Performance management involves all those activities that help in achieving the goals not only efficiently but effectively as well. In performance management, attention can be focused on the performance of a certain organization, employee, and department or even on a process to create a good product. In other words, we can say that performance management is a process to align the organizational resources, employees and systems for the sake of strategic objectives.
Performance management system is commonly used in the workplace where people interact with each other and their environments to produce the desired results. A performance management system helps in aligning the personal goals of the employees with the organizational goals and increases the efficiency and the profitability of the business.
Advantages of Performance Management:
There is a clear correlation between the improved efficiency of an organization and the performance management program. Implementation of a management system in an organization facilitates the improved efficiency and the positive outcomes can be seen clearly after exercising this system. Key benefits that can be derived after implementing this performance management system are as follows,
- Positive Financial Gain:
It has been observed that when this management system is being applied in an organization, it helps in generating the high financial revenues. When the personal goals of the employees are being aligned with the organizational goals, this thing stimulates the employees to work efficiently and effectively. Performance management systemthing directly influences the revenues of the organization and it generates high returns. Secondly, when the efficiency of the employees rises, the cost gets reduced ultimately. The profit margin becomes high and organization enjoys high revenues.
- Highly Motivated Workforce:
Performance management is a source of motivating the workforce because it helps in optimizing the incentive plans to the certain goals for the sake of over achievement. It also helps in improving the employee engagement because every employee knows that how he or she is contributing to the high level goals of his organization.
Performance management system builds the confidence of the employee on the bonus payment process so they feel highly motivated.
- Increased Management Control:
Another great benefit of performance management is that it helps in increasing the management control. It is quite responsive to the actual management needs and it is flexible in nature.
In short, performance management is good as a whole and all those organizations where it is utilized; they are deriving the great benefits no doubt.
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