How does performance management contribute to strategic HRM?

Performance management contributes to strategic HRM primarily by aligning individual goals with organizational objectives. This alignment is crucial for ensuring that every employee understands how their specific contributions can influence the overall success of the organization. By setting clear performance expectations and providing ongoing feedback, performance management facilitates a connection between the day-to-day activities of employees and the strategic aims of the organization.

When individual performance is connected to broader strategic goals, employees are more likely to be motivated and engaged, leading to improved productivity and job satisfaction. This process encourages a culture of continuous improvement and helps to identify skill gaps or areas for development, ultimately supporting the organization’s strategic direction.

In contrast, options that suggest reducing employee responsibilities or focusing solely on compensation do not capture the holistic role of performance management in aligning workforce efforts with strategic goals. Additionally, the idea of preventing feedback from being shared directly undermines the principles of effective performance management, which relies on open communication and collaboration to drive performance improvement.