Performance Management

Performance management is defined as a "process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of an organisation" (Aguinis, 2009). Strategic planning outlines an organisations vision, goals and mission, this information helps to create accurate job descriptions and provides the basis of which performance management is measured. A performance management system consists of results, behaviours and developmental plans. It is crucial that a performance management system coincides with an organisations strategic plan for it to work effectively (Aguinis, 2009). If an organisations goals, vision and mission are unclear this can affect the accuracy of a performance management system and how successful it will be. Every function of an organisation has its own specific role to play but the strategic plan must be understood and consistent through each function so that everyone is working toward the same goals (Steiner, 1979).

Poor performance management can have many negative consequences, which will affect each different level of an organisation and how successful it may be. As a result of a badly implemented performance management system employees may become resentful, lack the motivation to perform their job efficiently and increase the chance of higher staff turnover. Performance management systems cost money and require resources, time and commitment, which are wasted when a system is not properly executed (Duff, 2010). Poor implementation may also leave an organisation vulnerable and increase the risk of litigation. Strategic planning also plays an important role, if the organisations objectives and goals are not evident or not communicated clearly to employees, then this may create misleading expectations between higher level management and lower-junior lever employees. This can cause staff to feel de-motivated and irritated which can create "...risky and dysfunctional behaviour..." (Duff, 2012) from employees, which can result in havoc in an organisation and diminish its chances of success. An organisation may not perform to its best and only achieve mediocre results if its performance measures are not aligned with its strategic plan and objectives. (Duff, 2010) It is crucial to an organisation that strategic planning be well thought out and appropriate actions are taken to ensure the organisations objectives, goals, mission and vision are achieved and good performance management systems are in place to help employees stay motivated and satisfied within their job. Organisations have the best opportunity to thrive and attain preferred outcomes when strategic planning and performance management work hand-in-hand (Schmidt., Layock, 2011).

Every function of an organisation has to be coherent like a well oiled machine in order for an organisation to do this, there needs to be a clear understanding of each role and how it will contribute to the organisations overall objectives and goals. (Duff, 1979) For example if an organisations long term goals were to open stores overseas in India, there would be certain steps that needed to be followed by each department in order for this to happen and have the most chance of being successful. To list a few examples; Marketing would need to find out if there is a demand for the product, cost of the product and the promotion strategy. Advertising would be responsible for promoting the product to its targeted