Performance management systems and their effectiveness in SME's in the North West of Ireland : a case study

Abstract

Research suggests that performance management rests on the assumption that if you can raise the performance levels of individuals, then better organisational performance will follow. Performance Management is about ensuring that an organisation’s employees reach their potential and remain committed and motivated. After a review of the literature relevant to performance management systems, this dissertation confines its research to a case study of the effectiveness of a performance management system in a small to medium sized enterprise (SME) in the North West o f Ireland. According to IBEC (2007) business productivity, financial impact and shareholder value are all realised through the collective performance of individuals at work. Clear corporate goals lead to departmental, team and individual objectives that are precise and integrated with business needs. By exploring the implementation and development o f the performance management system at Masonite Ireland, this study contributes towards an enhanced understanding o f the effectiveness of such a system in a small and medium sized enterprise (SME). Through the use of document analysis and qualitative interviews with six senior Managers, the study findings suggest that performance management systems do result in greater financial performance, increased employee productivity and more motivated employees. The findings of the study suggest that performance management in Masonite has provided many positive contributions to the organisation, especially in the area of training and development. This identification of talent, especially in terms of the current economic climate is paramount to the long term sustainability o f the organisation. Evidence suggests that these benefits o f having a performance management system are applicable to other SME’s.