Discuss the nature of an effective performance management system. In Essay

Discuss the nature of an effective performance management system. In your discussion, recommend the process that should be used - Essay Example It argues that there is no singular nature of effective performance management, instead effective performance management exists in a fluid and contextually specific reality. The essay also considers the nature of effective performance management within the real world context of service and consultancy firms. In considering the nature of effective performance management measures, one of the crucial elements is that of situating performance management in terms of a structural framework. This essay argues that in large part there are different levels of understanding that can be brought to performance management systems, with structural or overarching frameworks representing a general qualitative perspective on the nature of effectiveness, as well as defining the boundaries of performance management. One such framework is that proposed by Fitzgerald and Moon (1996) who broadly argue that there are a number of core competencies that must be implemented to achieve effective performance ma nagement. Within this context, they have outlined the most effective measures to be understanding one’s intentions, developing a range of performance standards, developing patterns of comparison, and implement a top down system. While Fitzgerald and Moon (1996)’s framework is powerful in its simplistic message, other researchers have articulated the characteristics of effective performance management from a different perspective. In these regards, Otley (2005) has advanced a notion of effective performance management from a more complex angle. In these regards, Otley states that performance management must heavily consider strategic measures, emphasize effectiveness or efficiency patterns, consider incentives, and follow a bottom down structure. The elements indicated by Otley and Fitzgerald and Moon constitute a broadly framed perspective on the nature of performance management. At this level of abstraction, the defining elements represent more of general overview of effective elements. One will note that the definitions contain contradictory elements. In these regards, it seems that the benefits of one method over the other are linked to the nature of the business system in which the measures are implemented. Another framework that articulates effective performance management is that which has been implemented by Otley (2007). In this research Otley examines previous conceptions of effective performance management, specifically those presented by Johnson and Kaplan (1987), as Otley argues that it is no longer relevant to consider performance management within the ‘management accounting’ paradigm. Ferreira and Otley (2009) considered the literature involving performance management systems and argued that traditional critical assumptions did not go far enough in articulating the essence of effective performance management. As such they proposed a new critical framework that examines the issue in terms of an extended framework of perf ormance management systems. Within this framework, some of the critical assumptions regarding what constitutes effective performance management are articulated as a means of advancing past critical assumptions. The framework developed is referred to as performance management systems, and it incorporates a number of elements from Otley’s previous theoretical matrices, augmenting them through the