Performance management and its challenges

Some of the major challenges in managing performance could be as follows:

1. Wrong Design : The performance management system and tools must fit with the specific
needs of the organization. It cannot be a duplication of a system designed and implemented in
another organization, even an organization in the same industry or the same business group.
Intense consultation with various stakeholders and users of the system is necessary. User trust is
an absolute necessity for the success of the system. The design should be tried out on a pilot
basis before it is rolled out to the organization as a whole. All documents and forms must be in
place. The system should be fair and equitable. Performance management should be viewed as
a continuous process and not an activity conducted once or twice a year. The design should also
include mechanisms for rewarding performance and handling poor performers.
2. Absence of Integration: The performance management system has to be integrated with the
strategic planning and human resource management systems as well as with the organizational
culture, structure and all other major organizational systems and processes.
3. Lack of Leadership Commitment: Leadership commitment and support is a must for smooth
implementation of the system. Leaders must drive the process and make performance
management an integral part of the management of the company. Leaders contribute not only
in setting the strategic direction and performance measures but also in monitoring and
reviewing performance across the organization. They also reinforce the performance cycle by
recognizing and rewarding performance.
• 4. Ignoring Change Management in System Implementation :Strategic
management of change is a vital part of implementing the system. Driven
by the top management, it involves careful management of resistance.
Communication would be a major intervention and a key tool in managing
the change. Implementation milestones and schedules must be followed.
Proper documents must be in place.
•
• 5. Incompetence:Competence to use the performance management
system is necessary to ensure smooth implementation of the system.
Some of the major skills would include:
• Defining strategic objectives, performance indicators, core competencies
and performance contracts
• Defining performance measures that correspond to the KPIs
• Giving and taking feedback, conducting appraisal interviews, and active
listening
• Performance coaching
• The focus would be on designing and implementing training and
development interventions that would help in developing the competence
of various job holders. Special emphasis would be on building the
behavioral dimensions of performance.
 BASIC PRINCIPLES OF EFFECTIVE PM
• Quality and effectiveness of PM is a reality in organizations only when certain basic and
fundamental tenets/ principles or practices of management are followed. These include:
• 1. Transparency – decisions relating to performance improvement and measurement such
as planning, work allocation, guidance and counseling and monitoring, performance review
etc., should be effectively communicated to the managers and other members in the
organization
• 2. Employee development and empowerment – effective participation of employees/
managers (individuals and teams) in the decision – making process and treating them as
partners in the enterprise. Recognizing employees/ managers of their merit, talent and
capabilities, rewarding and giving more authority and responsibility etc., come under the
umbrella this principle.
• 3. Values – a fair treatment and ensuring due satisfaction to the stakeholders of the
organization, empathy and trust and treating people as human beings rather than as mere
employees form the basic foundation, apart from others.
• 4. Congenial work environment – the management need to create a conducive and
congenial work culture and climate that would help people to share their experience
knowledge and information to fulfill the managers aspirations and achieve organizational
goals. The managers/ employees should be well informed about the organizational mission,
objectives, values and the framework for managing and developing individuals and teams for
better performance.
• 5. External environment – effective and contextual management of external environment to
overcome the obstacles and impediments in the way of effective managerial performance.
 FEATURES OF EFFECTIVE PM
• PM is a complex concept that encompasses different dimensions of the organization and the
people. The mission, the objectives and the goals of the organization should be well
designed. Performance planning, development and reward systems enable the managers to
realize their true potential in order to contribute for organizational growth and
development. The managers‘ performance and quality is a function of several prerequisites
that managers need to take care of. The following constitute the prerequisites
/characteristics to ensure effective practice of PM:
• 1. Clarity of organizational goals – the managers need to clearly and precisely lay down the
organizational goals, objectives and ensure that these are well informed to the managers
and other employees and make them to realize what the organization expects from them.
The organizational goals need to be translated into individual, team and departmental/
divisional goals.
• 2. Evaluation – the individual, team, department/ divisional performance needs to be
evaluated on continuous basis. The organization should develop an evaluation system and
process, which is designed and developed on scientific lines.
• 3. Cooperation but not control – the managers should nurture the practice of getting work
done through the system of obtaining managers‘ consensus rather than through control or
coercion.
• 4. Self-management teams – the management need to encourage the individual and teams
for self-management of their performance. This procedure creates in the managers 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.
• 5. Leadership development – the managers need to identify such of the managers who
have leadership potential and apart from sincerity and
 CHARACTERISTICS OF PERFORMANCE MANAGEMENT
• 1. Clarity of organizational goals – the managers need to clearly and precisely lay down the
organizational goals, objectives and ensure that these are well informed to the managers
and other employees and make them to realize what the organization expects from them.
The organizational goals need to be translated into individual, team and departmental/
divisional goals.
• 2. Evaluation – the individual, team, department/ divisional performance needs to be
evaluated on continuous basis. The organization should develop an evaluation system and
process, which is designed and developed on scientific lines.
• 3. Cooperation but not control – the managers should nurture the practice of getting work
done through the system of obtaining managers‘ consensus rather than through control or
coercion.
• 4. Self-management teams – the management need to encourage the individual and teams
for self-management of their performance. This procedure creates in the managers 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.
• 5. Leadership development – the managers need to identify such of the managers who
have leadership potential and apart from sincerity and honesty to ensure better and
effective two-way communication between the managers and the managers.
• 6. System of feedback – the organization must have a foolproof feedback system of
managers/ 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 managers need to be informed of their shortcomings. The evaluation
system should be made transparent so as to repose manager‘s faith in the system.