Performance Management System

Unit-03
Performance Planning

Semester-03
Master of Business Administration
1
 UNIT

Performance Planning

Names of Sub-Unit
Performance Planning, Characteristics of Performance Planning, Objectives of Performance
Planning, Importance of Performance Planning, Methodologies of Performance Planning, Process of
Performance Planning, Barriers to Performance Planning

Overview

In this unit, firstly, you will study the concept of performance planning along with its characteristics
and objectives. Then, you will gain insight into the importance of performance planning and the
methodologies of performance planning. The unit will also shed light on the process of performance
planning. In the end, you will be acquainted with the study of barriers to performance planning.

2
 Learning Objectives

In this unit, you will learn to:

 Discuss the concept of performance planning
 Describe the methodologies of performance planning
 Explain the process of performance planning
 Inspect the barriers to performance planning

Learning Outcomes

At the end of this unit, you would:

 Evaluate the significance of performance planning
 Analyse the methodologies of performance planning
 Assess the barriers to performance planning
 Appraise the definition of performance management

Pre-Unit Preparatory Material

 https://sptf.info/images/RC-Dim5-GF-Performance-Planning-and-Management-HCH.pdf

3
Table of Topics

3.1 Introduction
3.2 Performance Planning

3.2.1 Objectives of Performance Planning

3.2.2 Importance of Performance Planning

3.3 Methologies of Performance Planning
3.4 Process of Performance Planning
3.5 Barriers to Performance Planning
3.6 Conclusion

4
 3.1 Introduction

Performance planning is a methodical and organised way to achieve an individual’s or team’s

specified goals throughout the assessment year. A strategy for the team or individual(s) is
devised while keeping the organisation’s larger goals in mind.
Performance planning is an important aspect of an employee’s professional development. An
efficient performance planning system will be simple to comprehend and implement. It would
also be accurate enough to provide an employee’s performance for a year.

3.2 Performance Planning

Performance planning is a fantastic approach to give a feeling of direction to the employees

and create a space for them to flourish in their careers.
Employee performance planning is an important aspect of performance management since
it focuses on enhancing and developing employee performance to meet overall business
objectives.
During performance planning, the employee’s superior should communicate the company
objectives and performance goals to him. In addition, the necessary training, resources and
support should be made available.
A performance improvement plan spells out the steps that an underperforming employee must
take to enhance his or her performance.
It can be used to identify areas for improvement, create goals and build strategies to attain
them with failing staff.
The first step in performance management is performance planning. Performance planning
involves defining what a task should be done and how it should be done in a way that both the
employee and his superior know what is expected of them as well as how success is defined
and measured.
Employee performance planning is based on organisational or unit goals and is done in
collaboration with the employee’s superior.
3.2.3 Characteristics of Performance Planning
Your overall performance format must consist of seven essential elements to ensure you can
work together with your staff to achieve success.
1. Start with a conversation: It is a good idea to start the meeting with a general discussion
about your rep’s performance rather than a detailed plan. There could be an underlying
explanation for your poor performance that you are not aware of. An open-ended
discussion can enable you and your reps to understand each other better and allow them
to seek assistance in specific areas.

5
2. Outline areas to work on: Perhaps a representative is falling behind in a specific area, such
as failing to meet the quota for three months in a row. A performance plan, on the other hand,
could address behavioural concerns, such as the inability to follow business rules or
contribute to the team.
Different scenarios necessitate different plans, but in every case, it is critical to spell out
clearly which areas require development and what the performance plan’s final objectives are.
This is alsoa wonderful method to put yourself to the test: if you cannot pinpoint a specific area
where you needto improve, a performance plan might not be the best tool you have.
3. Define quantifiable requirements for success: “Progress” and “improvement” are abstract
concepts that have no meaning unless they can be quantified. Assume you hire an
architect to design a house for you, but you provide no information on the square footage,
number of rooms, aesthetic preferences or anything else. Both parties would be left feeling
befuddled and nervous at the end of the procedure.
Be as specific as possible when creating a performance plan. Rather than asking staff to
“prospect better,” describe what that improvement will include in words that can be measured.
A 5% increase in closed sales is not the same as a 20% increase in closed deals, define success
clearly, hence you can assess whether a rep is meeting your expectations. This should also
reduce employee stress by letting them know exactly what goals they must achieve.
4. Determine a cut-off date for improvement: Occasionally, you will need a sales agent to
significantly boost their volume in the next two months or your company will suffer a
significant setback. Sometimes you will have the luxury of taking a bit extra time to assist
them in their development. Whatever situation you find yourself in, make sure you set a
timeline for change. Increasing salesactivity by 10% in three weeks vs. 10% in three months
is a very different task, and your plan shouldbe very clear about the timetable for success.
5. Provide assets for improvement: You would not put a plant in a pot, water it once and then
expects to see gorgeous blossoms a few months later. To achieve positive effects, regular care
and attention are required. The same can be said of your staff.
In some circumstances, further training or coaching may be required to meet performance
standards. Perhaps a more successful employee might advise someone who is struggling
or the struggling rep can be sent to a training course. But nothing will improve if nothing
changes, if reps are struggling, it is usually because they lack the resources they require
to succeed. By assisting them as much as possible, you will be setting up your reps – and
your business – for success.
6. Explain consequences: It is critical to be honest with your reps. Nothing will stress a salesman
more than being given a performance plan with no mention of consequences if the plan’s
requirements are not met, hence be open about what will happen if the plan’s standards are
not fulfilled. Is the rep at risk of losing this year’s bonus or a promotion opportunity? Is it
something more severe such as the prospect of being terminated?
This is another area where cautious consideration is required on your behalf. It is up to you
to determine how urgently your reps need to improve and how you want to handle situations
where someone is simply not up to par.

6
7. Regularly communicate feedback: Feedback does not have to be constant, but an effective
strategy must schedule regular check-ins to assess progress done to date and areas that still
require attention.You will not be able to offer suggestions or help along the way if you do not
check in until the finish, and your employee will be unaware of their progress.

3.2.4 Objectives of Performance Planning

The key goals of the overall performance planning are given as follows:
 The organisation’s purpose is clearly defined by performance planning. The idea is to set
realistic goals and objectives that are compatible with the mission in a time frame that is
within the capacity of the organisation to implement them.
 Following the planning, the next step is to communicate those goals and objectives to the
constituents of the organisation.
 We have to make sure the most superb use of the organisation’s assets by way of focusing
the assets on the key priorities.
 Then to supply a base from which growth can be measured and set up a mechanism for
knowledgeable exchange when needed.
 To hear everyone’s opinions to construct consequences about the place the enterprise is
going and the place to choose to reach.
 It offers a clearer centre of attention for the organisation, thereby producing greater
effectivity and effectiveness.
 It is used to identify the performance measures that are utilised to assess an employee’s
ability to accomplish predetermined goals.
 It gives planners a sense of fulfilment and purpose, especially when they share a single vision
of enhanced productivity through increased efficiency and effectiveness.
 It helps the company tackle big issues by offering continuous on-the-job feedback.

3.2.5 Importance of Performance Planning

The following factors talk about the significance of overall performance planning:
 Performance planning helps in aligning the person’s desires with the organisational
dreams and the notion at the back of this is mutuality for survival and growth.
 This makes the performance management process more accountable and objective.
 It focuses on key effects place and key overall performance place which need to be viewed
for gainingthe aggressive edge.
 Performance planning helps in most utilisation of sources and it is necessary to make
clear the position and duties of employees.

7
3.3 Methologies of Performance Planning
The key methodologies of putting up overall performance standards can be understood via the
followingfactors:

Key Performance Area

The key overall performance region for any worker consists of the identification of
precedence place first.
After figuring out this, subsequent working on the special region is done. The procedure of key
overall performance place includes the following steps:
1. Identification of necessary duties and activities
2. Determining the areas of priority
3. Setting dreams in the recognised area
4. Seeking the employee’s dedication to recognised work
5. Making preparations for required resources

Key Results Area

The period key outcomes location may also be described as a time-honoured place of results for
which a function is accountable and the primary mission is to discover them. Identifying KRAs
helps character personnel in a wide variety of method as enumerated here:
 Clarify their roles
 Align their roles to the organisation’s commercial enterprise or strategic plan
 Focus on consequences instead than activities
 Communicate their role’s functions to others
 Set dreams and objectives
 Prioritise their activities, and consequently enhance their time work management
 Make value-added decisions

Tasks and Target Identification

It includes the identification of roles, responsibilities, duties and key ambitions of the
personnel and using figuring out these, each worker needs to recognise their responsibilities
and key targets.

Goal Setting Exercises

The strategy of an organisation is determined by its ultimate goals. For instance, a company
intendingto come to be the world’s biggest fabric enterprise in the shortest feasible time
which is the closingaim of any organisation, will expand its manufacturing capacities both
through natural routes such as placing up new manufacturing facilities or by way of
obtaining different material organisations.

8
The organisation should pursue acquisition as a strategy for faster growth because it helps
increase production capacities quickly. However, acquisition strategy also includes turning
around the performance of older acquired production units, which essentially calls for
improving human performance for corporate success.

Organisational Objectives and Strategy

To comprehend the organisational goal and strategy, we must go through the following points:
 To assess the organisation’s resilience in the face of a changing environment
 To investigate a company’s critical issues
 To analyse the opportunities available to an organisation
 To investigate best practises in light of organisational resources and competencies

Assessment of Organisational Performance Needs

Following the identification of objectives and strategy, it is necessary to analyse performance
criteria, which should be accomplished by following procedures listed below:
1. Identifying advantage integral for reaching organisational targets and strategy
2. Gathering data about imperative problems associated with the purpose
3. Determining new and future overall performance wishes of the organisation
4. Prioritising organisational enhancement measures
5. Recognising core organisational values

Setting Organisational Performance Expectations

Following the evaluation, one should establish overall performance expectations, which can be
done: asfollows:
 Determining required vs. favoured performance
 Determining the cutting-edge overall performance status
 Understanding, aligning and agreeing on overall performance expectations
 Formulating key overall performance indicators
 Evolving job objectives
 Aligning man or woman dreams with organisational strategy

Establishing Performance Management Process

For setting up the overall performance management process, countless steps cited beneath
have to be considered.
 To create an all-encompassing performance management system
 To put performance planning into action
 To keep track of the performance

9
 To conduct a performance evaluation

Measuring Effectiveness of Performance Management

The following are the criteria for determining the effectiveness of performance management:
 Identifying possibilities for overall performance improvement in opposition to which
effectiveness will be measured
 Providing overall performance counselling inclusive of 360-degree comments as per the
requirement
 Devising reward method and administering a reward gadget correct
 Establishing overall performance administration audit
 Improvement in the aggressive role of the organisation

3.4 Process of Performance Planning

The steps in the performance planning process are as follows:
1. The individual formulates his job objectives in cooperation with his superior, keeping the
organisational/unit objectives in mind. An objective is a declaration of intent that says
what the superior wants the employee to do, how well and by when. Objectives are the
equipment for supporting the worker apprehend the key result predicted of him in the
course of a period, normallyon each yearly basis. Objectives must be result-oriented, specific,
quantifiable and time-bound to be operational.
2. Each aim and its contribution to corporate objectives are discussed during the performance
planning session, as well as how each objective’s achievement will be measured.
3. Any development activities that the employee will require are worked out in light of the
given objectives. Developmental activities are those that help an employee improve his or
her existing abilities or prepare for future tasks.
4. Once a performance plan has been formed, it is the employee’s job to carry out the plan’s
objectives and other responsibilities. Throughout the planned time, the superior worked
with the employee to coach and counsel him on his performance to assist him to achieve.

3.5 Barriers to Performance Planning

Barriers to performance planning can be divided into two categories:

 Organisational Barriers
 Individual Barriers
Figure 1 shows the barriers to performance planning:

10
 Performance
Individual Barriers

Figure 1: Barriers to Performance Planning

Organisational Barriers
Most of the standard corporations are now not in favour of overall performance planning.
Accordingto this concept, the corporations spending time on overall performance planning is
simply a wastage of time. These organisations feel they have a solid implementation plan, yet it
is only because of this, it becomes a barrier. For example, Indian enterprises typically devote
30% of their time to planning and 70% to implementation, whereas multinational corporations
devote 70% of their time to performance planning and 30% to strategy implementation.

Individual Barriers
Another significant impediment to performance planning is a lack of commitment among
the organisation’s employees or management. Managers or employees, or both, may
display a lack of commitment to achieving corporate goals for a variety of reasons, including
personal, organisational, competitive, or any other HR element. For example, Organisational
politics, workplace bullying, or high conflict cause employees to lose interest in their jobs.

3.6 Conclusion
 Performance planning is an important aspect of an employee’s professional development. An
efficient performance planning system will be simple to comprehend and implement.
 A performance improvement plan spells out the steps that an underperforming employee
must take to enhance his or her performance.
 Feedback does not have to be constant, but an effective strategy must schedule regular
check-ins to assess progress done to date and areas that still require attention.
 The organisation’s purpose is clearly defined by performance planning. The idea is to set
realistic goals and objectives that are compatible with the mission in a time frame that is
within the capacity of the organisation to implement them.
 Performance planning helps in aligning the person’s desires with the organisational
dreams and the notion at the back of this is mutuality for survival and growth.
 The organisation should pursue acquisition as a strategy for faster growth because it
helps increase production capacities quickly. However, acquisition strategy also includes
turning around the performance of older acquired production units, which essentially
calls for improving humanperformance for corporate success.
 Developmental activities are those that help an employee improve his or her existing abilities
or prepare for future tasks.
11
 Most of the standard corporations are now not in favour of overall performance planning.

3.7 Glossary

 Performance planning: It is a fantastic approach to give a feeling of direction to the

employees andcreate a space for them to flourish in their career
 Feedback: Information about a product’s reactions, a person’s performance on a task
and other similar data that can be used to improve performance
 Acquisition: The act of gaining or receiving something, or the item that was obtained, is
defined asan acquisition

3.8 CASE STUDY: THE EVOLUTION OF FOSSIL’S PERFORMANCE MANAGEMENT

PROCESS
Case Objective
The primary purpose of this study was to evaluate Fossil Group’s performance management
methodology.
For more than 15,000 global employees, Fossil Group used a cumbersome, all-paper method for
performance assessments and check-ins. They planned to implement a digital performance management
approach but first needed to streamline the process.
Throughout the year, Fossil Group built up four classic components that were spread across three critical
touch locations. These interactions were supplemented by ongoing performance discussionsthat
could be initiated at any time by any employee.

Fossil Group was pleased to see immediate progress as it developed its company-wide performance
methodology.
Goal-setting reviews were completed by 92 percent of employees, with each employee setting an average
of six goals. When they went deeper into the data, they discovered that 35% of the individual goals
generated were misaligned or had no bearing on the organisation’s strategic priorities. They realised
that if they intended to fulfil significant business goals, they needed to improve their goal alignment.

Discover how Fossil Group streamlined performance management in three ways.

1. They established a programme for continual performance discussions and feedback.
Even though the three formal performance touchpoints in place were effective, Fossil Group
recognised that teams needed to talk about goals more regularly. They instituted informal “check-
ins”that could be initiated at any moment by any employee. Fossil Group developed “Performance
Days”
— days dedicated just to employee performance — to guarantee appropriate time was provided for
crucial performance dialogues and other performance-related activities. There are no task-related
meetings scheduled on certain days, and all work is put on hold for the day. Performance is at the
centre of all conversations between managers, employees and teams.
2. They developed user-friendly goal conversation templates.

12
More performance talks weren’t enough for Fossil Group; the conversations needed to involve
constructive dialogue, debate and collaboration from managers and employees. They produced one-on-
one templates to assist managers and staff in having an effective and fruitful goal discussion.
Individual teams and team members’ requirements and work could be tailored using check-intemplates.
The templates ensured that discussions were focused on establishing clear, linked and motivating
objectives.
3. They used recognition to keep performance discussions interesting.
By acknowledging employee achievement daily, Fossil Group aims to bring performance dialogues full
circle. They designed employee recognition toolkits for managers, which included colourful notecards,
gift cards and ideas on how to recognise employees. They also developed an online peer- to-peer
recognition scheme, which generated 140 stories every week on average.
Fossil Group was able to listen to and act on employee voices and modify their performance strategyfor
success by taking the time to understand their needs and delegating time for managers to focus on
performance.
Source: https://www.quantumworkplace.com/future-of-work/performance-management-case-study-fossil-group

Questions
1. Describe how Fossil Group improved performance management.
(Hint: Fossil Group streamlined performance management in three ways. They established a programme
for continual performance discussions and feedback. They developed user-friendly goalconversation
templates.)

2. What motivated Fossil Group to create the “Performance Days” programme?

(Hint: Fossil Group developed “Performance Days” — days dedicated just to employee performance
— to guarantee appropriate time was provided for crucial performance dialogues and other
performance-related activities. There are no task-related meetings scheduled on certain days, and
all work is put on hold for the day.)

3.9 Self- Assessment questions

B. Descriptive Questions:
1. Write the three characteristics of performance planning.
2. Define performance planning and explain what does it entail.

3.10 Answers for Self- Assessment questions

13
A. Hints for Essay Type Questions
1. Characteristics of Performance Planning are as follows:
 Start with a conversation: It is a good idea to start the meeting with a general discussion about
your rep’s performance rather than a detailed plan. There could be an underlying explanation
for your poor performance that you are not aware of. Refer to Section Performance Planning
2. Performance planning is a fantastic approach to give a feeling of direction to the employees and
create a space for them to flourish in their careers. Refer to Section Performance Planning

3.11Post Unit Reading Material

 https://www.sc.edu/study/colleges_schools/artsandsciences/internal/documents/faculty_staff
/ cas_hr_epms_performancecharacteristics.pdf

3.12 Topics for Discussion Forums

 Discuss the various performance planning methodologies with your peers.

14
15