Research on Performance Management of Chinese SME

Abstract

Human resource plays a key role in economic life, which determines the competitive advantage of one enterprise over another. Performance management, as the core of modern human resource management, is more incentive and guiding than eliminating or promoting employees. Based on discussing the effects of performance management in enterprise operations, this paper analyzes problems in performance management of SME, and advances suggestions for SME carrying out effective performance management.Keywords: Small and medium-sized enterprise (SME), Human resource management, Performance management Background of the researchHuman resource is the most active factor in economic activity, and also the most important resource. It has a special effect on economic growth, and also important meanings for the survival and development of enterprise. The concept of human resource management appears after Drucker suggesting the concept of human resource in 1954. It develops fast though it does not have a long history. In the past three decades, human resource management experienced two important changes. The first is to become human resource management from general personnel management. The second is to become strategic human resource management from human resource management. Human resource management includes seven aspects: human resource planning, job analysis, recruitment, performance management, compensation management, training and development, and employee relationship management. Here, performance management is the core of whole system. Although Chinese enterprises have achieved some successes in performance management of human resource, there is still a huge gap, compared to western developed countries. In particular, because of undeveloped theories, low management level, poor quality of staff, and outdated management ideas, Chinese SMEs just mechanically copy and apply some theories of performance management without necessary empirical analysis and resource, exposing many imperfections. The application of performance management in enterprise strategyPerformance management is a process in which managers and employees reach a consensus on responsibilities, goals, and how to achieve success, and also a process of strengthening practical management and driving employees to gain excellent performance. As for the basic functions of human resource management, performance management is the core, which connects closely with every ring of human resource management.First of all, job analysis is an important base for performance management. Job analysis is to establish the job responsibilities of certain position, by which forming key indicators for evaluating the performance of the position. These indicators are standards for evaluating the performance of employees in the position. Job analysis provides the base for the execution of performance management.Secondly, performance management is an important factor determining the compensation. For different compensation systems and different positions, performance management pres...

Performance Management in Medium-Sized Enterprises

“…These studies suggest that SMEs, in general, face difficulties in the practice of performance management. For instance, Chen (2011) found that SMEs find difficulties in the skillful implementation and use of performance management. Soltani et al.…”

“…Th e review of the literature suggests it is very rare to fi nd previous studies that have specifi cally investigated performance management in medium-sized enterprises. However, few previous studies are available on performance management in SMEs, which consider both small and medium-sized enterprises as a single category (e.g., Brown & Heywood, 2005 ;Chen, 2011 ;Kiriri, 2005 ;Soltani et al, 2004 ;Stonehouse & Pemberton, 2002 ;Wijetunge, 2014 ;Zheng et al, 2009 ). Th ese studies suggest that SMEs, in general, face diffi culties in the practice of performance management.…”

“…Th ese studies suggest that SMEs, in general, face diffi culties in the practice of performance management. For instance, Chen ( 2011 ) found that SMEs fi nd diffi culties in the skillful implementation and use of performance management. Soltani et al ( 2004 ) found that SMEs rarely use performance management information for diagnosing training and development needs.…”

“…In the foregoing context, the present study investigates performance management practices of medium‐sized enterprises in Sri Lanka. Previous studies had investigated performance management and had considered SMEs in general (considering both small and medium‐sized enterprises as a single category); they revealed that SMEs find difficulties in the use of performance management (e.g., Brown & Heywood, 2005; Chen, 2011; Kiriri, 2005; Soltani, van der Meer, Gennard, & Williams, 2004; Stonehouse & Pemberton, 2002; Wijetunge, 2014; Zheng et al., 2009). However, drawing conclusions on the practice of performance management in medium‐sized enterprises based on the results of these studies has become difficult.…”

Guiding Principles for Successful Enterprise Performance Solution System Implementations

“…Incentives (Chen, 2011) however need to be in place to promote the existence of a transparent and performance driven meritocracy within the enterprise. The first step in enabling that process is by removing the controlling barriers to information and process management, and ultimately change management.…”