PERFPRMANCE

MANAGEMENT SYSTEM
UNIT – III

By:
Dr. Mohsina Fatima
Performance Management
 Performance Management can be defined as a process
which continuously identifies, measures and
develops the performance of the workforce in the
organization. And to do so, each individual’s
performance and objectives are connected with the
overall mission and goals of the enterprise. Hence,
the two key elements of performance management
are:
 Continuous process
 Link to mission and goals
 In performance management, the managers try to
figure out, the existing performance level of the
employees and works on improving that level. It is a
systematic assessment of the performance of
an employee and using the assessment to better
the performance over time.
Performance Management Cycle
Steps Involved in the
Accomplishment of the Process
 Performance Interview
 Archiving Performance Data
 Use of Appraisal Data
 These three activities along with the
feedback are the essence of the process,
which when undertaken in an organized
way, the process turns out
as Performance Management
System (PMS).
Concept of Performance
Management
 As a communication system, it is developed
to assist employees in succeeding. It not just
requires direction, from the end of managers
and supervisors, but also needs active
participation on the part of employees.
 It makes sure that employees are known
about their key job functions, aware of the
performance level expected, get constant
feedback on their performance, have
opportunities for training and development,
get ratings on their performance and reward
thereon, in just and fair manner.
North Carolina Rating Scale
North Carolina Rating Scale
 North Carolina Rating Scale is a five point performance
management rating scale, which guides the performance
functions, expectations, and appraisals.
 Outstanding Performance (O): Performance level
supersedes the expected level.The employee is doing an
outstanding job and the performance goes beyond
expected level, because of the employee’s efforts and
skills.
 Very Good Performance (VG): Performance level
fulfills established job expectations and in many ways
exceeds it.
 Good Performance (G): Performance level of the
employee, is in alignment with the job expectations set by
the organization, the employee is said to be doing a good
job.
 Below Good Performance (BG):The level of performance of
employee meets a few job expectation, but not all the parameters
are met. It is said that employee’s performance is at a minimal level
and improvements are required.

 Unsatisfactory Performance (U): The level of performance is

below a certain level, i.e. he/she fails to fulfill the established
standards. It is said that the employee is not performing well at the
level expected and requires high supervision and direction.

 The primary focus of the performance management is towards the

achievement of results. It highlights the difference between being
engaged and producing results, meaning that, when one is busy,
it does not mean that outcome is generated. It is often seen that
employees seem to be very busy, but when it comes to
performance, the results are against what is expected. So,
performance management, is a must for every organization.
Purpose of Implementing
Performance Management System
 Strategic
 Performance managed system is a tool which should be align with overall
organization goal followed through department goal and individual goals.In
other words, the organizational strategic goals should be linked with each
activity performed by every department or employee.
 Administrative
 Performance management system is also set the deciding factor of
employee’s promotion, demotion, salary increment, transfer and
terminations.It enables to identify the performers, non-performers or
under performer employees in an organization. It merits the competency
and skill level of employees. Hence, it clearly defines the administrative role
as well and supports the management decisions.
 Communication
 It is the effective communication channel to inform employees about their
goals, job responsibilities, key deliverables and performance
standards. Further, it is also a structure method to indicate the key areas of
improvement required by the employee in order to improvise his
performance. In other words, it provides the platform to learn and train
on skills, and knowledge for better performance and results.
 Developmental
 It is the structure method of communicating the positive feedbacks,
improvement areas, and development plans.The manager can
use various methods like training, mentoring, coaching etc. and
them their team members to perform better.
 Organizational Maintenance
 Performance management system is the yardstick of measuring
employee, department and organization
achievements and evaluating the performance gaps through
various tools and techniques. Hence, it maintains the health of the
organization and its performance standards.
 Documentation
 The performance management reviews, feedback and forms should
be documented and maintained periodically by every organization.
It would enable them to look forward, set new targets, design
developmental needs, design training and learning programmes, and
career progression of employee and for department. Hence, it
helps in driving the organizational needs to desirable objectives.