FACTORS AFFECTING PERFORMANCE MANAGEMENT SYSTEM OUTCOMES
Journal of Information Technology Management
ISSN #1042-1319 A Publication of the Association of Management
FACTORS AFFECTING THE OUTCOMES OF PERFORMANCE MANAGEMENT SYSTEMS
AL BENTO UNIVERSITY OF BALTIMORE abento@ubalt.edu REGINA BENTO UNIVERSITY OF BALTIMORE rbento@ubalt.edu
ABSTRACT
This paper proposes and tests a model to explain three critical outcomes of Performance Management Systems: information quality, effectiveness, and usefulness of the PMS to managerial decision-making. Drawing from Organizational Information Processing Theory (OIPT), we examined how those three outcomes may be influenced by factors that affect OIP requirements (industry, size, and geographic
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RESEARCH QUESTION, MODEL AND HYPOTHESES
Performance Measurement Systems (PMS) enable organizations to plan, measure and control their performance, so that decisions, resources and activities can be better aligned with business strategies to achieve desired results and create shareholder value. This study addresses the following research question: "What factors, internal or external to the organization, explain the outcomes of Performance Management Systems?" In order to answer this question, we used the model shown in Figure 1 to examine the factors contributing to three types of PMS outcomes: usefulness, effectiveness and quality of information.
Figure 1. Factors contributing to PMS outcomes
Usefulness is defined in the literature as the degree to which a person believes that using a particular system would enhance performance [11]. Usefulness is related to the concept of voluntary IS "use" [2,3]. The actual usage of information systems is widely considered an important measure of IT success in organizations, and has been found to have a strong correlation with the perceived usefulness of a system by the user [8].
Effectiveness of a PMS is the degree to which the system delivers its intended results [9], i.e, helping organizations to plan, measure and control their performance, as described above. Information Quality
Performance management systems benefit stakeholders at every level if they are implemented successfully. Performance management systems align employee performance with the strategic direction set by the organization. St. Jessica’s Urban Medical Center’s leadership must perform specific actions, prior to implementing the new performance management system, to ensure it is a success. The organization's leadership must disseminate the information throughout the company, create a process that ensures employees can dispute ratings, train raters to evaluate employees and gain buy-in from early adopters (Aguinis, 2013). A newly implemented performance management system will fail if the proper steps are not taken in the beginning.
In order for an organization to achieve long term success, it must consistently evaluate those plans and consider all of the organization’s entities and how they link together. By appraising the existing performance management process, it forces deeper analysis of the process, as well as its intended and unintended influences towards employees and the organization.
Measuring performance means when a business will measure the quality of the activities that are passing and the quality of the services provided to the customers by employees. It involves creating a simple, but effective, system for determining whether organizations meet objectives. It’s also a process of collecting and reporting information regarding the performance of an individual, group or organizations. It can
Performance management relates to an organization’s ability to implement a system to evaluate and advance employee performance. Achieving peak performance requires consistency, clear objectives, and constructive employee evaluation. According to Mithas, Ramasubbu, & Sambamurthy (2011), an organization must design the performance management system based on extensive research about the organization’s mission, and then properly communicate the purpose of the system to employees, stakeholders, and decision makers. After the performing the research, the information should be used to establish the appropriate performance management specialized for the organization. In addition, an effective performance management system should align
To determine the effectiveness of the chosen information system, SUC will use the collective information gathered by people, procedures, databases, and devices within the organization, which is known as using the Management Information System (MIS). This process begins with decision making. There are three stages in decision making: intelligence, design, and choice. Problems are discovered and information of what has caused the problem or what is needed
Henri (2010) identified there was a lack of information present in management accounting literature related to how change in an organization drive change in performance measurement systems. Henri sought to explore
Performance management is a tool that managers use to ensure that their companies remain at the top of their competitive edge. The Chartered Institute for Personnel Development (CIPD, 2008), defines performance management as a method by which individuals and teams are managed in a way that achieves high performance at an organisational level. The individuals within the organisation share an understanding of the achievement goals of the organisation. In order to achieve this, a general strategy is created, with each individual within the organisation understanding his or her role and requirements within such a strategy
As stated by Peter F. Drucker, “Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant.” Performance management is essential to achieving an organization 's mission statement and business goals, and also in attracting, retaining, and motivating qualified employees. There are many benefits and reasons why an organization should execute a performance management system. Performance appraisals establish the basis for qualifying, recognizing, and rewarding employee contributions. In this paper, I will discuss what performance management is, the problems with the current performance management system at my organization, how other organizations have succeeded in their performance management system and how I would advise management at my current organization to improve our performance management system.
Performance management is one of the most important activities of HR. It is not enough to simply go through the business as usual and much disliked annual exercise of assessing performance and driving rewards based on a performance assessment. The information system will be drive and modifies goals as needed, assesses performance against goals, and provides instant feedback which will give them an indication of their strength and weaknesses thus focusing on skill development and motivate employees to stay with the organisation. However this may lead to Substitution of individual judgments and Challenge the nature of an organisation and the role of management
Both organizational system and performance management system work to improve organizational performance capacity and effectiveness. First was organizational system which is when HRD professionals use previous evaluations as a baseline to determine if the organizational system has changed since previous evaluations. The changes that occurred due to leadership, structure, work climate, organizational culture, mission, policies and procedures need to be documented and examined carefully. Since the organizational systems don’t usually change from one point in time to another it’s important for HRD professionals to figure out any evolutionary changes that might occur. Second part of organizational effectiveness strategy is performance management system. Best way to evaluate performance management system is to assess the overall performance improvement activities that have changed from one specific point in time to another. HRD professionals would look at which interventions have been successful and which have not. There are eight functions within the performance management system. Those eight functions are human and material resources, learning systems, evaluating career planning, evaluating work design, evaluating the recruiting and selection process, evaluating performance coaching, evaluating the performance appraisal process and evaluating compensation and
Performance management is the process of planning work assignments, setting expectations, monitoring processes, rating performance, and rewarding performance. Performance management systems are used by organizations to identify, measure, and develop the performance of individuals and teams. The goal of an effective performance management system is to strategically align employee performance with company goals and objectives (Smither & London, 2009). In order to achieve optimal performance, organizations are tasked with implementing innovative solutions that ensure performance management systems that deliver real results and improve performance (MacMillan, 2015). Organizational leaders are responsible for understanding the performance management system in order to focus on employee efforts that will help in achieving both individual and organizational goals (Opm.gov). In this paper, the author will suggest the key processes that DSM needs to provide within its system in order to successfully link its key success factors (KSF). The author will select three drivers, and examine the central manner in which DSM management has aligned its business strategies to performance management. Lastly, the author will critique DSM’s competitive advantage by using three of the six assessment points outlined in the textbook.
Abstract This paper examines relationships between human resource management (HRM), work climate and organizational performance in the branch network of a retail bank. It extends previous research on group-level climate-performance and HRM-performance relationships and examines how climate and HRM function as joint antecedents of business unit performance. Significant correlations are found between work climate, human resource practices, and business performance. The results show that the correlations between climate and performance cannot be
This paper’s objective is to analyse an information system (IS) implementation case whether the system adoption is successful or failed. Author select IS implementation case in Pertamina where the author works from 2007 until the time of this writing. During
Managers should ensure that selected performance measurement system fits the unique requirements and business strategy of the firm. In general, primary economic activity of the company and its performance focus should dictate the selection of performance measurement model.
The following Review of Literature has given more importance to the some of the variables. i.e. A number of researchers and theories have been paying attention in the QWL concept and they have tried to identify the different kinds of dimensions that determinants the QWL.