TABLE OF CONTENTS When you have studied this chapter, you should be able to:
Understand the critical nature of the performance management process and the role of human resources in influencing the associated systems and operations.
State the meaning of performance appraisal and performance management and to distinguish between the two.
Carefully consider the appropriate measurement methods in given situations and be conscious of their shortcomings.
Put forward reasoned proposals on how to set up and operate a basic performance management system.
To all intents and purposes, an organisation is judged by its performance. In the private sector, performance is measured principally by its profits and the growth in value of its shares; in the public sector, measures are more controversial but sets of various performance indicators in health, education and other public services give a general overall view of how well the organisation is performing in comparison to its peers.
Organisations can perform well or poorly due to external forces, such as the state of competition in the marketplace, long-term weather patterns, legal restrictions or the level of interest rates and taxation. However, the majority of economists and commentators agree that the biggest influence on organisational performance is the quality of the labour force at all levels of the business. Teams of highly skilled, trained and motivated employees will nearly always overcome most of the difficulties created by external forces while a poorly motivated, untrained and unskilled labour force will nearly always fail to take advantage of favourable external opportunities.
