Performance Management Systems

A. Overview: Performance Productivity Standards as a matter of

Management System Management Prerogative
 Cannot be impose without limitations.
The right to impose is not absolute, it has
limitations.
Topic Outline:
 Example: Sales quotas
 Labor as a primary economic force  Within six months, you are under
 Productivity Standards as a matter of observation if you're doing the job well.
Management Prerogative But there is a requirement that employers
 Meaning and Importance of Performance who are subjecting his/her employees
Management System into probationary period should inform
 Difference between Performance them about the standards through which
Management System and Performance their performance will be evaluated called
Appraisal performance rubrics. If an employee is
not absorbed at the end of six months and
Labor dismissed, constitutes illegal dismissal.
 It is a primary social economic force,  They will be considered hired/regular
according to the constitution or employee once they succeed in
legislation. probationary period.
 Always in favor of labor or employee. It is  It will be imposed by the employer in
given paramount consideration against consonance with the collective bargaining
the employer who will pay the back agreement (CBA). It is a written legal
wages for a case of illegal dismissal, as for contract between an employer and a
an example. union representing the employees.
 The law will be applied to the prejudice of  Limitations:
the management. They have the right or (1) Management prerogative
prerogative to impose policies as to how should be exercised in good faith.
the business will be run or manage. It is (2) It should be exercise without
called as management prerogative. grave abuse of discretion.
 Performance management tools/system (3) It should abide with equity and
are referred as productivity standard in substantial justice.
some other reference books. It is an
example of one of the management
prerogative imposed by the employers. Performance Management System
Only evident in employer-employee  It is a continuous process that tracks the
relationship. performance of an employees in a manner
 Control test: If the employer can impose that is consistent and measurable
restrictions/guidelines on how a (SMART). Assess, what performance
particular job is perform, then it is an management systems and inform the
employer-employee relationship. employees of what systems/tools that
 Examples of Management Prerogatives: you used for evaluation.
Imposition of bonus.  Crafted by the high level of management.
Performance Management Systems

 It commences from planning, execution,  (2) Centralized companies: Top

evaluation and feedback (continuous management is giving mandate or
process). decisions to their employees.
 Example of a continuous process: sales  A performance management system
quota increases overall workforce productivity,
 It is not only limited to quantitative but it employees are more invested in their
is also qualitative. Cite an example: Ms work and turnover is minimized while
who have a lawyer friend with 3 revenue per employer is maximized.
secretaries and that one of the secretaries  The employees will be more efficient and
have a bad attitude toward the client. An effective leading to the attainment of a
observation is an example of a qualitative company missions, visions and goals.
evaluation technique.
 Evaluation and Development: one of the
goals of performance management Performance Management Cycle
systems.
 Managers function/Four Functions of  It helps achieve goal congruence of an
Management: planning, leading individual employee and employers to
organizing and controlling reach also their goals.
 Your company mission and vision will set  Two primary purpose: PMS is evaluative
forth what you wanted to achieve in the and developmental.
short trend and long run (destination).  Evaluation: It helps evaluate the
Your reason for existence. performance of an employee if they reach
 Goal congruence: The individual interest the quotas.
is in line with the company of what they  Developmental: A close assessment as to
seek to achieve. the performance of an employee. It would
 PMS is a collaborative effort with give a feedback to the employee in what
managers and employees working areas he or she should improve to lead
together to set expectations identify considering other methods on how to
employee goals, define performance improve the performance of an employee.
measure, share employee performance  Advantages: (1) it helps build strong
reviews and appraisal and provide relationship. To see the bigger picture of
feedback. their goals. Being part of the planning
 There are two kinds of companies. (1) process and being constantly given
Decentralized companies where the high feedback improve engagement this can
ranking managers take the views and help build trust and foster stronger
opinions of the line managers and relationship between the employers and
employees in consideration in crafting the the employees.
management policies and procedures.  The imposition of productivity standards
Employees will have a big contribution. will help fix problems faster within the
More collaborative, have a high degree of management. This improves business
cooperation by the employees. performance, generating more income.
Performance Management Systems

Difference between Performance

Management System and Performance
Appraisal
 An example of PMS
 PMS has the bigger scope compare to
performance appraisal.
 As to the Process: The performance
appraisal is a top-down assessment like
the top management will evaluate the
employees while PMS is a joint process
between the managers and the employee
(collaborative effort).
 As to Frequency: PMS is a continuous
process while performance appraisal is
done periodically.
 As to Focus: PA is a quantitative measure
while PMS is measure both quantitative
and qualitative measures.
 As to ownership: PMS is done by the HR
while PA is done by the line managers
having ample knowledge of the operation
of the business.