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Explain the strategic importance of conducting performance management

Performance management is strategically important because it can enhance employee motivation and productivity, support strategic goals, and facilitate strategic planning and change. Instrumentality, valence, and expectancy are key concepts in motivating employees. Effective performance management helps ensure that the organization's strategic goals are linked to the performance goals of individual employees and their work teams


Performance management

A formal, structured process used to measure, evaluate, and influence employees' job-related attitudes, behaviors, and performance results



has two decisions: decisions about which behaviors to engage in and decisions about how much effort to expend


expectancy theory

states that people choose their behaviors and effort levels after considering whether their behaviors and effort will improve their performance and lead to desired consequences



the relationship between making an effort and performing well



the relationship between performing well and its consequences



the value of the consequences to the employee


How does performance management fit within an integrated HRM system?

Effective performance management practices are aligned with the organizations internal environment, particularly its business strategy and company culture. Performance management practices should also be aligned with the organizations external environment, taking into consideration laws and regulations as well as country cultures. In addition, other HR activities should be closely aligned with performance management practices, including planning and change, job analysis and competency modeling, training, and performance-based pay.


Performance-driven culture

A company culture that depends on effective performance management


Valid performance measure

A measure that accurately reflects all aspects of the job, and nothing else


Deficient performance measure

When the performance measure does not assess all of the behaviors and results that are important and relevant to the job


Contaminated performance measure

When the performance measure assesses anything that is unimportant or irrelevant to the job


High performance work system (HPWS)

When performance management is tightly integrated with other HR activities to improve workforce competencies, attitudes, and motivation