**1. Introduction**

Managing organisational performance has been a problematic area for Human Resource Management (HRM) professionals. This is partly because the discipline has depended on traditional measurement methods as part of managerial control [1]. Although appraisals have been used to measure role or on-the job and financial performance [2] as well as overall employee satisfaction [3], the organisational performance problem appears to have fallen into a state of crisis [4]. This chapter defines organisational performance as the sum total of the tasks that managers and staff complete in order to help an organisation achieve its operational and/or strategic goals/objectives. Despite such significance, greater emphasis of performance management appears to have been focused on larger firms [5]. This neglect has been partly due to environmental change to which organisations have to constantly adapt to [6]. The frequency of change has challenged managers' competence to implement effective performance management and, by extension, employment relations practices [7]. Therefore, performance management issues within the changing organisational context in which SMEs operate could not be timelier [8].

It is envisaged that addressing organisational performance will help to identify innovative ways via which HR professionals can more effectively deal with the problem ([9]; Miller et al. [10]. Emerging literature is suggesting that financial constraints be attributed to SMEs' organisational performance problem [11]. Other scholars such as [12]) have identified the way knowledge is created and managed as an additional constraint on performance whereas Castagna et al. [13] has specifically highlighted customer management as a major challenge to the way HR professionals manage performance. The emerging debates are therefore suggesting that management competence ought to be addressed if employees' commitment to improving organisational performance is to be enhanced [14] in dealing with overall organisational performance. It is also highlighted in the emerging literature that the traditional methods of measuring, monitoring and evaluating performance through performance indicators are shifting towards innovation capability [15] whereby resource [16] and risk management become critical [17, 18]. Other researchers are even proposing network relationship management [19] whereas other scholars have highlighted the importance of managing the emblematic organisational culture in order to improve performance capability [24]. Despite the plethora of suggestions and propositions, it is still not known whether these management practices will facilitate a more sustainable performance management that will not only minimise SMEs' performance problems but also increase their resilience in the longer term [21, 22]. Therefore, the question that this chapter seeks to address is 'can a model be developed for SMEs which will help its managers become more competent in addressing the organisational performance problem in a way that enhances their resilience?'

Immediately after the introduction, this chapter examines the foundation on which performance management is based by critiquing the role of management in High-Performance Work Systems and High-Performance Organisation models. An examination of the research methods is followed by the study's empirical findings, which are then used to develop a new 'Strategic Workforce Resilience Management Model'. This model is designed to help managers become more competent in addressing the performance problem of SMEs in a changing environment.

The model also highlights the chapter's contributions to the literature on performance in four areas, namely on how to fill the firm-level performance gap, how to develop management's competence, how HRM professionals can become more innovative and effective in addressing performance problems and how to become individually and collectively resilient in a new theoretical development referred to as 'Strategic Workforce Resilience Capability'. The implications of the chapter's findings and the model are considered, the conclusions and areas for future HRM studies are considered.

#### **2. Performance management theory**

Two seminal models on the issues impacting on organisational performance, as highlighted in the introduction, are examined and critiqued in greater detail in this section. They are High Performance Organisation (HPO) and High-Performance Work Systems (HPWS). Proponents of HPO such as and Holbeche [23] identified teamwork and planning in their efforts to help management gain greater control

#### *Beyond HRM's Performance Management: Towards Strategic Workforce Resilience DOI: http://dx.doi.org/10.5772/intechopen.96703*

of the performance problem [24]. However, the model does not specify what type of knowledge would be needed [12] or whether its implementation will help SMEs to minimise their performance risks [17] or the extent to which they are able to deal with their financial constraints [11]. Although the model adopts an antihierarchical approach and looks promising, it does not tell us whether the organisation of tasks into team-based activities will be beneficial to the way SMEs address their customer-related performance problems [13]. It is also far-fetched to intimate that team-working is the panacea to all organisations' performance problem given that some firms like SMEs do not have enough human resources to implement team activities as noted by Lin and Lin [19]. Likewise, the planning required takes time and this is an added drain on smaller firms that are already resource constrained. There is an additional difficulty here in the sense that solving a fundamental management competence and their ability to intervene as suggested by Reinhardt et al. [25] does not necessarily resolve a wider staff performance commitment issue [14]. This is partly because both staff groups could have different perspectives, preferences and objectives from management's team and network orientations proposed by HPO enthusiasts. Secondly, Katzenbach and Smith [26] highlighted value creation as part of the management planning process so as to make organisations more financially viable [11]. However, this proposition has not addressed the core human resource issues related to what staff regard as valuable, meaningful and sustainable organisational performance practices [21, 27]. In addition, creating reward systems for staff as suggested by may help in partially alleviating keeping staff financially satisfied but this measure has also prompted critique that it overlooks a wider and more crucial staff development and knowledge management issue [28, 29].

The disagreements within HPO scholars has amplified the performance problem and has led others to suggest that not knowing which of the HPO characteristics to use has even caused an organisational performance crisis [8]. This has also led to a wider organisational viability predicament [10, 21]. Within such a state of affairs, management and staff groups are left divided on which strategy to focus on [5] and which resolutions will be effective [30, 31] in the sustainable future [27].

The second seminal model on performance is High-Performance Work Systems. It identifies HRM practices such as appraisals as pivotal in boosting organisational and financial productivity [11]. Its earlier proponents such as Dyer [32] and Pfeffer [33] and recent additions by Messersmith et al. [34] uphold that performance management should be treated as a 'black box' and overall system problem. This means that both managers and staff should view performance as a coordinated set of system-wide organisational activities, whose implementation will help address an organisation to tackle the root causes of performance. Earlier scholars such as Vakola et al. [35] and Schuler and Jackson [36] and recent researchers such as Shin and Konrad [37] believe that there is causality between HPWS and organisational performance boost. HPWS scholars also propound a linkage between the internal application of performance enhancement measurements [20, 15, 16] and the external development of network and knowledge management relations [13, 19]. This involves the implementation of not only appropriate teamwork, planning, appraisal and reward structures but also tailoring the structures in such a way that they modify managerial and staff behaviours and an overall culture of performance [24]. Similar to HPO proponents, HPWS advocates such as Schuler and Jackson [36] and more recently, Murthy and Naidu [38] and Kaur et al. [39], also believe in using value-creation mechanisms to increase performance and minimise waste. Therefore proponents of both models believe that the adoption of flatter structures such as teamwork and incentivisation schemes could encourage staff commitment and buy-in and, as such, less resistance to the performance measures [40]. Yet, the extent of how effective the implementation of these measures are in dealing with

performance issue is yet to be finalised. Therefore, based on the examined HPO and HPWS models, there is a fundamental organisational performance gap problem, which has led Higgs and Dulewicz [8], Van de Ven and Jing [41] and recently Miller et al. [10] to refer the situation we are currently in as 'a crisis'. Other scholars have also opined the unsustainability of the management practices used [21, 27]. In order to see whether other literature could help resolve this research problem, the chapter examines Resilience Theory next.
