Synthesis

With the operational environment becoming ever more competitive, and against the backdrop of austerity in resource management, the importance of performance-based management (PBM) cannot be overemphasised. Indeed, PBM has increasingly become a common practice in organisations of different sizes -- small and large -- and in diverse sectors -- manufacturing and service, as well as public and private sectors (Ploom & Haldma, 2013; Lutwama, Roos & Dolamo, 2013; Rivenbank, Fasiello & Adamo, 2016; Wierzbinski, 2016). Organisations now rely on performance data to make decisions relating to various organisational processes, including strategic planning, internal management, resource allocation, reporting, as well as monitoring and evaluation.

Defining PBM can be quite problematic, with the term being often confused with performance measurement (Rivenbank, Fasiello & Adamo, 2016). In addition, performance management is often thought to involve only personnel management processes such as employee performance appraisal (Turk, 2016). Furthermore, contention exists over whether it should be considered an art or a science, or whether or not it is a discipline on its own (Brudan, 2010). Also referred to as results or outcome-based management, performance management is an umbrella term which includes a number of ongoing organisational processes: setting and clarifying objectives, establishing performance indicators, gathering and analysing data, reporting outcomes, and learning from the outcomes (Woerrlein & Scheck, 2016). This means that performance measurement is an element of PBM. Brudan (2010) describes performance measurement as a sub-process of PBM, which focuses on identifying, monitoring, and communicating performance outcomes, and taking action based on those outcomes. PBM processes are ultimately aimed at driving performance. Based on management control theory, PBM is about evaluating outcomes with the aim of creating value for the end consumer and other important stakeholders (Pihl-Thingvad, 2017).

PBM processes relate to not only individuals or employees, but also organisational processes (Brudan, 2010). Indeed, performance-based management means that all organisational processes, internally and externally, are pegged on performance or results -- from personnel management to supply chain management. Selviaridis & Wynstram (2015), for instance, demonstrate the relevance of PBM in supplier management. PBM determines aspects such as supplier... For instance, Rolls Royce, a manufacturer of aircraft components, is paid for providing maintenance services on the basis of engine availability in flight hours as opposed to labour and spare part cost. In the service context, logistics providers are increasingly being paid based on the performance of the client's supply chain. In essence, PBM is about outcomes. The organisation first determines the outcomes it desires to achieve and then determines the means for achieving those outcomes. This is unlike the conventional approach, wherein means lead to outcomes.
A major focus of PBM research relates to the impact of PBM on employee and organisational outcomes. Focusing on higher education institutions, Turk (2016) demonstrates that performance management is important for improving staff performance, especially during organisational change. It achieves this by aligning performance management processes with the organisation's strategic goals and objectives, laying the foundation for quality improvement, and creating a learning organisational atmosphere. Panda & Pradhan's (2016) study further reports a positive association between PBM and job satisfaction. However, as evident in four case studies of job centres in Denmark, PBM may not have positive impacts on employee outcomes, especially in terms of perceptions of shared goals, autonomy, accountability, and communication (Pihl-Thingvad, 2017). This occurs when the implementation process diverts from results to process objectives.

Whereas PBM may have an impact on employee outcomes, it is imperative to note that PBM is not limited to employee performance as depicted by Turk (2016) -- it is an organisation-wide process, meaning processes and activities are also important aspects. Brudan (2010) as well as Ploom & Haldma (2013) amplify this assertion, arguing that PBM has three dimensions: individual (improving employee performance); operational (improving efficiency and effectiveness at the department or functional level); and strategic (achievement of the organisation's overall goals and objectives).

Being an organisation-wide process, PBM may positively influence organisational outcomes. It may enhance both financial and non-financial performance (Wierzbinski, 2016; Panda & Pradhan, 2016). Indeed, by positively influencing employee outcomes, PBM can enhance organisational productivity and performance as satisfied employees are…