growth. In the early 1970s, performance management improved with negative remarks being communicated to the employees so that they can correct performance deficiencies (Wakeman, 2013). The next phase of performance management evolution involved replacing ACR with performance appraisal, which allowed employees to describe their achievements in the confidential and self-appraisal forms. Also, employees’ performance and productivity could be quantified. There was also the inclusion of training needs in the performance appraisal to help employees to improve their performance. However, the primary goal remained controlling employees rather than developing them. In the late 1970s, performance management becomes more development-oriented, target-based, collaborative, and transparent instead of being a confidential process (Juneja, 2015). The process was also shortened from one year to six months. With the collaborative feature, issues derailing employee performance, employee targets, ratings, and training needs were discussed. The organizations started focusing on the employees’ developmental issues (Cappelli & Tavis, 2016). The current performance management is built on employee development, whereby employee productivity and goals are aligned with the organizational mission and objectives.

Role of Performance Management within an Organization

Performance management aligns employee efforts with the firm’s objectives, goals, and mission (Aguinis, 2019). This helps both the employee and organization to identify the contribution of a particular job to the organization. As such, as per the discussion of Aguinis, Joo, & Gottfredson (2011),  performance management help executives to attain strategic business goals since it provides a system through which individual goals can be linked to organizational goals.

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Describe 2 advantages of implementing a well-designed performance management system.
According to Aguinis, Joo, & Gottfredson (2011), a well-designed performance management system benefits employees, managers, and the organization (p. 505). Among the several benefits discussed, the two that accrue to the organization are:

-Enabling organizations to make appropriate administrative actions.

-Setting a foundation upon which the organization makes goals that are clear to both employees and managers.

Explain at least 3 purposes of a performance management system.

Aguinis, Joo, & Gottfredson (2011) presents three purposes of performance management system within the organization (p. 505):

-The performance management system has a strategic congruent feature that allows individual goals to be aligned with organizational goals. Therefore, one purpose of the performance management system is to align individual goals with organizational goals.

-A performance management system acts as a communication tool that reveals the desired behaviors and results that are valued and rewarded. Therefore, it is a system that presents an organization’s values and culture.

-Performance management system plays a crucial role in improving workforce and succession planning since it provides the key avenue through which appropriate talents can be accumulated.


Aguinis, H. (2019). Performance management (4th ed.). Upper Saddle River, NJ: Prentice-Hall.

Aguinis, H., Joo, H., & Gottfredson, R. K. (2011). Why we hate performance management–—And why we should love it. Human Performance, 54(2011), 503-507. doi:10.1016/j.bushor.2011.06.001

Cappelli, P., & Tavis, A. (2016). The Performance Management Revolution. Harvard Business Review. Retrieved from https://hbr.org/2016/10/the-performance-management-revolution

Juneja, P. (2015). Evolution of Performance Management. Retrieved from MSG: https://www.managementstudyguide.com/performance-management-evolution.htm

Wakeman, C. (2013, April 9). The Evolution of Performance Management. Retrieved from Forbes: https://www.forbes.com/sites/cywakeman/2013/04/09/the-evolution-of-performance-management/#1e9681e410e4

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