PMCM M1S1 v1.0 250719 PDF

Performance Management & Competency Mapping
Module Introduction to Performance Management
Session No. I
Version 1.0
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PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

Table of Contents
1. Performance Management ................................................................................. 6

2. Performance Appraisal ...................................................................................... 6
3. Processes of Performance Management System ............................................ 7
3.1. Planning Managee Performance and Development ..................................................... 7
3.2. Monitoring Managee Performance and Monitoring Managee Development ................. 8
3.3. Annual Stocktaking ...................................................................................................... 8
3.4. Role of Supervisor ....................................................................................................... 8
4. Components of Managee Performance & Development Plan......................... 9

4.1. Pre-requisites for Effective Performance Management System...................................10
4.1.1. Clarity of Organisational Goals .........................................................................10

4.1.2. Evaluation ........................................................................................................11
4.1.3. Cooperation but Not Control .............................................................................11
4.1.4. Self-management Teams .................................................................................11
4.1.5. Leadership Development..................................................................................11
4.1.6. System of Feedback.........................................................................................11
5. Setting Objectives in Managee Performance and Development .................. 12
5.1. Why set Objectives? ...................................................................................................12
5.2. Objectives of Performance Management ....................................................................13
5.3. Aims of Performance Management .............................................................................13
6. Components of Managee Performance & Development Plan....................... 14

7. Planning Managee Performance & Development .......................................... 14
7.1. Study Outcome of the most Recent Stocktaking .........................................................15
7.2. Review the Managee’s Role Description .....................................................................15
7.3. Establish Performance Standards or the Best Achievement Levels ............................16
7.4. Design Special or Developmental Assignments ..........................................................16
8. Limitations of Performance Management ...................................................... 17

8.1. Time Consuming .........................................................................................................17
8.2. Discouragement..........................................................................................................17

8.3. Inconsistent Message .................................................................................................17
8.4. Biases .........................................................................................................................17
9. Establishing Mutual Expectations .................................................................. 17

9.1. A Purposeful Exercise .................................................................................................18
9.2. Planning Dialogue .......................................................................................................18
9.3. Customizing Plan for the Managee .............................................................................19
9.4. Writing Performance Goals and Standards .................................................................19
10. Role Description ............................................................................................... 19

10.1. Role Description Document .....................................................................................20
10.2. Role Purpose ..........................................................................................................20
10.3. Position in the Organisation .....................................................................................20
10.4. Role Responsibilities ...............................................................................................20
10.5. Role Tasks ..............................................................................................................20
10.6. Performance Indicators ...........................................................................................20
10.7. Decision-making Function .......................................................................................20
10.8. Network of Key-role Relationships ...........................................................................20
10.9. Work Context ..........................................................................................................21
10.10. Academic Levels .....................................................................................................21
10.11. Previous Experience ...............................................................................................21
10.12. Competencies .........................................................................................................21
11. Special Developmental Assignments ............................................................. 21

12. Performance Standards ................................................................................... 21
12.1. Limitations of Performance Standards .....................................................................22
13. Annual Stock Taking ........................................................................................ 23

13.1. Stocktaking Performance ........................................................................................23
13.2. Stocktaking Potential ...............................................................................................23
13.3. Appraising for Recognition and Reward ..................................................................24
14. Performance Feedback .................................................................................... 24

14.1. Types of Appraisal Discussions ...............................................................................25
14.2. Constructive Feedback Characteristics ...................................................................25
14.3. Steps in delivering an Efficient Feedback ................................................................26
14.4. 360 degrees’ Feedback ...........................................................................................27
14.5. Factors comprising the effective feedback process .................................................30
14.5.1. Manager must be empathetic........................................................................30

14.5.2. Eye Contact must be established ..................................................................30
14.5.3. Eagerness to listen .......................................................................................30
15. Importance of Performance Feedback ........................................................... 30
15.1. Benefits to Employees .............................................................................................31
15.2. Benefits to Supervisors............................................................................................31
References ................................................................................................................... 32
Tables & Figures

Table 1.1: Differences between Performance Management & Performance Appraisal ............... 6
Figure 1.2: Pictorial Representation of Performance Management Process ............................... 7
Figure 4.1: The Complete Performance Management Cycle .....................................................10
Figure 6.1: Components of Managee Performance and Development Plan ..............................14
Figure 13.1: Components of Annual Stocktaking.......................................................................23
Figure 14.1: 360 Degrees Feedback Model ..............................................................................27

1. Performance Management
Performance Management is a set of activities to ensure goals are met in a productive and
efficient manner. It thus becomes the process of identifying, measuring, managing, and
developing the performance of the human resources in an organisation along with all the
processes in place. Performance management for business is defined as a "strategic and
integrated approach to increase the effectiveness of companies by improving the performance
of the people who work in them and by developing the capabilities of teams and individual
contributors.” (Armstrong & Baron, 2002)
2. Performance Appraisal
A Performance Appraisal (PA) is a regular review of an employee's job performance and overall
contribution to a company. It is also known as an "annual review," "performance review or
evaluation," or "employee appraisal," a performance appraisal evaluates an employee's skills,
achievements and growth, or lack of it. PA is a systematic, general and periodic process that
assesses an individual employee's job performance and productivity in relation to certain pre-
established criteria and organisational objectives.
Performance Management systems are employed "to manage and align" all of an
organisation's resources in order to achieve the highest possible performance.
Table 1.1: Differences between Performance Management & Performance Appraisal
Performance Management Performance Appraisal
Performance Management is about what an This helps in how the organisation evaluates the
organisation does to help an employee continue progress being made, by assessing or measuring
in their development to become increasingly the employee’s actual performance on a regular
better in their performance for the benefit of the basis over time.
organisation.
An on-going process of directing the employee at An end-point activity of evaluation once the work
work. is over.
Managing and developing employee performance Evaluates the performance and potential of an
to nurture career growth. employee to determine compensation.
It is a process. It is a system.

Flexible and can be updated as and when Fixed system happens only at the time of
required during the performance year. performance review.
Organisations use this as a strategic tool and a Performance Appraisal is used as an organic tool
powerful foundation for employee’s growth. to encourage, empower and develop employees.
Performance management is a proactive,

Performance appraisal is a reactive system.
forward-looking process.
3. Processes of Performance Management System

Performance Management process is a continuous cycle, an ongoing process throughout the
year to include 3 subsystems or components as planning, check-in and review.
Figure 1.2: Pictorial Representation of Performance Management Process
(Rajavelliah, 2013)
Figure 1.2 shows the complete Performance Management Process where the Manager sets the
goals, guides, monitors and reviews his/her subordinates, termed as employee or managee.
Mr. Prem Chadha in his well-written book on the subject ‘Performance Management’ named
and defined the 3 components of Performance Management as:
3.1. Planning Managee Performance and Development

 This is the script of the Performance Management System, the platform or
the stage on which performance will be enacted - much like the foundation.

 This process is the preparation - artistic as well as logistical - for performance

to be enacted.
 To begin the planning process, the manager and the managee review overall
expectations, which include collaborating on the development of performance
objectives. Individual development goals are also updated. Together they
develop a performance plan that directs the managee’s efforts toward
achieving specific results to support organisational excellence and self-
success.
3.2. Monitoring Managee Performance and Monitoring Managee
Development
 Goals and objectives are discussed throughout the year, during check-in
meetings. This provides a framework to ensure managee’s achieve results
through coaching and mutual feedback.
 This subsystem is the play or the performance that the manager conducts,
with its highs and lows, moments of pain and ecstasy, excitement and tension
that the actors cherish the most. It can be said the battleground of PfM, and it
holds the stakeholders interest.
3.3. Annual Stocktaking
 The last and final stage of Performance Management System is the
summation and the critique of the preceding show. The lesson learnt from
this last stage is taken into account for planning the succeeding Performance
Management cycle for the show to go on.
 At the end of the performance period, a manager reviews the managee's
performance against expected objectives, as well as the means used and
behaviours demonstrated in achieving those objectives. Together, they
establish new objectives for the next performance period.
The 3 subsystems follow sequentially; sometimes they overlap each other also.
3.4. Role of Supervisor

All the 3 subsystems of Performance Management go under the supervision of the Supervisor
who:
● Directly manages & supervises
● Oversees the department’s work and provides motivational impetus
● Controls to ensure conformity with standards

● Provides appropriate linkages with other parts of the organisation

The founding stage of Performance management is planning the Managee Performance and
Development and this stage should be taken up after thorough preparation and adequate
assurance of availability of requisite skills, competencies, will and motivation.
4. Components of Managee Performance & Development Plan

Performance Management System is a complex concept that encompasses different
dimensions of the organisation and the people. The mission, the objectives and the goals of the
organisation should be well designed. Performance planning, development and reward systems
enable the managees to realize their true potential in order to contribute for organisational
growth and development.
The managees ‘performance and quality is a function of several prerequisites that managers
need to take care of.
Figure 4.1 shows the complete Performance management cycle which is an important
component in achieving organisational success and a competitive advantage. The performance
management cycle depicts all the stages involved in the process of planning, monitoring,
reviewing, and rewarding employee performance in an organisation.

Figure 4.1: The Complete Performance Management Cycle
(Chadha, 2003)
4.1. Pre-requisites for Effective Performance Management System

The following constitute the prerequisites/characteristics to ensure effective practice of
Performance Management:
4.1.1. Clarity of Organisational Goals

The managers need to clearly and precisely lay down the organisational goals, objectives and
ensure that these are well informed to the managees and other employees and make them to

realize what the organisation expects from them. The organisational goals need to be translated
into individual, team and departmental/ divisional goals.
4.1.2. Evaluation
The individual, team, department/ divisional performance needs to be evaluated on continuous
basis. The organisation should develop an evaluation system and process, which is designed
and developed on scientific lines.
4.1.3. Cooperation but Not Control

the managers should nurture the practice of getting work done through the system of obtaining
managees ‘consensus rather than through control or coercion.
4.1.4. Self-management Teams

The management needs to encourage the individual and teams for self-management of their
performance. This procedure creates in the managees a sense of responsibility and develops a
spirit to work with commitment and evaluate his/her strengths and weaknesses from time to time
and plan for reducing the performance gaps.
4.1.5. Leadership Development

the managers need to identify such of the managees who have leadership potential and apart
from sincerity and honesty to ensure better and effective two-way communication between the
managers and the managees.
4.1.6. System of Feedback

The organisation must have a fool proof feedback system of
managees/individuals/teams/departments performance. It should be monitored continuously
and generate feedback loops for better performance management.
There must be a system that would help to monitor and measure all performance against the set
standards and the managee’s need to be informed of their shortcomings. The evaluation system
should be made transparent so as to repose managee’s faith in the system. The steps in
delivering an efficient feedback
The feedback data is usually fed back in the form of mean, modal ratings against the various
performance dimensions. The data is processed swiftly through computerized software, with a
minimum effort, and can provide graphical as well as numerical presentations to create a 360-
degree feedback profile.

Feedback is usually offered anonymously and is best presented to the managee. Some
organisations present the feedback both to the Supervisor and the managee simultaneously.
Some also prefer to keep the feedback data open, thus allowing the stakeholders to stand up
and take their call.
This has some obvious risks as well as advantages - for its openness and avoidance of cheeky
irresponsible observations, which in turn demands a healthy climate for authentic feedback to
surface.
5. Setting Objectives in Managee Performance and Development

Objectives are needed in every area where performance and results directly and vitally affect
the survival and prosperity of the business. According to Drucker, this criterion of survival and
prosperity is important and will need to be suitably translated in the context of each role
(Drucker, 2006).
An organisation cannot just assume that every office staff will automatically work to fulfill its
goal. All the staff working sincerely and using their best judgment may not eventually end up
achieving goals that the organisation considers important.
5.1. Why set Objectives?

Objectives help to establish a shared framework for measuring performance, with a manager
and her managee having common understanding and expectations about their respective areas
of accountability.
Objectives help to achieve clarity. Unless concrete objectives are set at every level of the
organisation - people will remain confused as to what they are expected to perform individually,
and what others are expected to do, the views may be varied and confusing.
According to Weihrich, clear or shared objectives are set at various levels to help in the goal-
setting of an organisation. The set objectives bring about the organisational improvements as
follows:
 An improved understanding of individual roles
 More effective vertical and horizontal integration of goals
 Basis to build and expect commitment
 More optimal use of individual potential by matching goals with capacities
 Motivation through self-direction and control

 Reduced inter-role conflict

 Well-founded bases for planning and control (Weihrich, 1986)
5.2. Objectives of Performance Management

Performance Management is a key process of HRM that provides basis for developing
individual and business performance. The intention is to improve the performance of individuals
and teams. Performance Management is about finding answers to "What is to be achieved" and
"How it is to be achieved". It helps find better and effective ways to improve business results.
The overall objective of Performance Management is to enhance the capacity and competence
of individuals so that they exceed organisational expectations and work in a way that effectively
and efficiently attains business strategic objectives. Performance Management shall not only
provide for business development but also self-development through organisational support and
guidance of managers and leaders.
5.3. Aims of Performance Management

● Systematically influence supervisee behaviour to produce requisite outputs
mandated by the organisation
Align the objectives of the individual with those of the business
Improve organisational performance through assessment of the current performance
and creating plans for improvement
● Channel creative energies of supervisees in positive and productive activities

Provide adequate resources and basis for personal development
● Making task performance a developmental, more than a controlling experience

Develop a performance culture, where people are focused on objectives, improvement,
development, where performance is properly measured and feedback is timely and
adequate, positive characteristics and behaviors are reinforced and dialogue is a
constant activity focused on development.
● Enabling supervisees to realize their full potential through optimal achievements

Performance Management is about getting a true balance in what is to be delivered and
how it should be delivered, where the how questions must deal with the efficiency and
effectiveness of both the business and individual. Performance Management is not just
top - down process. It is not something done to people but it is for the people.

6. Components of Managee Performance & Development Plan

Figure 6.1: Components of Managee Performance and Development Plan
(Chadha, 2003)
The process of Planning Managee Performance and Development engages manager and her
managees in a dialogue designed to produce a mutual understanding of expectations, in terms
of certain objectives, activities and outcomes which is usually valid for one year. Together they
develop strategies and plans to secure and meet expectations, which in turn helps in
ramifications of managee goals on other managees or units and vice versa.
This entire process equips each managee with:

● An individualized plan of action
● Criteria for what will be measured
● Standards or indices of measurement
● A schedule for reviewing progress against planned performance.
The basic 4 components of Performance Management and Development Plan process as

shown in Figure 6.1 are
 Role description
 Performance Standards or the best achievement
 Special and developmental assignment
 Outcomes of most recent Stocktaking
7. Planning Managee Performance & Development

Planning performance of the managees is what managers plan for their own performance, and
to create memorable performance, preparation is imminent.
The cycle of Performance Management begins at the start of the year, by establishing mutual
expectations and plans for performance and development, with each managee.

The following are the steps taken or looked into by the Performance Manager at the beginning
of the year for the contribution of the ultimate performance output:
7.1. Study Outcome of the most Recent Stocktaking

This outcome contains several information relevant to what goes into future expectations and
plans:
 What the managee actually did during the previous planning period - This
must be used to update managee’s future Role Description so that it reflects the
anticipated scope of the manager’s role.
 Strengths and weaknesses of the managee and her development needs -

This suggests the entire arena of proposed future responsibilities to devised the
required plan for systematic development of the managee.
 To locate the internal systems or procedures helped or hindered the

managee’s performance - Systems or procedures to be improved or developed
afresh to get the most out of the system. Sometimes, a manager may explore
how an organisation can help in the improvement of managee’s performance.
 Helping or hindering forces in the team’s external environment - This helps

to determine what performance expectations are realistic and achievable, but
challenging while planning for the performance management.
 Data for formulating performance indicators - These when taken into account
may lead to some organisation wise standards and benchmarks.
7.2. Review the Managee’s Role Description

For setting down an effective performance management, each managee must have a current
description of the role and position. A role description briefly, but clearly includes the following:
 Role purpose
 The responsibilities and tasks
 Reporting relationships
 Reporting competencies
 Levels of authority and autonomy
 Required skills and competencies

The role description document is fairly stable one, but it requires to be reviewed periodically to
ensure that it is relevant, current and accurate at any given time. Role description acts as a
sound starting point for determining responsibilities and activities in a performance plan.
7.3. Establish Performance Standards or the Best Achievement Levels

Managees are expected to know what is expected of them, by their manager and by their
organisation, along with a clearly-defined and accurate way of assessing the performance
achieved by the managee with the rating of high, medium or low. Performance standards thus
lay down the generic bar of how the responsibilities are measured, in terms of quality of the
output, its quantity, timeliness and the cost.
It is not an easy task for an organisation to establish the performance standards of the
managee. The standards cannot be too static; also they may tend to lose sanctity if they were
reviewed too often. If organisation wise specific standards do not exist, the company is required
to determine alternate ways by which specific responsibilities can be measured to ensure
consistency among similar positions, e.g., all research associates should comply with a certain
norm in the university.
Managers sometimes use the benchmark with the performance actually achieved by a
managee, thus the highest-achieving salesperson sets the goal for a specific year. The standard
may change year wise.
7.4. Design Special or Developmental Assignments

The assignments do not cover the core responsibilities defined in the manager’s role
description, rather these projects or assignments respond to the development of the role to
achieve the expected performance goal. These have two distinct components:
 Systems-oriented Projects which directly relate to expeditious fulfillment of the job, and
not part of day-to-day tasks.
 Individual Occupational or Professional Development Activities - This is intended to

enlarge or enrich competencies, knowledge, skills or attitudes - required for managee’s
present or future positions.
Performance Plans, in general cannot be rigid and static, planning forms a basis for manager’s
efforts, yet the really skilled ones are able to adapt themselves to new obstacles or opportunities
that were not anticipated during initial planning. Performance plans are thus the maps to guide

managers and managees into future, but need individual initiatives for negotiating on-course
changes and roadblocks.
8. Limitations of Performance Management
8.1. Time Consuming

It is recommended that a manager spend about an hour per employee writing performance
appraisals and depending on the number of people being evaluated, it can take hours to write
the department’s PA but also hours meeting with staff to review the PA.
8.2. Discouragement
If the process is not a pleasant experience, it has the potential to discourage staff. The process
needs to be one of encouragement, positive reinforcement and a celebration of a year’s worth of
accomplishments.
It is critical that managers document not only issues that need to be corrected, but also the
positive things an employee does throughout the course of a year, and both should be
discussed during a Performance Assessment
8.3. Inconsistent Message

If a manager does not keep notes and accurate records of employee behavior, they may not be
successful in sending a consistent message to the employee. It is critical to document issues
(both positive and negative) when it is fresh in our minds so the manager is able to review it with
the employee at performance appraisal time.
8.4. Biases
It is difficult to keep biases out of the PA process and it takes a very structured, objective
process and a mature manager to remain unbiased throughout the process.
9. Establishing Mutual Expectations

Mutuality is a common fine thread that runs through the entire Performance Management
process, starting from planning to stock taking.
Mutual expectation-setting and planning makes responsibilities explicit for a specific period of
time - generally a year, and prepares a road map to operationalize these.

Performance Management requires establishing an expectation for each managee’s

performance - known to and accepted by the managee that involves some form of goal or
objective setting.
The following key points are necessary to establish a mutual expectation among the managee,
manager and the whole organisation:
9.1. A Purposeful Exercise

Mutually accepted goal setting, financial budgeting, and objectives are few of the exercises
managers usually set for their managees. These are sometimes called performance agreement
or contract, containing objectives that include:
 Results to be delivered by the managee in terms of objectives, targets and
standards of both quantitative and qualitative performances.
 Performance indicators to list out key areas of performance achievement and
performance measures- to describe the units for measuring achievements in key
areas.
 Profile of essential attributes like competencies and behaviour that the managee
must display to effectively perform her role, and the evidence and measures by
which these will be assessed.
 Core operating principles or organisational values and norms which the managee
must practice and upholds in the duration of her work.
9.2. Planning Dialogue

At the end of the year, as the manager undertakes the stocktaking for each managee, setting
expectations and performance criteria for the successive year flows from preceding year’s
output. This involves an active process, where the manager:
 Talks to the managee about the benefits of goal setting
 Explains the overall expectations and goals
 Describes the self-goal for the coming year
 Invites managee’s suggestion as how his effort would help to set the company as
well as manager’s goal effectively
 Set the criteria for the useful goals of the managee
 May ask the managee to write down the future goals

9.3. Customizing Plan for the Managee

A manager requires to be sensitive empathic and enabling while customizing a specific,
relevant, achievable plan for the managee targeting specific needs, aspirations, fears into
consideration.
9.4. Writing Performance Goals and Standards

A good performance plan has well-written goals. Achievable goals must spell out certain
requisites that provide helpful guidance to the goal-seeker, as given below:
● Person, or the role (manager, managee) has the primary responsibility for
achieving the goal
● Means for achieving the goal
● Measurable indicators
● Completion date
10. Role Description

This is a comprehensive, precise and currently relevant description of a managee’s assigned
role in the organisation, which forms the basis for planning the performance and development of
managees. It is more specific, tailor made description of a managee’s role and thus differs from
the generic job description of an employee.
A Role Description must set out:

● Purpose of the role - what the role holder is expected to achieve and contribute.
It is an essential basis for performance planning and expectation-setting
● Key-performance area of the role - its principal accountabilities that describe
the main deliverables, against which targets and performance standards are
mutually agreed.
● Key job competencies and behaviors - which give details as what the role-
holder must bring to the role and be able to do to fulfill his duties. Key job
competencies correspond to the organisation’s overall core competencies, and
similar to others in the same role-holder position.
The feature of Role Ambiguity implies when the role holder is not adequately clear about the
organisational expectations from her task role.

10.1. Role Description Document

A role description document is a template for detailing position description of a managee. A
detailed Role Description document consist the following:
10.2. Role Purpose
It gives out the overall purpose and objective of the role in the organisation, and its key
responsibilities
10.3. Position in the Organisation

This locates the role in the organisational context, by defining its relationships with all other
roles of the organisations.
10.4. Role Responsibilities

This accounts for overall accountability, obligations, answerability, charge, duty, liability, onus
etc. of the role occupant on respect of the tasks, goals or functions included in the Role
Purpose.
10.5. Role Tasks

Includes specific assignments, projects, jobs, works etc. that are attributed to the role to be
performed, like the daily reporting of the sales to the manager at the end of the day. Some tasks
correspond to the core responsibilities of the role, directly or crucially, and are called the key-
result areas.
10.6. Performance Indicators

These are the achievements, which denote the completion of tasks that are central to the
production achieved in a given time can be a performance indicator, and are applicable for
fulfillment of the role responsibility - especially the key-result areas.
10.7. Decision-making Function

The decision making function of the role is defined by the formally assigned power, charge,
command, control, influence, jurisdiction etc., thus lays down the boundaries of the role. Various
levels of autonomy can be independently taken by the role holder, and required to be consistent
with task responsibilities.
10.8. Network of Key-role Relationships

The critical network of contacts and interactions must be maintained and brought to use for the
accomplishment of the requisite role.

10.9. Work Context

It is described in terms of location of work, extent of outstation travel, job risks of the role etc.
10.10. Academic Levels

These are the required essential and/or preferred educational and/or professional qualifications,
memberships, certificates, licenses, language proficiency etc. for the role competency.
10.11. Previous Experience

This amounts to previous job experience periods and levels at which the joinee has worked in a
similar or relevant position with special achievements and awards etc.
10.12. Competencies
Core skills and essential abilities are listed under this section, and competency is often termed
as a basic, intermediate, or advanced level depending on the nature of the role.
With the active participation of the role incumbent, a Role Description can be best developed,
which is neither too brief nor too lengthy. All the above mentioned components may not be
required for every kind of role description and may change according to the specifics offered by
the organisation. Thus specific doers like drivers, clerks, secretaries may require a briefer role
description whereas more detailed required for managing or specific professional positions.
11. Special Developmental Assignments

Special Developmental Assignments is the second component of the planning of Managee
Performance and Development process. The characteristics are as follows:
● Non-repetitive, one-time, specific short-term projects
● Aims at improving systems, procedures, competencies and other conditions surrounding
the role tasks
● Result in specific time-bound accomplishments
● Are beyond the call of the role description
● Innovative and creative
12. Performance Standards

Every organisation needs performance standards, at the level of individual managees as well as
at the project or functional or programmatic levels because:

In order to set standards, one needs to know the primary outputs of a given role when its goals
and responsibilities are satisfactorily fulfilled, and developed indicators can be seen and
measured.
The four well recognized attributes of any task or role are:

● The quantity of outcome
● Its quality
● The time taken to produce the outcome
● The resources used or the cost incurred to produce it
12.1. Limitations of Performance Standards

Though performance of a managee is not difficult to measure with the available technologies,
knowledge and sophistication, yet there are two basic problem areas that remain unresolved in
quantitative terms:
 Impact of environment in making achievement of targeted performance easy or

difficult
Temperature, air quality, lighting and noise conditions in the office affect the work
concentration and productivity. Numerous studies have consistently demonstrated that
characteristics of the physical office environment can have a significant effect on
behaviour, perceptions and productivity of employees.
Facilitating environments can make goal achievement easy, and hostile environment
does the opposite.
The places where this fickle and variable influence on performance becomes most
critical in the context of PfM:
1. Building performance indicators in a performance plan
2. Monitoring progress in the light of these indicators
3. Taking stock of performance against planned goals and achievements.
 Sustainability of performance standards in a dynamic, fast-changing context

With the changes in the inputs like technologies and problems, the outputs also differs in
the form of solutions and products. An FMCG company may not run the same model of
bar soap for years and years if the targeted consumer’s expectation demands the
introduction of shower gels. Market competition makes current relevance to the
consumer’s call a survival issue.

In the PfM system, the performance standards and indicators should be made part of the
performance plan, thus provides the space to review and update standards every year, and also
allows reviewing the standards if required mid-year. Thus, to ensure consistency in the
performance standard, standards and indicators must be available to managers and managees
in a real time information exchange system.
13. Annual Stock Taking

Figure 13.1: Components of Annual Stocktaking
(Chadha, 2003)
Annual Stock Taking is the third and last broad subsystem of Performance Management
system that follows the other two as:
 Planning Managee Performance and development
 Monitoring Managee Performance and Mentoring Managee Development.
At the end of the year, managers undertake stock taking in various areas of their operations.
The three basic elements of Annual Stock Taking as shown in Figure 13.1 are Stocktaking
Performance, Stocktaking Potential and Appraising for Recognition and Reward.
The details of each elements are discussed below.
13.1. Stocktaking Performance

Stocktaking Performance concerns with the fulfilment and achievement of the performance
plans. From the organisational as well as the managee’s perspective, fulfilment means the
extent to which the targets achieved have meaningfully contributed to the overall business
purpose and have been able to use managee’s potential for achievement.
13.2. Stocktaking Potential

This exercise corresponds to those planned activities, intended to serve managee’s
development. For the organisation, managee development is like enhancing its productive

capacities, and for the managee, it enhances the likelihood of better career prospects within the
organisation.
13.3. Appraising for Recognition and Reward

In the other two components, managee compares herself with her own past achievements, but
this component of appraisal helps the managee to compete with her peers by securing rewards
or recognition.
Factors on which managees are appraised, also inform managers and managees around the
company’s beliefs on:
 What can be expected from the staff
 The value of their means, actions and conducts while fulfilling the expectations
 Its philosophy on what the significant outcomes and qualities of its people etc.
14. Performance Feedback

Performance Feedback is said to be the heart of Performance Management, and feedback
improves the performance of an individual in an organisation.
Athletes use feedback from various kinds of media to improve their performance. In modern
days, a tennis player and his coach may use a tracker implanted in the racket to get swing
speeds while hitting a ball. This information is then used with statistics of accuracy and the
coaches experience in seeing the small details in a swing that affect performance. The ultimate
goal is to improve accuracy and consistency to win more matches.
The feedback definition in management is not very different. The goal of performance feedback
is to improve skills and generate more revenues. When a team member gets feedback on how
his word choices may negatively affect customers with new ideas on how to convey the same
message, he is put in a position to make more customers happy. Ironically, the change will
probably reduce consistent conflict he experiences with customers improving his overall job
satisfaction.
Performance Feedback aims at abolishing the gap between expectations and delivery. The old
adage, "You don't know what you don't know," is resolved where people, here managee learn
what gaps they have and are able to adjust saving time, money and often frustration.
Performance feedback is critical to helping employees understand expectations, make

adjustments and get the coaching necessary to improve and succeed. On the other side of the

equation is, the feedback managers may receive which will help them to lead the organisation
more effectively. A performance feedback session has content and there is a structural
procedure to achieve the end result.
At the time of stocktaking a managee’s performance, five sets of data that are available are
mentioned below:
 Managee’s performance as planned at the beginning of the year
 Managee’s performance plan as modified during the year
 Documented circumstances and logic for modifying managee’s performance plan
 Managee’s actual performance recorded during the year
 Actual overall performance of the managee’s work group during the year
All of these mentioned facts are taken into account while doing the feedback discussion,
appraisal and rewarding processes.
14.1. Types of Appraisal Discussions

Norman RF Maier, an American Experimental Psychologist, discusses three types of appraisal
approaches, in his book ‘The Appraisal Interview’. These approaches as mentioned below help
to meet different objectives in appropriate situations:
 Tell & Sell Type: This is to communicate directly a manager’s opinion/conclusion to the
managee and can be fruitful to confirm a managee’s good performance in the year, and
without making any significant change in the role description.
 Tell & Listen type: This provides an in depth exploration where the data is uncertain,
here the manager provides an opportunity for the managee to speak once the feedback
from the manager gets over. This type may also generate unpleasant feelings for the
managee from negative feedback, yet the end-feelings should be motivational and
possibly lead to constructive attitude towards change.
 Problem Solving type: In this feedback is not directly conveyed to the managee, rather
the latter is given an opportunity to review his/her own performance and to discuss
opportunities or hindrances, frustrations, professional strengths and weaknesses, high
and low points during the performance period.
14.2. Constructive Feedback Characteristics

The characteristics of appraisal Feedback Process are as follows:
 Feedback should be specific rather than general. To be told that one is "dominating" will
not be as useful as being told that, "In the meeting that just took place,

a. you switched topics without asking if there were additional comments,

b. you cut people off mid-sentence, and
c. you interrupted others.”
 It focused on behavior rather than on the person. It is important that we refer to what a
managee does. Thus we might describe a person as having "talked more than anyone
else in this meeting" rather than saying the person is "a loudmouth." The former allows
for the possibility of change; the latter implies a fixed personality trait.
 Feedback in given in order to help, not to hurt any person. Too often people give
feedback to make themselves feel better.
 It should be directed toward behavior which the receiver can do something about. It is
pointless and frustrating to be reminded of a trait over which one has no control.
 Feedback need to be well-timed. Feedback is most useful at the earliest opportunity
after the behavior you want to address has been demonstrated (depending on the
person's readiness to hear it, privacy, time available for discussion, etc.). Feedback
presented at an inappropriate time may do more harm than good.
 Performance feedback must be limited to the amount of information the receiver can use
rather than the amount an appraiser would like to give. It must not overload a person
unnecessarily. Additionally, if an appraiser like to give more information than it can use,
then the appraiser is likely to satisfy some individual need and not try to help the other
person.
 Before the actual feedback process, it must be checked for clarity. The appraisee is
asked to rephrase the feedback received to verify that it corresponds to what the
appraiser had in mind. No matter what the intent, feedback is often perceived as
threatening by people. So, it is sometimes subject to considerable distortion or
misinterpretation.
 Feedback is also to be followed up on at a later date to know how it had been effective in
the performance of the employee.
14.3. Steps in delivering an Efficient Feedback

The feedback data is usually fed back in the form of mean, modal ratings against the various
performance dimensions. The data is processed swiftly through computerized software, with a
minimum effort, and can provide graphical as well as numerical presentations to create a 360-
degree feedback profile. Figure 14.1 describes the model of 360 degrees’ feedback on an

individual’s performance that can be obtained from all the hierarchies related to an individual in
an organisation like managers, peers, direct reports and internal customers.
Feedback is usually offered anonymously and is best presented to the managee. Some
organisations present the feedback both to the Supervisor and the managee simultaneously.
Some also prefer to keep the feedback data open, thus allowing the stakeholders to stand up
and take their call.
This has some obvious risks as well as advantages, such as, openness and avoidance of
cheeky irresponsible observations, which in turn demands a healthy climate for authentic
feedback to surface.
Figure 14.1: 360 Degrees Feedback Model
Manager
Individual Internal
Peers
Customers
Direct
Reports
Author’s Representation
14.4. 360 degrees’ Feedback
To develop an efficient 360 degrees’ feedback, Michael Armstrong, UK’s best-selling author of
Management Books suggests 10 steps as follows:
1. Define Objectives
2. Decide on recipients
3. Decide on who will give the feedback

4. Decide on the dimensions (performance, behaviours or competencies) on which

feedback will be gathered.
5. Decide on the method of gathering feedback
6. Decide on data analysis and presentation (Armstrong & Baron, 2002)
7. Plan initial implementation
8. Analyse outcomes of pilot scheme
9. Plan and gradually implement in full program
10. Monitor and evaluate
The main rationale for 360-degree Feedback has been expressed by Walter W. Tornow as
“360-degree activities are usually based on two key assumptions: (1) that awareness of any
discrepancy between how we see ourselves and how others see us increases self-awareness,
and (2) that enhanced self-awareness is a key to maximum performance as a leader, and thus
becomes a foundation block for management and leadership development programs. (Tornow,
1993)”
London and Beatty have suggested that the justification for 360-degree Feedback is as
follows:
 360-degree feedback can become a powerful organisational intervention to increase
awareness of the importance of aligning leader behaviour, work unit results and
customer expectations, as well as increasing employee participation in leadership
development and work unit effectiveness.
 360-degree feedback recognizes the complexity of management and the value of input
from various sources – it is axiomatic that managers should not be assessing behaviours
they cannot observe, and the leadership behaviours of subordinates may not be known
to their managers.
 360-degree feedback calls attention to important performance dimensions which may
hitherto have been neglected by the organisation. (London & Beatty, 1993)
Performance feedback is a continuous process between an employee and her manager where
information is exchanged concerning the performance expected and the performance exhibited.
Constructive feedback can praise good performance or correct poor performance and should
always be tied to the performance standards.
The 10 steps for an efficient feedback can be elucidated as the following in the following ways:
 Step 1: Getting to the point – Talking business

The purpose for this meeting is………
I asked you here to discuss……...
I want to spend some time discussing how you….
 Step 2: State why are having this conversation – Talk about the problem
I have a concern about……….
A problem has occurred in…….
 Step 3: Describe what you know
I saw……………
When I was told, I looked into the issue by…….
 Step 4: Describe the consequences of the continued behaviour
If this continues, then………….
In looking at this situation as a customer would, it appears………….
 Step 5: Describe how you feel about what you know
I am very concerned about ………
I do not think it is right that…….
I am upset that errors in the function keep occurring…….
 Step 6: Encourage the other party to give their side of the story
Now, that’s what I know but what is your view……
Is that the way you saw it?
Ok, now what is your reaction?
 Step 7: Ask as many questions as you need to understand the situation from the
other person’s perspective
Well, how do you know that…………?
And then what happened?

If you did that, then why did…………
 Step 8: Decide what specific actions must be taken, when and communicate that
to the other party
I believe you must…
In the next meeting, as point 4 in the agenda, you will…
 Step 9: Summarize the conversation I believe you must …

Let’s recap, you will……….and I will………
 Step 10: Follow Up
I will contact you next………….
14.5. Factors comprising the effective feedback process

The most critical part of the effective feedback process is how it is being conducted. The factors
included in the effective feedback process are as follows:
14.5.1. Manager must be empathetic
To empathize with managee’s feelings and to communicate without making her feel
embarrassed or steering away any kind of inhibitions.
14.5.2. Eye Contact must be established

The old saying “eyes are a reflection of your inner self” holds true in the feedback session. Our
eyes also reflect our sincerity, integrity and comfort when communicating with another person.
So, having good eye contact while conversing is the indication that the communication has gone
well. Eye contact is made to develop trust, confidence between a manager and a managee.
Keeping eye contact with the person you are talking to indicates interest and saying to the
person “You are important and I am listening.”
14.5.3. Eagerness to listen

To understand managee’s viewpoint, feelings and attitudes towards his work and performance
15. Importance of Performance Feedback

Performance Feedback or Annual Stocktaking is not just about filling up forms; it is a structured
process with one-to-one interview, keen listening and giving importance to both the parties
involved in the process. Delayed feedback is considered as no-feedback, and an appraisee rely

on the annual feedback to know better about his yearlong performance, there always remain a
way for improvement. A raise given to an employee is not equivalent to the annual feedback
given at the time of performance appraisal, so it must be given its own importance. An appraiser
must also get the feedback as how the feedback session went with the appraisee.
The process of Performance Feedback is important to both the employees and supervisors in
several ways and are mentioned as follows:
15.1. Benefits to Employees
 A clear understanding of expectations
 An opportunity to receive ongoing coaching and feedback
 The creation of an action plan to develop skills that are required to perform successfully
in a current role or to prepare for future opportunities
 The receipt of a documented overview of performance
15.2. Benefits to Supervisors

 The establishment of clear, measurable expectations
 Timely feedback on how effectively employees are applying job knowledge and skills to
achieve the goals established for their positions
 Identification of performance issues and the ability to set a clear course for correcting or
improving them
 Help in getting feedback, resources and training to meet performance goals

References
Armstrong, M. & Baron, A., 2002. Performance Management: the New Realities. 1 ed.
Washington: Chartered Institute of Personnel and Development.
Chadha, P., 2003. Performance management: it's about performing not just appraising. 1st ed.
Delhi: Macmillan India.
Drucker, P. F., 2006. The Practice of Management. 1st ed. Washington: Collins.
London, M. & Beatty, R. W., 1993. 360‐degree feedback as a competitive advantage. Human
Resource Management -Special Issue on 360‐Degree Feedback, - Summer ‐ Autumn (Fall), pp.
353-372.
Rajavelliah, U., 2013. Different types of performance appraisal system: Synergita Blog. [Online]
Available at: https://blog.synergita.com/2013/09/different-types-of-performance-appraisal-
system/
[Accessed 29 July 2019].
Tornow, W. W., 1993. Perceptions or reality: Is multi‐perspective measurement a means or an
end?. Human Resource Management- Special Issue on 360‐Degree Feedback, - Summer ‐
Autumn (Fall), pp. 221-229.
Weihrich, H., 1986. Management Excellence: Productivity through MBO. 1st ed. London:
McGraw-Hill.

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Performance Management & Competency Mapping

Module Introduction to Performance Management

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

1. Performance Management ................................................................................. 6

3.2. Monitoring Managee Performance and Monitoring Managee Development ................. 8

3.3. Annual Stocktaking ...................................................................................................... 8

3.4. Role of Supervisor ....................................................................................................... 8

4. Components of Managee Performance & Development Plan......................... 9

4.1.1. Clarity of Organisational Goals .........................................................................10

5.2. Objectives of Performance Management ....................................................................13

5.3. Aims of Performance Management .............................................................................13

6. Components of Managee Performance & Development Plan....................... 14

7.2. Review the Managee’s Role Description .....................................................................15

7.3. Establish Performance Standards or the Best Achievement Levels ............................16

7.4. Design Special or Developmental Assignments ..........................................................16

8. Limitations of Performance Management ...................................................... 17

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

8.3. Inconsistent Message .................................................................................................17

8.4. Biases .........................................................................................................................17

9. Establishing Mutual Expectations .................................................................. 17

9.2. Planning Dialogue .......................................................................................................18

9.3. Customizing Plan for the Managee .............................................................................19

9.4. Writing Performance Goals and Standards .................................................................19

10. Role Description ............................................................................................... 19

10.2. Role Purpose ..........................................................................................................20

10.3. Position in the Organisation .....................................................................................20

10.4. Role Responsibilities ...............................................................................................20

10.5. Role Tasks ..............................................................................................................20

10.6. Performance Indicators ...........................................................................................20

10.7. Decision-making Function .......................................................................................20

10.8. Network of Key-role Relationships ...........................................................................20

10.9. Work Context ..........................................................................................................21

10.10. Academic Levels .....................................................................................................21

10.11. Previous Experience ...............................................................................................21

10.12. Competencies .........................................................................................................21

11. Special Developmental Assignments ............................................................. 21

13. Annual Stock Taking ........................................................................................ 23

13.2. Stocktaking Potential ...............................................................................................23

13.3. Appraising for Recognition and Reward ..................................................................24

14. Performance Feedback .................................................................................... 24

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

14.1. Types of Appraisal Discussions ...............................................................................25

14.2. Constructive Feedback Characteristics ...................................................................25

14.3. Steps in delivering an Efficient Feedback ................................................................26

14.4. 360 degrees’ Feedback ...........................................................................................27

14.5. Factors comprising the effective feedback process .................................................30

14.5.1. Manager must be empathetic........................................................................30

15.2. Benefits to Supervisors............................................................................................31

Tables & Figures

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

Table 1.1: Differences between Performance Management & Performance Appraisal

Performance Management Performance Appraisal

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

Performance management is a proactive,

3. Processes of Performance Management System

Figure 1.2: Pictorial Representation of Performance Management Process

3.1. Planning Managee Performance and Development

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

 This process is the preparation - artistic as well as logistical - for performance

3.4. Role of Supervisor

PMCM/M1SI/v1.0/250719 Introduction to Performance Management | Session No.: I

● Provides appropriate linkages with other parts of the organisation

4. Components of Managee Performance & Development Plan