The purpose of this paper is to discuss and critically evaluate the Performance Management model by Michael Armstrong and People Performance model by John Purcell. The paper starts with an ample introduction and significance of the employee performance management practices and proceeds by discussing the various concepts and strategies which are incorporated by business organizations all over the world. The major focus of the paper is to discuss the implications of these models for the success and prosperity of an organization. The main body of the paper discusses these models from a critical perspective and explains their major components in detail.
The most important strategies which are recommended by Performance Management model include performance appraisal and reviews, training and skills development, Management by Objectives (MBO), the techniques to manage the low performers, goal setting, feedback from employees, the role of line managers, managing organizational behavior, and minimizing the employee turnover (Armstrong 2012). The People Performance model by John Purcell recommends the management of employees' performance in four different stages or pillars. These pillars focus on improving the organizational productivity through effective management of employees' performance (Purcell 2007). Purcell suggests that managers need to focus on all types of employee benefits and working environment in order to get the work done through them in the most effective and efficient fashion (Hutchinson & Purcell 2003). The final section of the paper gives a set of recommendations to the managers which they can follow to manage their employees' performance and ensure their organization's success. The whole discussion is made in the light of the most relevant literature including books and pearly-reviewed journal articles. The paper concludes by discussing the key findings from the discussion.
Employees are considered as the most precious asset for an organization. The success, competitiveness, financial performance, and sustainability of the organizations largely depend upon the performance of their employees. Keeping in view the importance of this precious resource for their success and prosperity; organizations give strong focus on their human resource management policies and practices. They incorporate different strategies and practices to manage their human resources in an effective, efficient, and well-organized fashion (Hutchinson & Purcell 2003). These strategies and practices include effective recruitment and selection, training and skills development, cultural diversity management, leadership and motivation, performance appraisals, job rotation, enlargement, and enrichment, brainstorming, and others. The practices which are directly focused on managing the employees' behavior, attitude, and working patterns are called people management practices whereas those which deal with the management of their performance at the workplace are called people performance or performance management practices.
Every employee is expected to contribute his best part towards the achievement of organizational objectives. The Board of Directors and the Top Management sets policies and procedures for the employees on how they can achieve those targets in an effective and efficient manner. But when the Management feels that its employees are not meeting the performance criteria, it has to rethink its performance appraisal techniques as well as look at the performance of each individual employee. It enables them to know the ways in which they can improve their performance and ensure an increased organizational productivity (Becker & Gerhart 1996).
Michael Armstrong presented various strategies in his Performance Management model which can be incorporated by organizations to manage the performance of their employees. His research contributions are mainly focused on improving the employees' productivity through performance appraisal, leadership, motivation, and training or skills development practices. The following section presents a comprehensive discussion on Michael Armstrong's Performance Management model from a critical perspective.
Employee Performance Appraisal and Reviews:
Performance appraisal is one of the most commonly practiced human resource management strategies in the world. It refers to the continuous monitoring of the employees' performance by their managers or leaders. In his performance management model, Michael Armstrong has given strong emphasis on the significance of performance appraisal and review for an organization's success. He believes that organizations' productivity can be increased if their managers keep an eye on the performance of their employees. Performance appraisal and review is the best management technique to monitor the performance of employees. Managers can use this technique in multiple ways depending upon the situation or each employee's individual working patterns. For example, a manager can review the performance and learning of his employees through periodical performance monitoring. This monitoring can either be done on timely basis or upon the completion of certain short-term project or target (Armstrong 2012).
The biggest benefit of performance appraisal and review is that it enables the managers to find inefficiencies in the working patterns and job performance of their employees. The performance review process starts with the assessment of individual performance of all the organizational members. At this stage, the manager categorizes his employees or subordinates in two groups: high performers and low performers. After the performance appraisal process, the high performing employees are appraised and rewarded through different financial and non-financial benefits. For example, they are given job promotions, bonuses, awards, and various other appraisals (Armstrong 2012).
In addition to performance appraisal and review by the supervisors, the managers may also require all the organizational members to do their self-assessment. To perform this activity, the organizational members may be provided with a standard format or questionnaire to fill for them. This activity also enables the managers to judge the employees' attitude towards the organization; their strengths and weaknesses, individual goals, future plans, expectation from the Management, recommendation for improving the working environment etc. (Becker & Huselid 2006).
Management by Objectives (MBO):
Management by Objective (MBO) is another widely used management technique used to assess and appraise the performance of employees. In this technique, managers try to involve their lower to middle level employees in the decision making process for the short-term endeavors and targets of their organization. They ask these employees to think beyond their current job responsibilities and give feedback on how the organization can improve its performance (Gerhart 2005). In his Performance Management model, Michael Armstrong has rated Management by Objective as one of the most effective techniques of human resource management. He believes that Management by Objective brings innovation and improvement in the company's existing process and procedures through feedback given by lower level employees (Gardner, Moynihan, Park, & Wright 2001).
Michael Armstrong argues that lower level employees can give better recommendation on how the organization can remove the issues and inefficiencies in its business operations. Reason being, they are more familiar with the day-to-day operational activities like production, sales and marketing, supply chain network, research and development, distribution, customer services, etc. Management by Objective (MBO) is also considered as a strong tool for increasing the morale of employees. Managers can use this technique to motivate those employees who feel few or no growth opportunities in the organization. With the help MBO technique, managers can ensure full participation and contribution of their lower to middle level employee in the process of organizational improvement (Armstrong 2012).
For high performing employees, managers allocate cash incentives and non-monetary benefits so that they remain satisfied with their job and committed towards their organizational goals. Converse to the high performers, there are employees who could not perform better due to various personal and professional reasons. In order to encounter these reasons and make these low performers to perform well, managers use different motivational techniques (Hutchinson & Purcell 2003). These motivational techniques may include financial benefits or customized training solutions depending upon on the reason for low performance. Once the manager assesses the true reason for this performance, he chooses the right method of employee motivation or training (Boxall & Purcell 2003). For example, if an employee could not perform well due to lack of required skills, knowledge, or competencies, the manager arranges special training and skills development sessions in order to make him equipped with the latest knowledge about his job responsibilities. Similarly, if the employee does not perform due to lack of motivation, the manager makes efforts to increase his compensation package and give him competitive salary. These efforts enhance the morale and motivation of the low performing employees which is essential for the better performance and productivity of the organization (Armstrong 2012).
Lack of training and skills development practices can cause various problems for an organization. Training is essential for every old and newly joined employee. It not only grooms them for their better performance at the workplace, but also makes them equipped with the most advanced knowledge and skills in their area of job responsibilities. Lack of training and development affects the entire organizational setup. For example, when an employee is not fully trained to perform his duties in a particular job assignment, he will cause an inefficient use of organizational resources and may put the company in serious financial difficulties (Chen & Farh 2002). Moreover, some employees need training in multiple areas of job responsibilities. It enhances…