The various challenges faced by performance management are stated below:
1) Rationalistic Approach: For implementing various human resource practices and processes, a complete objective and rational approach need to be implemented in performance management.
A super-ordinate objective is required, which must govern all the performance management activities. With well-defined results at each stage, a logical framework must be implemented in each and every human resource practice.
Sometimes, an organization-wide revolution and process re-engineering become mandatory for such rationalistic management.
2) Engineering Orientation: When the business strategy of an organization is closely connected to various interventions, strategies, and drivers of performance management, then only these practices will have a clear direction, objective, and a stable foundation.
Thus, in the accomplishment of the short, medium, and long-run organizational objectives, the role of a catalyst must be performed by performance management.
3) Melding Culture: The ability to align various practices with the organizational culture will determine the success of any performance management.
Every organization has a certain work culture that is developed systematically or randomly, which can be characterized as historical, identifiable, and promoted for a long time.
There must be compatibility between the work culture of an organization and the type of performance management which is planned to be implemented or is already in existence.
This is required as a change in system, procedures, and policies will be initiated by the implementation of performance management.
4) Persistence: Long-lasting efforts and years of hard work will be required in the planning and implementation of performance management in comparison to other management systems.
There must be complete involvement of each and every employee. As most of organizations expect overnight results, their efforts and dedication tend to become useless with time.
Success in performance management can only be accomplished through hard work and perseverance.
5) HR Leadership: In the implementation of performance management practices, the existence of human resource leadership is quite vital. The business skills of human resource managers must be improved upon as their soft human skills.
Both qualitative and quantitative methods must be implemented by them, and they should be quite efficient in updating themselves with the evolving technology.
6) Utilitarian Instrumentalism: Sometimes, performance management is considered as an outcome of utilitarian instrumentalism. Thus, it is assumed that performance management promotes:
- Sourcing human resource at minimum cost,
- Retaining them till they are useful, and
- Revoking the employment contract as and when there is no usefulness.
The foundation of art and science of performance management is paved by the human resource in the form of a natural resource with huge capabilities. Different performance management practices are cultivated by humanitarian perspectives. Thus, avoiding the wrong belief of performance management should be the focus of the performance managers, and attempts should be made to spread the philosophy of performance management clearly and at a large level.
7) Accountability: Developing various significant performance indicators, depending upon which the performance levels of different employees can be reviewed, is the main objective of performance management.
This will facilitate the employees to work on corrective measures, plan their activities, and to look for correct methods by which the performances can be enhanced.
Eventually, the area of accountability can be defined by it in terms of value addition or business advantages. Thus, by implementing the perfect system of accountability, performance management can play an ideal role.
8) Engineering Unlearning Process: In most cases, conventional organizations implement maintenance-oriented, administrative, and regulatory human resource management practices.
In the process of implementing performance management in the organization, this can prove to be a big hurdle. Thus, a lot of resistance can be expected. The progress of the implementation of performance management can be greatly affected by these resistances.
9) Maintaining Internal Consistency: Having greater integration in all the intervention drivers and strategies can be seen as the biggest challenge in the way of performance management.
The greater impact of performance management activities can be accomplished by having greater consistency among various performance management strategies and interventions.
In a standalone set-up, most of the organizations traditionally implement fragmented human resource practices. The absence of comprehensive focus and supreme goals for the human resource functions can be seen as the main reasons for this.
10) Promoting Employees Participation: The active participation of all the employees and line managers is quite important for the effectiveness of performance management.
The employees are not only the target and the receivers of various benefits, but they also have the responsibility of executioners and owners of various activities of performance management, which is not the case in some human resources activities.
Thus, performance managers have to face the challenge of motivating all the employees in order to promote the performance management system in the organization.
11) Complexity: The development and implementation of performance management strategies and interventions drives can be seen as a trivial process.
This is due to the fact that both soft and hard elements of human resource managers are included in it, i.e., development of aptitude and attitude of human resources is done, and then these are converted into tangible performances to accomplish the business superiority.
Role of Appraisals in Performance Management
Performance management is a continuous process, although its appraisals are periodic activities. Thus, as a process, performance management is a dynamic process, although its evaluation or appraisals are static.
Performance appraisals are understood as subsets of performance management. On the other hand, performance management is not possible without performance appraisal.
It helps organizations assess where they stand vis a vis their competitors in terms of effectiveness in performance.
Appraisals do not just reduce the individual performances into some quantitative data, they measure and rate the individual performances with one another, and in the process facilitate in taking performance-related decisions, such as employee development, promotion, transfer, compensation design, etc., more objectively.
Using a well-calibrated measurement scale, such comparisons can also be made across the functions and hierarchical levels. In this backdrop, the role of performance appraisals in performance management can be summarised as under.
Performance appraisal leads to increased performances at the individual I and organizational level. When the performance appraisal system in any organization fails to meet this objective, one needs to re-look into performance appraisal systems.
A decreased level of performance can be attributed to defective performance appraisal systems. This occurs when appraisals are linked to rewards and a smaller number of employees get the reward.
Those who do not get rewarded feel demotivated. This occurs primarily for expectations’ mismatch. It is for this reason that performance appraisal systems need to be properly integrated with more than one objective such as the positive approach to employee development, mentoring and counseling, rewards, promotion, etc.
Psychologically, people nurture a negative attitude to performance appraisals when they are rated poor. The primary role of performance appraisal systems, therefore, is to focus on positive developmental aspects of the people and the organization as a whole.
Similarly, the role of performance appraisal systems should be to make the performance management process more effective and productive. The appraisal systems must help managers to manage their performance.
Line managers must see it as a tool to improve employee performance. They must not feel overwhelmed when it helps only in tracking the poor performer and taking actions against them.
Rather, they must consider its developmental aspects – future performance improvement through training and competency building.
The next important role of performance appraisal systems, therefore, is to focus on developing a positive understanding of managers and to make them nurture that attitude which culminates in building the confidence in employees to embrace it as a tool for their improvement.