Learning Outcomes:

1. Identify and explain the process of performance management.

2. Distinguish between purposes for performance management.

3. Determine the responsibilities of individual and manager in performance management.

Definition:

Armstrong & Murlis (1994):

“A process or set of processes for establishing shared understanding about what is to be

achieved, and of managing and developing people in a way, which increases the
probability that it will be achieved in the short and longer term.”

Lockett, in R. Harrison (1997):

“A continuous process in which ‘organisations clarify the level of performance required

to meet their strategic objectives, convert them into unit and individual objectives and
manage them continually…(so) that they remain relevant and consistent with overall
strategic objectives”.

OVERALL AIM OF PERFORMANCE MANAGEMENT

To establish a culture in which managers, individuals and groups are responsible for the
continuous improvement of business processes and of their own skills, competencies and
contributions.

To achieve sustainable improvements in the organisation’s performance

To develop abilities

To reward people

FRAMEWORK FOR A PM PROCESS:

PM process consists of the following activities:
 Preparation of mission and value statements linked to business strategy;
 Definition of corporate and functional or departmental objectives;
 Agreement between manager and individual employee on accountabilities, tasks,
objectives, competences and performance measures which are captured in the
performance agreement or contract;
 Agreement of work plans and personal development and performance improvement
action plans (this can form part of the performance agreement);
 - Continuous management of performance throughout the year with ongoing feedback
provided to employee, in these coaching sessions, on meeting the milestones of the
performance agreement. The manager will act as a coach and facilitator in these informal
review sessions. There might also be a formal mid-year review;
 Preparation by the manager and the individual for the formal review where both will
consolidate the data collected throughout the performance cycle and engage in their own
assessment of the employee’s performance;
 The annual performance review, which leads to a new performance agreement;

Formal development and training programmes prompted by the performance review (but
throughout the year less formal training will be taking place in the form of coaching,
counseling, on-the-job training and self-development activities);
 Rating or ranking performance – although usual, this is not an inevitable performance
management activity;
 Performance-related-pay (PRP) – link between performance as measured by a
performance management process and pay which is becoming more common.