An effective performance management system has several characteristics that define it. This includes having clear organizational goals. The goals should be specific, achievable, measurable, time-bound and realistic. Other characteristics include the availability of a standardised process that has well-defined performance standards, mutual trust and corporation, the competence of people managing the process, feedback and participation of employees, focus on job-related performance and behaviour among others. These are characteristics that ensure the system has attained maximum productivity while avoiding any form of laxity at all times. If the characteristics entailed were opposite of what is listed above, the performance management system would not serve its purpose.

SMART is an acronym that gives a criterion for the setting of objectives and priorities within an organisation. Priorities involved include business objectives that are ranked as being critical. These objectives are executed based on how they are considered to be critical with regards to the organisation’s business. Another priority is ranking the objectives based on the impact they will have on organisational strategic goals. The uses of these priorities and objectives include the creation of a sense of shared purpose among the employees, provision of vivid direction and expected outcomes, alignment of the employees’ goals with organisational vision and strategy, support for individual performance reviews, enabling feedback and learning and provision of decision making and operational planning.

Appraisals entail an ongoing process that is used to evaluate employees’ performance. There are various best practices that are accepted with regards to appraisals. Among them is agreement on performance expectations. This aspect is not decided by a single individual but various relevant stakeholders including employees. Another best practice is clarity about the process and purpose of the appraisal. This ensures that the main objective is maintained at all times. The aspect deters the organisation from using the appraisal as a tool to conduct witch-hunt. Appraisals are also expected to provide suitable development and learning opportunities. This is through the information generated during the period of its execution. It is expected of the organisation for them to act upon any information derived for the betterment of future operations.

A variety of factors ought to be taken into consideration when managing people’s performance and wellbeing. They include individual factors, non-work factors, work performance and work environment factors. Non-work factors include family and relationships, finance and lifestyle. These factors might not seem relevant to the organisation, but they are likely to affect the organisation performance in one way or another. If ignored, they might be detrimental. Individual factors on the other hand include personal behaviours, ability to cope, attitudes, experiences, physical and mental health just to mention a few. These are factors that might present a stumbling block to employees’ performance in one way or another. Work environment factors on its part entail the level of control, work demands, role clarity, level of support, degree of organisational change and working relationships. Some of these factors might be unfavourable hence making it difficult for the wellbeing and performance of employees to be enhanced.

Following grievance and disciplinary process is important for the organisation. Among the importance of these processes is ensuring that reasonable standards of behaviour have been maintained on both sides. It is difficult to identify a problem and ways of solving it if a due process is not followed. All the information will not be forthcoming. The process also ensures that there are no probabilities of breach of contract claims. To some extent, there is also a reduction of the impact of the amount awarded by an employment tribunal in case there is a crisis between an employee and employer.

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