Performance Management and HR Budgeting for H2O Essay

Performance Management and HR Budgeting for H2O - Essay Example The purpose of performance management is to create significant performance indicators, so that employees can follow their own performance levels. This method can help them manage their activities, correct their weaknesses and provide a plan for the right processes to maximize their performance. Performance management measurement is about accountability – to the organization and then to one’s self. We can tell that the organization’s performance management system is working well if we notice the following signs: high morale for the members of the team; effective teamwork even across different departments; promotion decisions are well formulated; goals are achieved; people are motivated; appraisals executed effectively; and terminated employees are well informed of their performance. (Horwitz, 2005, p. 5) Performance management philosophies Performance management systems developed by organisations are based on the philosophy which emphasizes employee performance. T his system motivates employees to perform well and work for organizational objectives. Performance management philosophy refers to developing an organized method of evaluation that requires performance expectations, monitors the job of the employees, evaluates their performance, and uses the information from this evaluation for management decisions and also for providing resources. (Bhattacharyya, 2011, p. 11) A management philosophy may start with the hiring process. The initial step is to focus on an applicant’s goals, capabilities, career focus, and so on. As soon as the applicant passes the tests, he/she becomes a member of a high-performing team. The developed performance management system allows the employees to know the company’s performance requirements and incentives, based on job results, and also to acquire new ways how to effectively perform up to the next performance cycle. According to Kandula (2006, p. 11), performance management is the result of utilita rian instrumentalism, which means it encourages hiring human resource at the lowest cost, retaining employees as long as they are useful, and termination of the contract if it is not anymore effective. Organizational culture plays a critical role in the development of performance management in an organization. Organizations with a supportive or collaborative culture have the chance of developing performance management processes that share information about improving employee performance. A reward system may create a desired performance rather than a punitive system which may result in unsatisfactory performance. (Micklitsch & Ryan-Mitlyng, 1996, p. 18) Performance management includes all possible initiatives managers undertake to have high performance among employees. These initiatives focus on giving performance appraisal, rewards and recognition to motivate high performance (Heslin, Carson, & VandeWalle, p. 89). Performance appraisal is almost similar to the principle of performan ce management. Many organizations of today are still applying the traditional method of performance management, i.e. ‘the maintenance-oriented, regulatory and administrative human resource management’ (Kandula, 2006, p. 11). This is a barrier to the application of performance management practices. There is a resistance on the part of the employees, and it can slow down the