PMS and strategic planning
A performance management system is the key factor used in determining whether an organization can manage its human resources and talent effectively. Performance management provides information on who should be trained and in what areas, which employees should be rewarded, and what type of skills are lacking at the organization or nit level. Therefore, performance management also provides information on the type of employees that should be hired. When implemented well, performance management systems provide critical information that allows organizations to make sound decisions regarding their people resources.
Strategic planning involves defining the organization’s present and future identify. The overall purpose of a strategic plan is to serve as a blueprint that allows organizations to allocate resources in a way that provides that organization with a competitive advantage.
Strategic planning serves several purposes, including defining an organization’s identify preparing for the future, analyzing the environment, providing focus, creating a culture of cooperation, generating new options, and serving as a guide for the daily activities of all organizational members.
Performance management systems must rely on the strategic plan to be useful. The behaviours, results, and developmental plans of all employees must be aligned with the vision, mission, goals, and strategies of the organization and unit.
The various choices in designing the performance management system are directly affected by an organization’s strategic plan. Different missions and visions lead to different types of systems, for example, emphasizing behaviours (e.g., processes) as opposed to results. (e.g., outcomes)
A Human Resource strategy is a business’s overall plan for managing its human capital to align it with its business activities. The Human Resource strategy sets the direction for all the key areas of HR, including hiring, performance appraisal, development, and compensation.
The HR strategy is thus a long-term plan that dictates HR practices throughout the organization.
The HR strategy is based on the organizational strategy. The HR strategy touches on all the key areas in HR. These include recruitment, learning & development, performance appraisal and management, compensation, and succession planning.
An example of an HR strategy is an HR mission statement and HR vision, with concrete, high-level actions about how to execute on this mission and vision.