Sustainability: the missing element in performance management

Abstract

Purpose

The performance management process has typically focussed on the achievement of short-term financial goals and ignored longer-term broader goals such human, social and environmental goals. In an attempt to overcome this limitation, the purpose of this paper is to explore the benefits of a broader approach to performance management that offers a balance of organizational financial goals with positive human and social outcomes. Specifically, the paper reviews the adoption of a sustainable human resources (HR) approach to performance management.

Design/methodology/approach

This conceptual study considers the effect of the firm ' s short-term financial focus on the multinational corporation ' s (MNC ' s) performance management process.

Findings

The study finds a performance management process with a short-term financial ultimately ignores the developmental needs of the employee.

Research limitations/implications

In future studies that include empirical data and in particular longitudinal data should be considered so as to examine changes to employee performance management behaviors due to the implementation of a sustainable approach to performance management.

Social implications

The study shows that the adoption of a sustainable HR approach to performance management incorporates a balance of organizational financial goals with positive human and social outcome, both of which are necessary to achieve and sustain superior long-term organizational performance.

Originality/value

The study suggests that when a MNC uses a sustainable HR approach, the performance management process is highly likely to make a stronger contribution to MNC effectiveness. The outcome is a balance between organizational financial outcomes and provision for employees. Performance managing people in organizations in a sustainable way, could prove to be strong source of competitive advantage. Hence, this study makes a central contribution to HR scholarship.

Citation

Maley, J. (2014), "Sustainability: the missing element in performance management", Asia-Pacific Journal of Business Administration, Vol. 6 No. 3, pp. 190-205. https://doi.org/10.1108/APJBA-03-2014-0040