Human Resource Managemnt
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Introduction
Performance management is a process which is designed to improve organisational, team and individual performance and which is owned and driven by line managers – Michael Armstrong (Dransfield R, 2000: 69)
In recent years, challenging economic conditions have stressed organizations, some to the breaking point. Rather than waiting for external improvements, such as market growth or technological advances, many organizations are looking internally for performance and productivity gains (Buchner, Thomas W, 2007: 59).
Performance appraisals are an important factor in performance management. In Australia performance appraisals are widely being used to evaluate the performance of the professionals, managers and technical employees (Kramar R et al. 2014, p322)
Human Resources Management has two aspects. Firstly it consists in motivating people to work, valuing and allowing them to open up. Secondly it consists in achieving organizational objectives including the value creation and the obtaining of a sustainable competitive advantage (Hamid J, 2013, Vol.5, Issue 2, p184-201). With the implementation of the second purpose the organisations has the advantage to differentiate themselves from their competitors. In order to do so the organizations have to look in to the strategic dimension and in elaborate on this we will look in to the strategic human resource management (SHRM) when linking the HRM with the strategic business objectives (Hamid J, 2013, Vol.5, Issue 2, p184-201).
A performance management system can have three purposes: (1) Strategic, which links employee activities with the organization goals, (2) Developmental, develop employees who are effective at their jobs, (3) Administrative, Performance management information (performance appraisals, in particular) is used to make many administrative decisions: salary administration, promotion, retention and termination ((Kramar R et al. 2014, p328-330)
Relevant literature review
There aren’t any HRM best practices that could be considered as strategic in an organization. However, there is a direct relationship between HRM practices and firm’s performances. Huselid’s (1995) ground breaking study established that a set of human resource practices, also known as high performance work systems (HPWS) were strongly related to turnover, accounting profits and firm market value (Loo-See Beha, 2013, Vol. 8 Issue 2, p156).
There could be several theories as to how performance management appeared. Morgan
(2004) believes that modern performance measurement appeared in Venice in the fifteenth century, with the appearance of the double entry accounting whereas Johnson and Kaplan
(1987) believe that the performance measurement appeared during the industrial revolution (Pintea, Mirela-Oana, 2012, Vol. 21 Issue 1, pp753-758).
Either way we could reasonably conclude that performance measurement was dominant from the early 50’s, when the academics were interested measuring performance and measurement consequences.
The paradox of theory and practice in performance management is multi-causal, and in many ways reflects the inherent contradictions in strategic human resource management theory and practice as a whole. Conceptually, there is a natural desire and logic to suggest that SHRM generally, and performance management specifically, should be aligned with organizational objectives and outcomes, whether formally in large companies or informally in small ones (Pauline Stantona and Alan Nankervis, Vol. 17, No. 1, January 2011, 69).
It is also noted that Information Technology (IT) or otherwise known as information management is also linked to the performance management system of the organization. Having an advanced information management system (IMS) would provide data and information to users with the appropriate levels of accuracy, timeliness, ability to develop appropriate monitoring, evaluation, and control systems, customer management capability and guiding manufacturing, supply chain, software development, financial, and other important activities (Mithas, Sunil, Ramasubbu, Narayan, Sambamurthy, V. 2011, Vol. 35 Issue 1, p238)
It is also an acknowledged fact that human resources management is seen as the most important wealth in any organisation. This is important when the organisation has to create a successful and a knowledge management environment so that it could develop it resources timely and efficiently so that it would assist the knowledge professional who are characterized by their multiple cultures and multi nationalities, attitudes and opinions. Knowledge management is an important aspect to the organization since it successfully acquires the knowledge in the operations management and uses it to impact the organization innovation.
The most effective path of the knowledge management is the organisation culture because it determines the values and beliefs and works systems that could either encourage or hinder the knowledge creation and knowledge sharing.
Thus exploring the effect of HR practices on the organisational performance, and investigating the role of intermediate variables among them, and also analysing the relationships among these mediator variables are significant issue.
With the development of information and communication systems the organisations are forced to develop new tools and strategies to measure and understand the performances in their organizations. Effective measurement, however, must be an integrated part of the management process. The balanced scorecard provides executives with a comprehensive framework that translates a company’s strategic objectives into a coherent set of performance measures. The balance score card is much more than a measurement exercise, it is a management system that can motivate breakthrough improvements in such critical areas as product, process, customer, and market development (Dumitrescu, L & Fuciu, M, 2009, Vol. 14 Issue 2, pp37-38).
Identifying best practices or issues and problems
Paladino, B, (2013, pp16-22) describes five key principles of corporate performance management (CPM) and core best practices model. He believes that an organization should: (1) Establish and Deploy a CPM office and an officer; this would be the centre of the five CPM principles and facilitate and develop the rest of the four principles. (2) Refresh and communicate strategy; the organization should have the capacity to effectively communicate its strategies to its employees. (3) Cascade