PERFORMANCE MANAGEMENT-What, Why & How?

When we talk about the five dimensions of Human Resource Management (HRM), we list down the following, namely, Performance Management, Career Management, Recruitment & Selection, Training & Development, and Compensation & Benefits Management. These five dimensions, though equally important, often fail to secure equal attention from Human Resource (HR) managers. The facts that performance management is not just an annual performance appraisal and training is not the only solution to effective performance are forgotten by the HR managers and the management team. As a result, successful organizations, happy with their existing success status, are actually deprived of a potential growth that could have been achieved should they have invested more attention to performance management than only performance appraisal. For instance, the total HR performance of your company is worth $10, which means your employees performance is resulting revenue worth $10. Among this set of employees, some are excellent performers, some are good, some moderate and some poor. This difference in performance level are due to the fact that some are using 100% of their potentials, some working below their full potentials and some working at zero or marginal potentials. The challenge of equalizing the difference in performance level lies in an objective performance management system. Prior to explaining what performance management is, it is important to know what performance management is not, which will help you gain an insight that what your managers have assumed to be performance management may be just an annual performance appraisal confined to an hours meeting with a performance appraisal form to be filled up and signed by the employee and his supervisor. What Performance Management Is Not: its not just an annual performance appraisal its not imposing targets/goals on an employee by his supervisor its not only evaluating individual job performance

What is Performance Management:

its Management By Objectives (MBO) its about setting SMARTER goals

its about planning to perform its about periodically reviewing progress in performance its about evaluating performance for further improvement its about delivering reinforcement for performance success and performance failure

 What is the Performance Management Process/Cycle: The Performance Management Process begin and ends in the same cycle of events which are as follows: Individual goal setting Performance planning Mid year performance review Annual performance appraisal

Under individual goal setting, the supervisor and the employee will sit together to set annual goals at the year end; the goals are to be achieved by the employee at designated quarters of the following year. Under performance planning, the supervisor and the employee, during the same goal setting session, will plan on how to perform in order to achieve the goals most effectively and efficiently. In the middle of the following year, the supervisor will review the employees progress and achievements, advise and coach for better performance, give recognition and appreciate for achievements so far and make changes in the performance plan, if required; the progress of employee shall tell the supervisor whether or not the all preset goals can be achieved in the given year. At the year end, the supervisor and the employee will sit together to appraise the employees performance in the given year and the feedbacks will all be fed into setting new goals and action plans for the following year. You may find the performance management process pretty easy, however, implementing each phase of it requires an understanding of how individual performance of all employees can translate into total organizational performance. As regard to this, managers need to ask themselves the following questions:
WHAT TO ASK What does the company want to achieve in the long run? What business does the company has to be in to achieve its vision? What will be the strategy to sustain in that business? What are the functional objectives supporting the strategy? WHAT TO DO Gain insight into the corporate vision Gain insight into the corporate mission Formulate corporate strategy Set functional objectives

Operation of the Performance Management Process:

Individual Goal Setting & Performance Planning host a goal setting session between the supervisor and the employee list down the major goals to be achieved in a year in line with functional objectives review goals to assess the feasibility of their accomplishments; make sure the goals are SMARTER- Specific, Measurable, Actionable, Realistic, Time-framed, Extended & Rewarding finalize goals for a year plan on ways to achieve the goals identify the possible barriers to achieving them plan on ways to overcome those barriers

Mid Year Performance Review host a performance review session between the supervisor and the employee discuss on performance progress status and seek accountability for missing deadlines on goals revise performance plan (if needed) with new deadlines for goals

Performance Appraisal host a performance appraisal session between the supervisor and the employee measure performance as against preset goals measure competencies as against required competencies set for current role measure potentials as against required competencies set for future role chalk out Individual Development Plan outlining to fill skill gap, motivation & aspiration gap and communication & cooperation gap chalk out Reinforcement plan to reward/recognize for success and punish for deliberate failure

The beauty of this Performance Management process is that it has three dimensions only, which give three major outputs that can be fed into other four dimensions of

HRM and not to mention Performance Management also. The beauty is illustrated as follows:
Performance Assessment Performance Evaluation Competency Evaluation Potential Evaluation Performance Measures Preset Goals Required competencies of current role Required competencies of future role

Rating Scale 5-points 5-points 5-points

Outputs New goal setting Development Plan Career Development Plan

Those are the underlying standards that can be used by managers to develop/customize existing Performance Management tools and put them in practice. ___________________