Definition of performance management:

The process of motivating employees through setting goals, measuring progress, giving feedback, coaching for improved performance, and rewarding achievements. Performance management (PM) includes activities which ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product of service, as well as many other areas. PM is also known as a process by which organizations align their resources, systems and employees [1] to strategic objectives and priorities. Performance management as referenced on this page in a broad term coined by Dr. Aubrey Daniels in the late 1970s to describe a technology (i.e. science imbedded in applications methods) for managing both behavior and results, two critical elements of what is known as performance.
performance management system includes the following actions .

Developing clear job descriptions and employee performance plans which includes the key result
areas (KRA') and performance indicators.

Selection of right set of people by implementing an appropriate selection process. Negotiating requirements and performance standards for measuring the outcome and overall
productivity against the predefined benchmarks.

Providing continuous coaching and feedback during the period of delivery of performance. Identifying the training and development needs by measuring the outcomes achieved against the set
standards and implementing effective development programs for improvement.

Holding quarterly performance development discussions and evaluating employee performance on

the basis of performance plans.

Designing effective compensation and reward systems for recognizing those employees who excel in
their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks.

Providing promotional/career development support and guidance to the employees. Performing exit interviews for understanding the cause of employee discontentment and thereafter
exit from an organization.

Definition of Performance Management

An effective performance management system aligns individual performance with the organisation's mission, vision and objectives. - American Compensation Association (1996)

Characteristics of an ideal performance management system

Strategic Congruence
The strategic goals of the organisation should be linked to the goals of individuals and teams.

Standardization
If your evaluation criteria and methods are not standardized, you cannot say that you use them to hold your employees to a "standard." The aspects of performance that you measure must be uniform, and you must strive to maintain a constant level of strictness. Varying your level of strictness or your methods will only lead to your employees lacking faith in their managers and in the system itself.

Validity and Conciseness

Performance management systems should only measure what is valid to the tasks at hand. Less is often more when it comes to selecting evaluation criteria. If you are evaluating customer-service representatives in a call center, do not evaluate them on their ability to operate heavy machinery.

Legality
Make sure that you are not evaluating your employees in an illegal manner. Consult an attorney before employing a questionable method of evaluation.

Due Process
As with criminal investigations, if employees receive sub-par evaluations, give them the chance to defend themselves. Make sure that management adequately informed them of expectations, that the company provided them with all necessary resources and that there is no mistake in the evaluation. Even in cases where employees are performing at an unacceptable level, allow for redemption and reform.

Proper Training for Evaluators

No performance management system can succeed when those carrying out evaluations are inadequately trained. Make sure that your evaluators fully understand the responsibilities of those whom they are evaluating. Have them work in that capacity for a short time if necessary. When possible, have those who have proven their ability to work well in that capacity perform the evaluations.

No Bias of Reward
Do not reward evaluators for finding negative or positive results, as this will skew their evaluations in either direction and lead to distrust between your employees.

objectives of performance management

The major objectives of performance management are discussed below:

To enable the employees towards achievement of superior standards of work performance. To help the employees in identifying the knowledge and skills required for performing the job
efficiently as this would drive their focus towards performing the right task in the right way.

Boosting the performance of the employees by encouraging employee empowerment, motivation and
implementation of an effective reward mechanism.

Promoting a two way system of communication between the supervisors and the employees for
clarifying expectations about the roles and accountabilities, communicating the functional and organizational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching.

Identifying the barriers to effective performance and resolving those barriers through constant
monitoring, coaching and development interventions.

Creating a basis for several administrative decisions strategic planning, succession planning,
promotions and performance based payment.

Promoting personal growth and advancement in the career of the employees by helping them in
acquiring the desired knowledge and skills.

Roles in Performance Management

Leaders roles change and they are required to adopt additional roles in the Performance Management Process. some of the roles identified include Champion for change, performance management advocate, and performance coach. Leaders as change champion are entrusted to improve business performance by taking initiative and through identification of key success details for building performance capacity. For the purpose of successfully building capacity of performance management and improvement seven key skills are identified. Firm leaders must: 1. 2. Shape and make employee belief in a vision for performance management and improvement initiatives Take lead in Performance Management and Improvement Initiatives

3. 4. 5. 6. 7.

Mobilize employee and build their engagement and commitment for performance management and improvement Supporting performance management and improvement by modifying initiatives and changing structures. Constantly controlling and monitoring employee progress through performance management initiatives Take the best of Performance management initiative by reinforcing and rewarding employee growth and development Making employee belief that "We are in this together" through Creation of a shared need for performance management and improvement

Challenges in PMS as:

1. Cascading Corporate Goals to individual goals 2. Linking PMs with other existing Corporate Performance MEasurement systems - Balanced scorecard,Policy Deployment Matrix, Annual Business Plan etc 3. Quantifing the targets Measuing them 4. Elimination of duplications in KRAs 5. Minimising the overlaps while maintaining the links between KRAs 6. Ensuring that all responsibilities are allocated and nothing is overallotted/ underallotted 7. Having a monitoring mechanism in place to run it through out the year- instead of making it a seasonal process [usually March-June!] 8. Ensuring participation of Top Management in the process of goal setting, monitoring, measuring 9. Ensuring -both Long Term and short term goals are evenly represented in the scorecard 10. Planning for expected Financial outflow due to this process- vide promotions increments corrections etc 11. Succession planning process to be linked to this 12. Communicating the PMS process to all staff, their appraisers, reviewers and the roles in the process. 13. training the evaluators- appraisers, reviewers 14. methodology to follow for rewarding - normal curver, forced ranking etc 15. having action plans for all groups falling under normal curve 16. Ways to recognise and treat top performers, middle level, bottom level performers. 17. Communicating the results - at various business conditions 18. Counselling the non -top performers 19. managing the compulsory separation of non performers

Role of HR in Performance Management System

In most organisations, senior managers and directors detest conducting performance assessments, usually because they are uncomfortable and inexperienced in conducting them. They will be typically heard saying that appraisals dont work and are a waste of time. A similar approach then cascades down the line and fails the whole system of performance appraisal.

Before we talk about the agenda here today, why not take a look at the traditional approach of HR in appraisals and then shift the discussion towards the new strategic role of HR in managing employees performance. Basically, traditional HR performance appraisal system weighs how well a subordinate satisfies his boss or superior during the appraisal period. This degree of satisfaction may or may not be related to how well the employee contributed to corporate goals. Most of the time, it does not. For this reason, conventional performance appraisal has become a highly politicized, controversial, biased exercise that creates more dissonance than teamwork in the organization. New methods and HRs involvement in Strategic management have now changed the effects where HR appraises people on more relevant output performances like quality, productivity, internal and external customer satisfaction. If negative criteria is used, these become defects or rework, wastes, and internal and external customer complaints or returns. Strategic HR aims to change employee behavior and attitude by directly connecting his appraisal to what actually matters to corporate performance and customer satisfaction. It puts less weight on tenuous criteria like teamwork, attendance, Superiors satisfaction and attitude. In contemporary epoch HR has to play a strategic role to develop capability, attitude and to initiate performance with quality into the product where the HR has to collaborate with line managers to retain employees, which automatically affects the retention of customers because it is the driving force of customers. The goal of performance appraisal is to allow an employee the opportunity to progress to their full potential in order to meet organizational needs and his/her personal development goals. Through this process, true teamwork and maximum performance can be achieved. The foundation of the performance appraisal process is an improved communication between the employee and the supervisor. The Employee Relations/employee care/ Human Capital unit is available to assist managers, supervisors, and employees in utilizing the appraisal process and resolving workplace performance issues. Due to the paradigm shift and the Gen Y joining the workforce the major concern is not the ratings and hike, now employees are more concerned about the feedback and their Individual development plans. The HR department can now share the feedback with people, both negative and positive which not only increases the communication but also builds the trust of the employee in an organisation. HRs role in the Appraisals is not just related to the designing of the system but it has moved to a more substantial role of being a mentor, regulator and to look into the details of why a persons performance is below par. In this new role, HR department also organizes mid term reviews to control the lows and increases the highs with timely checks on a regular basis, in fact it does not remain as a system The evaluation of ones performance can be utilized for TNI &A, and it helps designing the career plan for the employees. Training and development are better where HR plays an important role in PMS also.

Performance Planning
Performance planning is used to provide a structured approach to the attainment of the desired level of performance for both individuals and teams. As a Team Leader you will be required to ensure that Performance Plans are created for your team and its members. You should also ensure that you are involved in developing your own Performance Plan in conjunction with your Manager. Your Performance Plan ensures that you are clear on the levels of leadership and management performance

that are expected of you and helps you to develop new skills as required. Performance planning should occur as: Initial Performance Plan: An Initial Performance Plan A Performance Improvement Plan

An Initial Performance Plan is a detailed plan for either an individual or a team and is used to: Identify the desired performance levels Identify how these performance levels will be achieved Provide guidance and direction Measure progress towards the desired performance levels

Although there are no strict rules as to the format of a Performance Plan they normally contain the following information: Specific goals for development Performance measures Actions required to achieve goals An indication of how long goals will take to achieve

Individual and team Performance Plans should align with the organisation's overall objectives. This can be achieved by aligning the: 1. Performance Plans with the Team Operational Plan 2. Team Operational Plan with the Team Purpose 3. Team Purpose with the organisation's Strategic Plan Performance Plans might include the following types of goals: 1. Key Performance Indicators (KPIs) 2. Goals to improve competency levels 3. Team building goals Whenever the performance levels of an individual or team are found to be below the levels indicated in the Performance Plan then a planning process to improve performance should be undertaken.

Performance Improvement Plan:

Inadequate or poor performance can have a number of negative impacts on individuals and teams. As a Team Leader you may experience decreases in team productivity and cohesiveness and an increase in conflict and dissatisfaction. When a performance deficiency is noted, it should be dealt with as quickly as possible. The following steps outline a process for handling poor performance. 1. Collate the information regarding poor performance This information may be in the form of feedback, customer complaints, error rates, statistics and/or informal observation. 2. Meet with the relevant team member(s) and discuss the issues During this meeting you will need to discuss the deficiency or inappropriate behaviour and identify the causes. Inadequate performance does not always indicate a problem on the part of the individual. Key Performance Indicators (KPIs) may be unrealistic or the resources required to achieve the performance standard may not be available. 3. Develop a Performance Improvement Plan A Performance Improvement Plan provides an outline of what is required by both the individual and their Manager. You may find that your company or organisation has an existing process for implementing Performance Improvement Plans. You should consult with your Human Resources department or your Manager to determine if this is the case. 4. Follow up Ensure that you monitor, follow up and evaluate the performance improvement as set out in the plan. A Performance Improvement Plan should clearly convey: The area of performance that requires improvement or development

The action(s) to be taken Any parties required to assist in the achievement of the set actions The timeframe for achieving each action How performance improvement will be reviewed When performance improvement will be evaluated

Performance Improvement Plans can be implemented when: A formal Performance Appraisal indicates performance improvement is necessary Informal feedback, observations and statistics indicate that performance is not satisfactory You need to evaluate the progress of a new initiative, for example a new system or sales method A plan is required as part of an individual development plan to prepare a team member for promotion or the attainment of a new skill or competency

process of performance planning: