Aims and Role of Performance Management Systems

The information collected by a performance management system is most frequently used for salary administration, performance feedback and the identification of employee strengths and weaknesses. In general, however, performance management systems can serve the following purposes:  (a) strategic, (b) administrative, (c) information, (d) developmental, (e) organizational maintenance, and (f) documentation. Let’s consider each of these purposes in turn.

Purposes served by a performance management system

• Strategic Purpose:

To help top management achieve strategic business objectives

• Administrative Purpose:

To furnish valid and useful information for making administrative decisions about employees

• Information Purpose:

To inform employees about how they are doing and about the organization’s and the supervisor’s expectations

• Developmental Purpose:

To allow managers to provide coaching to their employees

• Organizational maintenance Purpose:

To provide information to be used in workplace planning and allocation of human resources

• Documentation Purpose:

To collect useful information that can be used for various purposes (e.g., test development, personnel decisions)