Performance management is a crucial part
of effectively operating an organization and it plays an important role in
organizations across many different industries. It is a way for organizations
to set and realize their operational objectives. If performance management is
used effectively it can increase employee productivity and performance through
proper guidance and constructive management feedback. For performance
management to be most effective it must be linked to a company’s strategic
objectives and it must also be seen as more than just a bureaucratic necessity
by management. More recently, there has been some debate about whether
performance management is a necessary and effective tool for management. For
many people partaking in the evaluation process, it has been a dissatisfying
experience, which has called for its elimination within some organizations.
This paper will discuss the current problems with performance ratings,
potential improvements to the evaluation process and how many organizations
could benefit from the use of effective performance management. This paper will
also examine how Air Canada effectively used performance management to boost
its operations and increase their own employee performance.              

Performance management is an integral
part of effectively operating an organization. If performance management
becomes a routine process, is seen as more than a bureaucratic necessity and is
aligned with the strategic objectives of an organization it can become a very
powerful tool for increasing employee productivity and performance. Performance
ratings are often seen as a dissatisfying experience and can be a tense
experience for both managers and employees. There are a few companies such as
Adobe and General Electric who are opting to eliminate employee ratings and
evaluations because it is thought that their costs outweigh their benefits
(Cardy, 2016). [1]
The call to eliminate performance ratings seems like an easy solution for both
managers and employees. The elimination of performance ratings for managers
could be seen as one less bureaucratic job that needs to be completed and for
employees it would reduce the uncertainty and stress that is associated with
their performance reviews. There are certainly problems with performance
ratings such as limited effectiveness of rater training, interrater
disagreement, inadequate criteria or questionable validity but overall
performance ratings are not the issue (Cardy, 2016)[2].
It is evident that error and bias can have an immediate impact on performance
ratings; however, performance ratings are not the main source of difficulty
within performance management. The biggest problem with performance ratings is
that they tend to be seen by managers as a bureaucratic necessity and as a
result they do not invest the proper amount of time into getting them done
properly. Thinking of performance evaluations in this manner causes management
to distance themselves from the process and results in the importance of
employee ratings to be minimized. Another major problem that plagues the
performance management process is that some managers may feel uncomfortable
providing constructive feedback to their employees and will avoid completing
evaluations. Evaluating employee performance and providing constructive
feedback should be viewed as a central component of a manager’s job and is the
best method to improve performance management within a company. Organizations
should actively work towards changing the perception of performance management
from the need to complete forms or provide documentation to it’s human resource
department to one that is necessary for providing coaching to it’s employees
and as a means to improving their overall performance. A few ways that
organizations could centralize performance management and integrate it into
management’s everyday duties are including performance management into the
evaluation of managers, changing how performance management occurs and by
focusing on employee strengths and their future performance (Cardy, 2016).[3]
If giving employee evaluations is included in the evaluation of managers it
will be reinforce their importance and foster an environment where they will
become a regular occurrence. Performance evaluations are often seen as
something that needs to occur only at formal and set intervals but by changing
how they occur into a more routine process, managers will be able to provide
more timely and constructive feedback to employees that will create more
opportunities to correct their habits and to increase performance. By shifting
the evaluation process to a strength-based approach and one that is future
performance oriented, management can position itself to give more positive
feedback. In order to implement these types of improvements, management needs
to be given the necessary resources and skills to properly engage with their
employees and to address any potential performance issues. One other problem
with employee evaluations that is worth noting is that the evaluation criteria
are not always relevant to achieving the organizations strategic objectives.
Along with the above listed potential improvements to the performance
management process, it is imperative that employee evaluations are based on
behavioural competencies that are the most critical for successfully performing
their jobs and that the evaluation criteria are ones that promote the
organizations operational objectives (Gliddon, 2004).[4]
The employee evaluation system should support other strategic human resource functions
of an organization and in turn human resource processes such as succession
planning, employee development and management development should be able to
benefit from information that is collected through out the employee evaluation
process (Gliddon, 2004).[5]