Relationship between performance management principles and firm performance: A survey of companies quoted in the Nairobi stock exchange

Abstract

The concept of Performance Management is one of the most recent developments in the sphere ofHuman Resource Management (HRM). Many companies now make use of this concept since it has proved to be a strategic and integrated process that delivers sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of individual contributors and teams. Performance Management is used in all kinds of companies: hospitals, industries, universities, transport, government and commercial enterprises. Despite all these, very little is known about Performance Management in the Kenyan situation. The contemporary workplace in Kenya offers many challenges yet no studies have been done to find out if indeed any of the firms is using performance management or even if performance management is delivering its intended benefits to those who use it. This study sought to determine the extent to which executives in companies quoted in the Nairobi Stock Exchange have implemented the Performance Management and also to assess the relationship between the extent of application and organisational performance. The study was carried out using structured questionnaires; the target respondents were Human Resource Managers.The response rate to the questionnaire was 60%. The data was analysed using both descriptive and inferential statistical analyses. The findings were: 1. There is a high level of awareness and application of the Performance Management concept. 2. Performance Management improves employee performance and a high level of its application improves organisational performance.