? For it, it is essential to understand what does performance mean. Performance is the successful deliverance of the capability of an individual to the work in which he/she is involved. So, from this statement we can clearly derive the meaning of performance management system. It is a conventional term used for optimizing the efforts of an individual in a particular job. His performance is assessed on the basis of his contribution towards the wealth of the company.
The main goal of a Performance Management system is that it comes out with the comparison that the individual is getting his salary and what is the company gaining with his inputs. In general sense, it frames a good conversation between a manager and his employees, thus helpful in conveying the expectations of both sides. This enhances the performance level.
A good performance management endows upon the company the power and resources to judge the individuals potential and contribution to the accounts of the company. CIPD believes that performance management is difficult because of its ownership. The owner of the company is not just the boss but the employees too who work day and night to accomplish a task. So, every member has to be enthusiastic. If a company is targeting to achieve some financial objective, then all the growth plans and business proposals should be discussed in a fine way as the success of the company is dependant on the good performance management of the individuals.
The ties of a Performance Management system are held by the HR department of a company. The aim of this system is to process the results of the activities performed towards a particular goal. The origins of this system can be dated back to 1950s.