CHAPTER 2
LITERATURE REVIEW
“The NPM Model has focused on delivering market-inspired results and was primarily concerned with efficiency and performance.” (Jarrar and Schiuma, 2007)
2.1. INTRODUCTION
Efficiency and performance become two key words for the reform that held by countries in the world. Started in the developed countries, namely United Kingdom and United States under their leader, Margaret Thatcher and Ronald Reagan era, this doctrine then spread to Australia, New Zealand, Europe, Africa, Latin America and Asia. NPM spread and breadth expand globally.
Inevitably, this so-called doctrine or paradigm is delivering market-based which one’s country like or dislike diffuse theirs governance in order to well implement it. This movement also inevitably followed as one of the pressure of country’s exogenous factors.
The main purpose of this Chapter is to address NPM and Performance Management related literatures. First, the definition of NPM, its objectives and characteristic is clarified in Section 2.2.1. Section 2.3 expands on the explanation of NPM in developing countries. The Chapter progresses with elaborating Performance Management themes in Section 2.4 encompassing definition, essences and challenges, before concluding in Section 2.5.
2.2. NPM AND PERFORMANCE MANAGEMENT ISSUE
This section pertains NPM and performance management issues, NPM definition, objectives and elements; how the performance management as main elements of NPM, relevancies of
Performance management is about creating a culture that encourages the continuous improvement of business processes and of individuals’ skills, behaviour and contribution. It is a repetitive process that is continually reviewed and is both strategic and integrated. It is about broad issues and long-term goals and integrated by linking various aspects of the business, people management, individuals and teams to delivering successful results in organisations. It does this by improving performance and developing the capabilities of teams and individuals.
Traditional establishment, likewise an alternative system has their advantages and disadvantages. Western countries are characterized by
Performance management is a tool that managers use to ensure that their companies remain at the top of their competitive edge. The Chartered Institute for Personnel Development (CIPD, 2008), defines performance management as a method by which individuals and teams are managed in a way that achieves high performance at an organisational level. The individuals within the organisation share an understanding of the achievement goals of the organisation. In order to achieve this, a general strategy is created, with each individual within the organisation understanding his or her role and requirements within such a strategy
Performance management is the process of planning work assignments, setting expectations, monitoring processes, rating performance, and rewarding performance. Performance management systems are used by organizations to identify, measure, and develop the performance of individuals and teams. The goal of an effective performance management system is to strategically align employee performance with company goals and objectives (Smither & London, 2009). In order to achieve optimal performance, organizations are tasked with implementing innovative solutions that ensure performance management systems that deliver real results and improve performance (MacMillan, 2015). Organizational leaders are responsible for understanding the performance management system in order to focus on employee efforts that will help in achieving both individual and organizational goals (Opm.gov). In this paper, the author will suggest the key processes that DSM needs to provide within its system in order to successfully link its key success factors (KSF). The author will select three drivers, and examine the central manner in which DSM management has aligned its business strategies to performance management. Lastly, the author will critique DSM’s competitive advantage by using three of the six assessment points outlined in the textbook.
The performance management in the public service is guided by several Acts, Acts that regulate and assign the senior management daily tasks as to attain and achieve the organizational goals and objectives. Public Institutions as mandated by the Constitution, their goals is to deliver effective and efficient service delivery to the inhabitants of the state. Following are the regulatory frameworks for the performance management within the public service.
The first port of call, or initial point of contact, for performance management is usually the
Companies Performance Management system need to concentrate on the overall improvement the way the company performs. They achieve this by managing the performances of all personnel within the company no matter who they may be. This can be attained by ensuring that everyone within the company truly understands what the overall mission and goals that have been set for them within the company. Performance Management system has a very distinct way that it can manage the performance of the entire company and as long as everyone understands the goals that the company sets forth than the company as a whole will meet those goals. The developmental objective is fulfilled by defining the training requirements of the employees based on the results of the reviews and diagnosis of the individual and organizational competencies. (MSG)
Performance Management is both a strategic (about broad issues and long-term goals) and an integrated (linking various aspects of the business, people management, individuals and teams) approach to delivering successful results in organisations by improving the performance and developing the capabilities of teams and individuals.
The literature review brings up some interesting common themes and issues that run through the existing literature, research and definitions of performance management. These common themes will focus on features of performance management and its application in an organisation.
The main reason for this report is to exhibit an understanding of Performance management. These days, organisations take diverse ways to deal with competitive advantage. Thus, there are a mixed bag of definitions for Performance Management. Performance management is a vital issue. It is based upon the human side of administration, and focuses on representatives as essential resources inside their organizations. As indicated by Price "Performance management is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies" (2007: 31).
As aforementioned that performance measurement as one of main characteristic of NPM (Pollitt 2007b:150), the Table 1.1. depicts a more clear division of the separation of the undisputed and contested characteristics of NPM summarized by Gruening (2001) from scholars likewise Borins, 1994, 1995; Boston, Martin, Pallot and Walsh, 1996; Buschor, 1994; Gore, 1994; Hood, 1991; Naschold et.al., 1995; Reichard, 1992; and Stewart and Walsh, 1992.
Results-based monitoring and evaluation is a set of concepts associated with performance management or results based management (RBM) strategy, which evolved in 1990’s. During that period, many countries introduced extensive management reforms in responding social, political and economic pressures that were triggered by the factors of globalisation, budget deficits, structural adjustments and competitiveness (Binnendijk, 2000). Central feature to most of those reforms has been an emphasis on ‘performance improvement’ and ‘achievement of targeted/expected results’ which were the core features of RBM. RBM has been used by many development agencies, governments, and donor agencies in delivering development interventions and has become an emerging trend in contemporary development practice.
Performance management relates to an organization’s ability to implement a system to evaluate and advance employee performance. Achieving peak performance requires consistency, clear objectives, and constructive employee evaluation. According to Mithas, Ramasubbu, & Sambamurthy (2011), an organization must design the performance management system based on extensive research about the organization’s mission, and then properly communicate the purpose of the system to employees, stakeholders, and decision makers. After the performing the research, the information should be used to establish the appropriate performance management specialized for the organization. In addition, an effective performance management system should align
The definition of the term ‘performance management’ varies in different literatures. As Hutchinson(2013) summed up, combined with Den Harton’s theory(2004), it is a continuous process which links individual and team objectives with organizational goals by measure and improve employee’s skill and performance. According to Armstrong (2012), human resource management aims at making sure the organization has the most talented, skilled and engaged people in order to attain its goals. In this context, performance management is one staple practice helping managers identifying and retaining most competent employees as well as correcting poor performance.
I have experience in performance management and understand the performance appraisal or a disciplinary process. It aims to improve organisational, functional, team and individual performances. Effective performance management measures the progress being made towards the achievement of the organisation's business objectives. It does so by planning, establishing, monitoring, reviewing and evaluating organisational, functional, team and individual performance.