THE PRINCIPLES OF

PERFORMANCE
MANAGEMENT

Facilitators:
Mary Grace Arzaga-Masdo
Rozel Corpuz
PERFORMANCE MANAGEMENT
PERFORMANCE MANAGEMENT CYCLE

By:
Charles Cotter
PERFORMANCE MANAGEMENT CYCLE
Determination of
Organization
Strategy and Goals

Performa
nce
Planning

Performa On-going
nce Feedback
Review

Performa
nce Employee
Evaluatio Input By:
n Elaine D. Pulakos
PERFORMANCE MANAGEMENT CYCLE

By:
Herman Aguinis
PERFORMANCE PLANNING
• Clarifying Expectations

• Setting of goals/objectives, performance standards and criteria.

• Action Planning

• Contracting Performance Agreement

 GUIDELINES FOR ESTABLISHING
EFFECTIVE PERFORMANCE GOALS
• Goals must clearly define the end results to be accomplished.

• To the extent possible, goals should have a direct and obvious

link to organizational success factors or goals.

• Goals should be difficult, but achievable, to motivate

performance.

• Goals should be set in no more than three areas.

GOOD PERFORMANCE MEASURES
• Provide a way to see if our strategy is working.
• Focus employees’ attention on what matters most to success.
• Allow measurements of accomplishments, not just of the work
that is performed.
• Provide a common language for communication.
• Are explicitly defined in terms of owner, unit of measure,
collection frequency, data quality, expected value (targets), and
thresholds
• Are valid, to ensure measurement of the right things
• Are verifiable, to ensure data collection accuracy
5 STEPS TO FIND THE RIGHT
MEASURES
 PERFORMANCE TARGETS
• Target setting is the key ingredient to success.
• Without target setting, huge amount of energy can be lost,
unharnessed, unused. By working consistently toward the
attainment of certain clearly defined, specific targets, energy
can be tightly focused and the results will be outstanding.
• Targets are set to steer the organization/team/individual
during the short term.
• Targets are needed to drive performance and to measure
performance; to improve performance and to control
performance.
GUIDELINES IN PROVIDING FEEDBACK
EFFECTIVELY
• Provide immediate positive and developmental feedback in a
private location.
• Ask for the employees view about what could have been done
differently.
• Be specific about what behaviors were effective and ineffective.
• Focus on what the person did or did not do, not personal
characteristics.
• Collaboratively plan steps to address development needs.
• Offer help in addressing development needs and providing
resources.
Self-assessment
• Providing self-ratings on performance standards.
• Involving employees in the process, thus enhancing ownership
and acceptance.
• Reminding managers about the results employees have
delivered and how they were achieved.
• Employee-generated accomplishments can be included in the
formal appraisal, decreasing manager’s tasks.
• Increasing communication and understanding.
• Can be used as input for pay or promotion decisions.
 •Clarify definitions of
•job
•success criteria
Employees •Increase motivation to perform
•Increase self-esteem
•Enhance self-insight and
development

•Communicate supervisors’ views

of performance more clearly
Contributions •Managers gain insight about
of subordinates
Performance Managers •Better and more timely
differentiation between good and
Management poor performers
•Employees become more
competent

•Clarify organizational goals

•Facilitate organizational change
Organizations •Fairer, more appropriate administrative
actions
•Better protection from lawsuits
 • Lowered self-esteem
• Employee burnout and job
dissatisfaction
Employees
• Damaged relationships
• Use of false or misleading
information

• Increased turnover
• Decreased motivation to
Disadvantages/Da perform
ngers of Poorly- Managers • Unjustified demands on
implemented PM managers’ resources
Systems • Varying and unfair
standards and ratings

• Wasted time and money

• Unclear ratings system
Organizations
• Emerging biases
• Increased risk of litigation
 PURPOSES OF PERFORMANCE
MANAGEMENT
• STRATEGIC
Link individual goals with organization’s goals
Communicate most crucial business strategic initiatives
• ADMINISTRATIVE
Provide information for making decisions re:
Salary adjustments
Promotions
Retention or termination
Recognition of individual performance
Layoffs
 PURPOSES OF PERFORMANCE
MANAGEMENT
• INFORMATIONAL
Communicate to Employees:
Expectations
What is important
How they are doing
How to improve
• DEVELOPMENTAL
Performance feedback/coaching
Identification of individual strengths and weaknesses
Causes of performance deficiencies
Tailor development of individual career path
 PURPOSES OF PERFORMANCE
MANAGEMENT
• ORGANIZATIONAL MAINTENANCE
Plan effective workforce
Assess future training needs
Evaluate performance at organizational level
Evaluate effectiveness of HR interventions
• DOCUMENTATIONAL
Validate selection instruments
Document administrative decisions
Help meet legal requirements
 PERFORMANCE MANAGEMENT BEST
PRACTICES
• Strategic Congruence
• Thoroughness
• Practicality
• Meaningfulness
• Specificity
• Identification of Effective and Ineffective Performance
• Reliability
• Validity
• Acceptability and Fairness
 PERFORMANCE MANAGEMENT BEST
PRACTICES
• Inclusiveness
• Openness
• Correctability
• Standardization
• Ethicality
 5 COMPANIES TRAILBLAZING
PERFORMANCE MANAGEMENT
• ACCENTURE
“We’ll eliminate the traditional closed door ratings meeting where we talk ABOUT people .
Instead, we’ll talk with people in frequent coaching conversations.”
-Ellyn Shook, Chief Leadership & HR Officer at Accenture
• FACEBOOK
• MICROSOFT
“Our new approach will make it easier for managers and leaders to allocate rewards in a manner
that reflects the unique contributions of their employees and teams.”
- Lisa Brummel, Microsoft
• GOLDMAN SACHS
“Providing high quality and on going feedback is at the heart of our people and the future of our
firm.
-Lloyd Blankfein,Goldman Sachs CEO
• INSTACART
 MICROSOFT
THE OLD AND NEW SYSTEMS AT MICROSOFT
Old System Performance New System Performance
Management Management
1. Annual Review 1. “Connects”replace
2. Stack Ranking (Forced review
distribution of ratings) 2. Stack Ranking abolished
3. Goal Setting 3. Identify Priorities
 ‘CONNECT’ CONVERSATION AT
MICROSOFT
Two performance questions:
1. What impact did you have?
2. What opportunities were there for greater impact?

Two questions designed to help employees look forward:

1. What are your upcoming deliverables?
2. What will you do to learn in the upcoming period?
OUTCOME AT MICROSOFT

After 64%

After 20%

After 68%

After 18%
 ‘CONNECT’ CONVERSATION AT
MICROSOFT
Two performance questions:
1. What impact did you have?
2. What opportunities were there for greater impact?

Two questions designed to help employees look forward:

1. What are your upcoming deliverables?
2. What will you do to learn in the upcoming period?
OUTCOME AT MICROSOFT

After 64%

After 20%

After 68%

After 18%