In context, human resource management involves human resource planning, design of jobs and work systems, and utilizes policies on employee separation, laws regulating employment and information systems to facilitate its implementation where necessary.
From the above, we can firmly conclude that a performance management system is an area of human resource management, which can serve multiple purposes. Mello (2002 p. 298 - 300) described at least five purposes. First, he says that performance management systems are to facilitate employee development. Through an assessment of the deficiencies in employee performances, the employee can be made to benefit from training programmes specifically designed to meet these needs. For example, the performance management system must be equipped to provide performance feedback - an indication of employees" acceptance of the system and its consequent utilization to provide meaningful information on employee needs.
This emphasizes the impact of performance management on the area of training. Training as an area of human resource management needs to be cognizant of the training and development needs of the organization so that human development can be propelled in the right direction. The reciprocal relationship between these two areas of human resource management suggests a sort of symbiosis that is needed to achieve the desired outcomes from both perspectives.
The second purpose of the performance management systems according to Mello is to determine appropriate rewards and compensation. This link with compensation is best achieved when the most appropriate schemes of performance ratings are achieved. In instances where the intention is to evaluate employees" contribution and output, such performance is what that will dictate pay levels and compensation. This aspect of human resource management that is responsible for compensation should be equally interested in the outcomes of performance management so that the most appropriate incentive schemes are implemented.