How can Performance Management System lead to a competitive advantage?


The world has become a global village and the horizons in which the business organizations operate are expanding. As a developing country, India looks out for ways and techniques of the developed nations which can help it in achieving better results. As the major dependence is on the industrial sector, it is often advised that human resources are put to their best use and generate efficient results.

Every organization whether it is a small scale or a large scale multi-national company monitors the performance of the employees working with them. The measurement of performance has its pros and cons. Though it’s mandatory from the company’s point of view yet it appears to be a strict law to the employees. However, this measurement scale can be used as a competitive tool for both the employees as well as the employer.

But the question is HOW?

Performance Management System, as the name suggests, is the systematic and electronic way of measuring the performance, efficiency, and efforts of every individual employee within the organization. It is a manner through which a company achieves its goals by aligning it with the aspirations and personal objectives of the employees. Certain standards are well-defined against which the level of effort and hard work of all the employees is compared, and final statistical results are drawn. Employees or human capital is the backbone of any business entity. It is through their time and efforts that the corporations can achieve their goals and eventually yield profits. Thus, appreciation or for that matter any flaws in the working of the human resource should be highlighted.

With performance management software, an employer gets to know about the employee’s skills and knowledge, and the areas where they lack to correct them by providing proper training or by organizing workshops. This at the same time motivates the employees to perform better than their fellow mates in the crave for appreciation and promotions leading to more hard work from their end. Moreover, it can be seen as an opportunity that enables the employees to brush up their skills, acquire the new ones, and gain experiences which will eventually lead an upgrade in their professional base.

Being a computerized mechanism of measurement, the chances of any errors occurring are least, and each individual’s performance can be measured accurately. This serves as another benefit; due to the accuracy in the evaluation, no employees can come up with grievances concerning fellow teammates when it comes to the level of an initiative taken by any particular staff member applying for the project work. This clear demarcation of performance levels makes employees confident about their individual goals and efforts and in turn, persuades them to perform better and better. If all the employees would be particular about their work, it would eventually lead to increased productivity for the business entity and yield profits. Also, Maslow’s Hierarchy of Needs Theory comes into the application here, which reflects the very basic needs of the employee is fulfilled, he/she would move towards upper needs which include safety, social, esteem and self-actualization needs. If an employee is praised for his performance and work his need for self-appreciation and respect is satisfied, and he will now work even better to attain a position that would satisfy his self-esteem needs.

Therefore, organizations should go in for performance measurement systems or software as it adds on a competitive edge amongst the employees and results in profitable outcomes.

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