Introduction to Performance

Management
Dr. Chetna Priyadarshini
AY: 2022-2023
What is Performance Management (PM)?
• PM is a continuous process of identifying, measuring, and developing
the performance of individuals and teams and aligning performance
with the strategic goals of the organization.

• Continuous process
• Alignment with strategic goals
The PM Contribution

• Motivation to perform is increased

• Self-esteem is increased

• Managers gain insight about the subordinates

• The definitions of job and criteria are clarified

• Self-insight and development are enhanced

• Administrative actions are more fair appropriate

• Organizational goals are made clear

• Employee engagement is enhanced

• Employees become more competent

• Employee misconduct is minimized

• There is better protection from lawsuits

• Timely differentiation between good and poor performer

• Supervisor’s views of performance are communicated clearly

• Organizational change is facilitated

• Motivation, commitment and intentions to stay in the organization are enhanced

• Voice behavior is encouraged

Aims/purpose of PM
• Strategic
• Administrative
• Informational
• Developmental
• Organizational maintenance
• Documentational
Characteristics of an ideal PM system
• Strategic congruence
• Context congruence
• Thoroughness
• Practicality
• Meaningfulness
• Specificity
• Identification of effective and ineffective performance
• reliability
• Validity
• Acceptability and fairness
• Inclusiveness
• Openness
• Correctability
• Standardization
• Ethicality
 Dangers of poorly implemented PM systems
• Increased turnover
• Use of misleading information
• Lowered self-esteem
• Wasted time and money
• Damaged relationships
• Decreased motivation to perform
• Employee burnout and job dissatisfaction
• Increased risk of litigation
• Unjustified demands on managers’ and employees’ resources
• Varying and unfair standards and ratings
• Emerging biases
• Unclear rating system
 Some examples of Performance Objectives
• Complete the in-house training programme schedule by 1 October 2020
• Reduce telephone expenses by 15 per cent within the 1st half of the fiscal year
• Identify three new cost-effective vendors for supply of raw materials by end of FY 2021

To generate ideas for performance objectives, we can raise the following questions:

What can employees do to improve the overall effectiveness?

To what extent can employees’ efforts to meet objectives during the appraisal period help us to
achieve results?
What needs to be done to improve the quality of service?
What refinements need to be made in operations by the process of new introduction or
elimination?
What do the employees need to do to optimize resources, modify systems, change priorities
and update skills?
What do employees need to do to meet the demand of the customers?
Points to be considered for developing performance
objectives
• Set short-term with a long-term perspective. Objectives are generally
set for periods of a year or less, which ultimately cascades to long-
term gains.
• Identify critical performance issues and the possible bottlenecks to
meet the same.
• Never underestimate resource needs.
• Ensure flexibility to bring changes in the performance objectives.
Principles to follow while developing the performance
standards
• Relate performance standards to employees’ job requirements
• Write performance standards in clear language, describing specific
behaviors and actions that lead to meeting the expectations
• Incorporate measurable and verifiable features in performance standards
• Detail performance expectations in terms of deadlines, cost, quality,
quantity, customer satisfaction etc. which can be tracked or verified
• Determine the acceptable margin of error
• Determine the specific conditions of meeting the performance
expectations.