Performance

Management

Module 1

8 hrs
Introduction: Definition of Performance
Management, the Performance Management
Contribution, Dangers of Poorly Implemented
PM Systems, Aims and Role of PM Systems,
Characteristics of An Ideal PM Systems,
Performance Management Process,
Performance Management and Strategic
Planning.

Introduction: Definition of
Performance Management
Performance Management is a continuous

process of identifying , measuring and

developing the performance of individuals and
teams and aligning performance with the
strategic goals of the organization.
Tow main components :
Continuous process
Alignment with strategic goals

Performance
Performance refers to outcomes, results or

accomplishments
Rothwell, 2005

Components of
Performance
Four components of performance
A performer
Behaviour
Situation
Results
Morhman et al ,1989

Performance
management
A system that involves employee evaluations
once a year without an ongoing effort to
provide feedback and coaching so that
performance can be improved is not a true
performance management system.
Aguinis, 2005

Performance Appraisal
Performance appraisal is the systematic

description of an employees strengths and

weaknesses.
Aguinis, 2005

Difference between performance management system and performance appraisal

Performance appraisal means evaluating an

employees current and/or past performance

relative to his or her performance standards

Performance management - process

through which companies insure that

employees are working toward organizational
goals
includes practices through which the manager
defines the employees goals and work,
develops the employees capabilities, and
evaluates and rewards the persons efforts

Meaning
Performance Appraisal is a method of

evaluating the behavior of employees in the

work place.

It is the identification,
measurement and
management of human
performance in
organizations.

Illustration
Merrill Lynch
this is what is expected of you, this is how

were going to help you in your development ,

and this is how you will be judged relative to
compensation.

Illustration
Seimens- PMS based on three pillars
Setting clear and measurable goals
Implementing concrete actions
Imposing rigorous consequences.

Performance Management
Contribution
Motivation to performance is increased
Self- esteem is increased
Managers gain insight about subordinates
The definition of job and criteria are clarified
Self insight and development are enhanced
Administrative actions are more fair and appropriate
Organizational goals are made clear
Employees become more competent
Better and timely differentiation between good and

poor performers

Protection from lawsuits

Clear communication on performance

expectations
Organizational change is facilitated
motivation

Dangers of Poorly Implemented PM

Systems
Increased turnover
Use of misleading information
Lowered self esteem
Wasted time and money
Damaged relationships
Decreased motivation to perform
Employee turnover and job dissatisfaction
Increased risk of litigation
Unjustified demands on managers and employees

resources
Varying and unfair standards and rating
Unclear rating system

Aims and Role of PM

Systems
Strategic purpose
Administrative purpose
Information purpose
Development purpose Organizational

maintainance purpose
Documentation purpose

Definition of reward
systems
A reward system is a set of mechanisms for

distributing both tangible and intangible returns as

part of an employment relationship.
Base pay
Cost of living adjustments and contingency pay
Short term incentives
Long term incentives
Income protection
Allowances
Relational returns

Characteristics of An Ideal PM
Systems
Strategic congruence
Thoroughness
Practicality
Meaningfulness
Specificity
Identification of effective and ineffective

performance
Reliability
Validity
Acceptability and fairness

Inclusiveness
Openness
Correctability
Standardization
Ehicality

Integration with other

human resources and
development
activities

Pre requisites

Performance Management Process

Pre requisites
Performance planning
Results
Behaviors
Development plan

Performance
Performance
Performance
Performance

Execution
Assessment
review
renewal and recontracting

Pre requisites

Knowledge of the organizations mission and

strategic goals
Knowledge of the job in question
Job analysis to be conducted
Observation
Off the shelf questionnaire
Interviews

Frequency

Criticality

0: not performed

0: not critical

1: every few months to yearly

1:low level of criticality

2:every few weeks to monthly

2:Below average level of

criticality

3:Every few days to weekly

3: Average level of criticality

4: Every few hours to daily

4: Above Average level of

criticality

5: hourly to many times each

hour

5: Extremely critical

Performance planning
Results
Key accountability
Specific objectives
Performance standards- which provides

information of acceptable and unacceptable

performance ( quality , quantity , cost and
time)

Performance planning
BEHAVIOUR
Discussing competencies
Relating these competencies to KSAs.

Performance planning
Development plan
Includes both result and behavior
followed by next step

Performance Execution
Following factors must be present :
1. Commitment and goal achievement
2. Ongoing performance feedback and

coaching
3. Communication with supervisor
4. Collecting and sharing performance data
5. Preparing for performance review

Supervisors have many primary

responsibilities
6. Observation and documentation.
7. Updates
8.Feedback
9.Resources
10.Reinforcement

Performance Execution stage: Areas for which

managers have primary responsibility
EMPLOYEES

MANAGERS

Commitment to goal achievement Observation and documentation

Ongoing performance feedback
and coaching

Updates

Communication with supervisor

Feedback

Collecting and sharing

performance data

Resources

Preparing for performance

reviews

Reinforcement

Performance Assessment
Both employee and the manager take

ownership of the assessment process.

Performance review
The Achilles heel of the entire process.

Six recommendations for

performing reviews
Identify specific positive and negative

behavior
Solicit feedback
Discuss the implication of changing or not
changing
Explain about skills
Agree on action plan
Set up a meeting to follow up

Performance renewal and

recontracting:
Final phase
Uses insights from other phases

Performance Management and

Strategic Planning