PERFORMANCE

MANAGEMENT AND
COMPENSATION PRACTICES

M19MBE334
- Dr.R.Karthikeyan
AP/ MBA, KIT
 Syllabus – Unit – I
PERFORMANCE MANAGEMENT

Performance Management-Introduction-Role
of Performance in Organization -
Performance Management Process-
Performance Planning-Performance Analysis-
Key Performance Areas-Process of
Performance Analysis.
 Introduction – Meaning

• Performance Management (PM) is a process of

ensuring that set of activities and outputs meets an
organization's goals in an effective and efficient
manner. It can focus on the performance of an
organization, a department, an employee, or the
processes in place to manage particular tasks.
Definition

• Performance Management is an ongoing

process of communication between a
supervisor and an employee that occurs
throughout the year, in support of
accomplishing the strategic objectives of the
organization.
 Role of Performance in Organization
• The role definition provides the framework for performance
management. It sets out three things.
1) The first is the purpose of the role:
The overall aim namely what the role holder is expected to
do and provides a foundation for the performance agreement
2) second is the key result areas or principal accountabilities:
The main output areas of the role and provide the headings
against which objectives and performance standards are agreed
Continue…

3) The third aspect is key capabilities:

The role holder has to be able to do and the
behaviour required to perform the role effectively.
Performance Management
Process
Continue…

1. Planning
2. Developing
3. Monitoring
4. Rating
5. Development Planning
Performance Analysis

• “Performance Analysis is a key functional

tool for providing the coach with
information about a team and/or individual
performance. The feedback then made
available to the players can be relevant,
accurate and objective rather than
unreliable and subjective”
Ian Franks, 1996
 Meaning

Performance analysis is the technique of

studying or comparing the performance of
a specific situation in contrast to the aim
and yet executed. In Human Resource,
performance analysis can help to review
an employee’s contribution towards a
project or assignment, which they allotted
him or her.
 Performance Analysis -
Importance
• It is an accepted method for measuring
service quality well known for its simplicity
and stress-free application. Performance
analysis focuses on the gap between the
customer expectation on the importance and
judgment on performing specific attribute of
service consumed.
 Performance Analysis Process

Three basic steps:

1) Data collection
2) Data transformation
3) Data visualization
 Key Performance Areas

Four Key Performance Areas(Basic):

1) Finance
2) Customer Satisfaction
3) Marketing
4) Productivity