Sustainability: the missing element in performance management

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.