Business – 2.1 HRM – Purpose and roles of HRM | e-Consult
2.1 HRM – Purpose and roles of HRM (1 questions)
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Performance management systems provide a structured approach to aligning individual performance with organisational goals. Their main advantages include:
- Clear goal setting – employees understand how their tasks contribute to overall objectives.
- Continuous feedback – regular reviews enable timely correction and development.
- Motivation through rewards – linking performance to pay or promotion encourages higher productivity.
Potential limitations are:
- Over‑emphasis on quantitative targets can neglect qualitative aspects such as teamwork.
- Bias in appraisal processes may demotivate staff.
- Administrative burden – excessive paperwork can divert time from core work.
The following table summarises the impact of key performance management components on organisational objectives:
| Component | Positive Impact | Possible Drawback |
| Goal setting | Improves focus on strategic targets | May lead to narrow, short‑term thinking |
| Regular feedback | Enhances employee development | Can become perfunctory if not genuine |
| Reward linkage | Boosts motivation and retention | May encourage unhealthy competition |