THE CONCEPT AND THE MEANING OF PERFORMANCE MANAGEMENT

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THE CONCEPT AND THE MEANING OF PERFORMANCE
MANAGEMENT
MOHAMED OBAID JEMAEI OBAID ALHINDAASSI
Federal Authority for Identity, Citizenship Customs, and Port Security, United Arab Emirates.
MOHD NAJIB MANSOR
Universiti Utara Malaysia, Malaysia.
Abstract
Performance management is of paramount importance for organizations, serving as a comprehensive strategy to
align individual and team efforts with overarching business goals. By setting clear expectations and providing
regular feedback, performance management enhances productivity and efficiency. Moreover, it plays a pivotal
role in employee development, offering insights into strengths and areas for improvement, thereby enabling
personalized growth plans. The motivational impact of recognition and constructive feedback contributes to a
positive work environment, fostering employee engagement and commitment. Performance management systems
also aid in identifying training needs, ensuring that the workforce possesses the skills required for organizational
success. Beyond individual development, fair and informed decision-making related to promotions and
compensation is facilitated through transparent performance criteria, mitigating bias. Additionally, performance
management supports succession planning by identifying and nurturing high-potential employees. Regular
feedback loops within the system allow for real-time improvements, contributing to a culture of continuous
learning. Overall, it serves as a communication tool that aligns organizational objectives, creates unity among
employees, and establishes a foundation for sustained success.
INTRODUCTION
The concept of performance management need for continuously managing and rewarding
performance by way of getting the desired outcome or results from individual employee within
the context of organizational objectives (D. Berdicchia, Bracci, & Masino, 2022). The desired
outcome from employees in an organization entail monitoring their behaviour to ensure that
those behaviours do not go far from organizational objectives (Rehman et al., 2021). Also,
performance management encompasses both results and behaviour as behaviour stems out from
the performer and turns performance from a mere thought to course of action and outcome
(Armstrong, 2022).
Performance management systems are holistic because can comprehensively monitor
employees and groups as well as individuals (Jusoh, Yahya, Zainuddin, & Asiaei, 2021). The
performance management system is a combined procedure that involves both managers and
their subordinates who together identify common goal and which correlate to the higher goals
of the organization (Aliyu, Abubakar Yusuf, & Shuaibu, 2022). Performance management
system was conceptualized by various scholars and agencies, it could be understood that it
revolves around four key issues ranging from planning of performance, to managing
performance, to reviewing performance and finally rewarding performance (Malik & Laker,
2021). This explains that performance management system is a holistic trend that manages the

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overall employee performances (both individual and the group) from the day they were
employed to the day their services are disengaged either voluntarily or otherwise.
It could also be understood here that performance management system is more than a
technique, and it is also not just a process, rather a set of processes that holistically captures
issues of employee motivation, mentoring and evaluation to be able to identify areas to be
improved upon in the future (Biondi & Russo, 2022). Performance management system and
performance appraisal are two different concepts that are at times wrongly interchangeably
used. Performance management system begins the moment employees ‘jobs are described and
ends when they left their jobs. Therefore, performance management is broader and proactive
than performance appraisal which only focuses on determining how an individual is carrying
out assigned responsibilities and at the end variance will be observed between the desired
performance and actual performance (K. Hutaibat, Alhatabat, von Alberti-Alhtaybat, & Al-
Htaybat, 2021).
Performance management describes the process of finding and adhering to organizational
missions through key performance indicators so as to take counteractive actions that will keep
the organization on track (Ogalo, 2021). The strategic performance management is aimed at
ensuring that both the financial and non-financial targets of the organization are met
(Bananuka, Nkundabanyanga, Kaawaase, Mindra, & Kayongo, 2022). Performance
management system of organizations is believed by many researchers to have been born out of
the need to salvage human resource practices from some drawbacks and shortcomings
(Istikhoroh, Moeljadi, Sudarma, & Aisjah, 2021). Strategic performance management system
is a sort of value addition on the improvement accomplished alongside set goals and objectives
(Istikhoroh et al., 2021).
From those arguments it could be said that strategic performance management is an avenue for
the effective management of individuals and groups in order to achieve high levels of
organizational performance (Asiaei, Bontis, Alizadeh, & Yaghoubi, 2022). More importantly,
managing employee performance is a strong foundation for other processes within an
organization that contribute to achieving organizational objectives (Gilal, Ashraf, Gilal, Gilal,
& Channa, 2019).
There is indeed an array of strategies of measuring the effectiveness or otherwise of
performance management as there are varied goals and objectives pursued by different
organizations (Bryson & George, 2017). This is perhaps so because some organizations attach
their strategies for measuring the performance management system on the extent of achieving
the target, some prefer less errors, some are after quantity, some quality or both and a host of
others focus on the financial aspect. Organizational objectives, individual objectives,
performance development, and employee satisfaction are used as measures of performance
management, making it more thorough and elaborate. Performance management was measured
from the point of view of the organization, the employee, and the job itself (F. Cesarean,
Rodrigues, Castanheira, & Sabino, 2022).

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The employees that will motivate them to work towards attaining organizational goals (career
development, welfare), putting a benchmark that explains an acceptable level of performance,
then attaching the ethics (regulations) and finally weighing overall organizational performance
in terms of efficiency and effectiveness (Claus & Briscoe, 2009).
1. The Significance of Performance Management
The management of the organization utilized to strive for administrative support for the
organization by attaining an effective performance management that will be able to provide the
balanced with regard to resources used. This is impossible to achieve without an effective
performance management. As a result, the value of performance management became apparent
through the assistance it offered to many administrative aspects (Zawawi, Halim, &
Kamarunzaman, 2022).
The strategic benefits also highlighted the importance of performance management, since the
company's management will use the system to link employee activities to the strategic
organization goals. Because of this, the company will use performance management as a tool
to enable fruitful business change (Van Thielen et al., 2022). The advantages that performance
management used to provide the company in terms of development may be listed as the third
benefit.
The measuring tools that performance management provide to boost employee performance
and raise their contribution to the objectives of the company utilized to demonstrate these
benefits. Such encouragement will be visible in how performance management promotes the
growth of continuous changes inside the company that are intended to strengthen its culture
and foster innovation (Jiang, Shi, Lin, & Liu, 2020).
2. Assessing Performance Management
By examining an employee's past performance and keeping tabs on them going forward,
performance management controls an employee's performance. The entire goal of performance
management is to assess an employee's value to the organization and ability to live up to
expectations. Performance management is thought to be incomplete without performance
appraisal. It is also referred to as the review, and the organization frequently conducts one every
year.
The employee's development, abilities, and ability to meet expectations are assessed in this
way. It will be determined through this examination whether the individual has the
compatibility and skills the organization is looking for. In contrast, if an employee is
performing exceptionally well, the company may offer incentives or bonuses, and if there is a
performance gap, management will be in charge of improving employee performance by
putting into place particular development plans. Another tool for performance management is
performance feedback.

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This kind of feedback is crucial to the practice; it completes the process and aids management
in making decisions about an employee's position in the company. The HR manager provides
feedback to the employee regarding their performance, thus whether or not the individual
receives a bonus or other type of recognition relies on the input. Feedback must be given in
private, be concise and to the point, and include all deficiencies so that the employee can fix
them (Hristov et al., 2021).
3. Performance Management Process
Since employee performance and company performance are directly correlated, the company
uses the performance management process to assess employee performance and ensure that the
company's overall performance is satisfactory. Additionally, this procedure must be completed
by every employee (da Costa, Gonçalves, António, Pereira, & Dia, 2019). Followings are the
6 steps of performance management process:
▪ Define- Setting goals is the first stage in the performance management process. For the
employees to aspire to, precise performance outcomes are defined in this step. To make them
clearer and more exact, the organization establishes the performance outcomes in divisions
and departments. For instance, the sales department wants to make $1 million a year in
revenue.
 Develop- To ensure that the employee is straightforward and capable of achieving the
specified performance outcomes, the development of the employee's behavior, goals, and
actions are maintained throughout this process. Setting goals helps an employee get on
the correct track to accomplish particular objectives.
 Support- In the meantime, the manager's assistance is always needed by the employee to
keep motivated during the busy workday. For the employee, the assistance acts as a spark.
Discussions about the employee's ongoing performance are required in this level.
 Evaluate- Whatever the results are after the final three processes, they must be assessed.
The secret to successful performance management is proper evaluation.
 Result- The HR manager must determine the employee's performance strengths and flaws
after sorting the results. The objective is to ensure that the employee does not repeat the
same mistakes, regardless of whether they require training, coaching, or any other
approach.
 Improvement. The HR manager must also impose severe penalties in order to encourage
improvements. Improvements might be made by coaching or training as well as by
making sure the employee is aware that if he makes mistakes again, he risked being fired.

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The following diagram clarifying the above six steps:
Figure 1: Performance Management Process
Source: Researcher
4. Performance Management Approaches
Different ways have been used to discuss performance management, one of which is the
comparison approach. Many businesses have attempted to improve the comparative approach
in performance management so that different contracts of investigation plans can be in line
with one another. A good method of comparing different species using this method (Dogan,
2022). A different type of performance management strategy is the attribute approach, which
is used to assess an organization's performance through its portfolio. By identifying sources of
excess return, this type of performance management aids businesses in the investment of active
funds (Waladali, 2022). Another method to performance management is the behavioral
approach, which focuses on how the environment and outside stimuli might impact an
employee's mental state while they are working for a company (Zafar, John, Basharat, &
Timmons, 2022).
The performance management system's results-based approach offers a suitable framework for
producing appropriate results from a variety of learning, guiding, and communicative goals.
With the right strategy, an organization can achieve its objectives, fulfill the right purpose,
assign blame, improve performance, and strengthen successful cultural value (García Osma,
Gomez-Conde, & Lopez-Valeiras, 2022). The quality approach is a crucial type of performance
management strategy that aids in raising the standard of service provided to customers.

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Delivering efficient services would help the firm improve its quality strategy and strengthen its
position in the market (Sureka, Kumar, Kumar Mangla, & Hourneaux Junior, 2020).
5. Effective Performance Management
The efficiency of performance management has been the subject of numerous research that
linked theoretical framework with practical implementations. One of the most important factors
that helps in achieving effectiveness is the generalization of the obligation to implement
performance management on all parties affecting its success in the organization as it pertains
to all employees at all levels. Additionally, the sources of performance management must be
distinct and comprehensive. In certain businesses, assessing performance through customer
satisfaction is a common practice. In other organizations, measuring performance through
adopted budget accomplishments is the norm. Designing performance management goals to
ensure ongoing organizational improvements is one of the essential elements of good
performance management. The implementation of effective performance management will be
assisted by the activation of communication procedures. Through this communication, which
fosters the sharing of experiences and strengthens the sense of teamwork, all employees in the
organization will work to contribute to the achievement of the organization's goals. Planning
the implementation process for performance assessment is essential to ensuring its alignment
with the organization's strategy. The organization must be able to motivate employees to
contribute to the achievement of the organization's goals through the use of performance
management, which necessitates careful planning for all performance management methods.
6. Performance Management in the UAE
Organizations in the UAE must have a better grasp of performance management success in
order to target their resources and efforts in the most productive ways possible (Prasad,
Pradhan, Gaurav, & Sabat, 2020). As was previously said, there has not been much empirical
study of PMS in the UAE and the Middle East. The literature on performance management in
the public sectors in the UAE is lacking. After carefully reviewing the available literature on
performance management in the UAE, it was determined that none of it was equivalent to the
findings of this thesis. However, the literature concentrating on underdeveloped nations is
utilized as a proxy due to the dearth of research on performance management in the UAE.
However, there isn't a lot of literature that looks at many areas of performance management,
even in developing nations (Alshams, Adaikalam, Karim, Hock, & Hossain, 2020). Most of the
performance management literature concentrates on performance management in the private
sector; less emphasis is on the public sector (Al-Gamrh, Ku Ismail, Ahsan, & Alquhaif, 2020).
The highest governing body in the nation, the Abu Dhabi Executive Council, established goals
for all government organizations to meet in order to align their strategic initiatives with the
Abu Dhabi Vision 2030. In order to do this, the Abu Dhabi Water & Electricity Authority
(ADWEA) has launched a project with the goal of entirely revamping their company to become
a more effective, customer-focused, performance-oriented organization while also making the
Abu Dhabi 2030 Vision possible. The Balanced Scorecard (BSC), the same framework utilized
by the Abu Dhabi Executive Council, was chosen by the ADWEA Board of Management as

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the ideal framework for performance management and plan execution. The BSC was seen as a
tool for addressing the needs of a wide range of stakeholders both now and in the future while
striking a balance between risk, cost, and performance. Its official name is ADWEA Strategic
Transformation (ASTRO).
Although it was initially created to establish specific priorities, key performance indicators,
and initiatives to measure an organization's performance, all of the organizations in this study
joined ASTRO, which was launched in 2009 and played a critical role in unifying the group's
companies around the ADWEA strategy. The ASTRO project's overarching goal was to
construct and design a framework for the execution of a strategy with the intention of
improving alignment, interaction, and collaboration with ADWEA and its group of enterprises.
However, on a fundamental level, it makes it easier to translate the strategy into operational
terms and enables the company to track the execution level.
CONCLUSION
The role of performance management in organizational success cannot be overstated. Serving
as a multifaceted strategy, it not only aligns individual and team efforts with broader business
objectives but also cultivates an environment of productivity, efficiency, and continuous
improvement. The emphasis on setting clear expectations and providing regular feedback
fosters not only employee development but also a positive and engaging workplace culture. By
addressing individual strengths and areas for improvement, performance management enables
personalized growth plans, contributing to the overall skill enhancement of the workforce. The
transparency in performance criteria promotes fair decision-making, reducing bias in matters
of promotions and compensation. Furthermore, its contribution to identifying and nurturing
high-potential employees supports effective succession planning. The incorporation of regular
feedback loops allows for adaptive improvements, emphasizing a culture of continuous
learning and development. Ultimately, performance management serves as a vital
communication tool, harmonizing organizational objectives, fostering unity among employees,
and laying the groundwork for sustained success in the dynamic landscape of the modern
workplace.
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