Business Studies Assignment

Question

Evaluate the concepts of performance management, and identify the impact of inadequate performance reviews

Answer

Performance Management

            Performance management entails reviewing the performance of a business in a holistic manner in order to determine better ways in which it can reach its goals. In this undertaking, operational and strategic objectives must be aligned with the set of activities being conducted by the business. Moreover, all available information must be aggregated, meaning that managers need to be informed about the position of the company in terms of overall performance in order to make appropriate decisions (Otley, 1999). Thus, performance management may be thought of as a business strategy for enabling businesses to carry out the tasks of collecting, aggregating, and analyzing data from different sources and using it as a basis for making the most appropriate business decisions (Otley, 1999).  

ORDER BUSINESS STUDIES PAPER NOW

             Inadequate performance reviews tend to impact negatively on business operations. For instance, it would be foolhardy for a manager to expect productivity to improve based on performance reviews that were not conducted accurately. Moreover, it becomes extremely difficult for business processes to be monitored and analyzed correctly if performance reviews were not done as required. Other negative effects of inadequate performance reviews include decreased efficiency, inability to identify cost-saving business opportunities, inability to generate new business, and inaccurate analysis of risks. Moreover, managers who are not good at performance management and review often find it difficult to predict business outcomes and to measure critical business objectives.

Most importantly, inaccuracies in performance reviews may have a negative impact on the employees, who are the most valued resource for a business. Employees who feel that their performance and contribution to the growth of the business is not being accurately and consistently appraised are likely to become dissatisfied, leading to a low level of engagement with the business and an ultimate decrease in overall business performance.  

References

Otley, D. (1999). Performance management: a framework for management control systems research. Management Accounting Research, 10(4), 363–382.