Business Studies
Strategic Management Topic 7 Q4
What is the difference between performance measurement and performance management? How does the combination of both enable an organization to achieve and maintain a well-balanced and effective performance management system?
ANSWER
The Difference between Performance Measurement and Performance Management
Performance management and performance measurement are among the most widely used HR practices in today’s organizations. Performance management ensures that employees accomplish goals and objectives by following an appropriate strategy. Ideally, the performance management system allows employees to perform at their best while allowing organizations to achieve targets efficiently (Okwir, Nudurupati, Ginieis, and Angelis, 2018). Performance management considers the present and future of the company as well as what can be done to help the company improve its performance and meet its future goals.
On the other hand, performance measurement compares actual outcomes against goals or standards established in advance. Performance measurement evaluates the degree of achievement against predetermined objectives (Okwir, Nudurupati, Ginieis, and Angelis, 2018). Measures may be quantitative or qualitative, depending on the nature of the evaluation process. The difference between performance measurement and performance management is that the former focuses on what has been achieved, whereas the latter focuses on how performance was accomplished.
How the Combination of Performance Measurement and Management enables an organization to achieve and maintain a Well-Balanced and Effective Performance Management System
A well balanced and effective performance management system guarantees that personal and team goals are linked to the organizational goals. A performance management system requires both performance measurement and performance management systems to operate successfully. The performance measurement and management works towards improving the overall organizational performance through the management of performance of all individuals and teams as well as facilitating the achievement of overall organizational goals and ambitions. Performance measurement and management are both critical components to any successful performance management system since they enable the company to achieve its goals, both short-term and long-term (Okwir, Nudurupati, Ginieis, and Angelis, 2018). Performance measurement can help to determine if the company needs to make any adjustments in terms of processes, staffing levels, and/or employee training requirements. Performance management enables an organization to ensure that everything is operating efficiently; it helps clarify roles and responsibilities, provide feedback for employees who need it, and develop internal training programs specific to an individual employee or organizational groups. The combination of performance measurement and management allows the organization to build an effective performance management system that has the capability to set goals, review, and improve performance.
References
Okwir, S., Nudurupati, S. S., Ginieis, M., & Angelis, J. (2018). Performance measurement and management systems: a perspective from complexity theory. International Journal of Management Reviews, 20(3), 731-754.
