PERFORMANCE

MANAGEMENT
 DEFINITION OF PERFORMANCE
MANAGEMENT

• Performance management can be defined as a systematic process

to improve organizational performance by developing the
performance of individuals and teams working with an
organization.
• It is a means of getting better results from the organization,
teams, and individuals by understanding and managing their
performance within a framework of planned goals, standards and
competence requirements. In other words, performance
management is the process of managing an organization’s
management strategy. This is how plans are converted into
desired outcomes in organizations.
 DEFINITION OF PERFORMANCE
MANAGEMENT
• Performance Management is – ‘The development of individuals
with competence and commitment, working towards the
achievement of shared meaningful objectives within an
organization which supports and encourages their achievement’
(Bob Lockett).
• ‘Performance Management is managing the business’ (Susan
Mohrman).
• Performance Management is – The process of ‘Directing and
supporting employees to work as effectively and efficiently as
possible in line with the needs of the organization’ (Walter
Barinaga).
• Performance Management is – The processes of creating a work
environment or setting in which people are enabled to perform to
the best of their abilities. Performance management is a whole
work system that begins when a job is defined as needed. It ends
when an employee leaves your organization.
 EVALUATION OF PERFORMANCE
MANAGEMENT
•Performance evaluation is the process of evaluating how effectively
employees are fulfilling their job responsibilities and contributing to the
accomplishment of organizational goals.
•To appraise performance effectively, a manager must be aware of the
specific expectation for a job, monitor the employee’s behavior and
results, compare the observed behavior and results to expectations and
measure the match between them.
•In most cases, a manager should also provide feedback to employees, a
process that can produce strong reactions.
•Performance evaluations are extremely important to an organization,
although they may be difficult to conduct. They tell organizations
whether their selection methods are right.
•They demonstrate where training, development and motivational
programs are needed and later help to assess whether these have been
effective.
•As a matter of fact, many organizational policies and practices are
evaluated, in large part, through their impact on performance.
 DIFFERENT TERMS RELATED TO PERFORMANCE
MANAGEMENT AND THEIR DEFINITION
• Performance Management best practices demand a clear definition of terms used in
Performance Review, Feedback, Compensation process. Here is a different term related to
Performance Management.

Designation Job profiles of employees as per bands & departments

Employee
Setup Employee Specifies the timeline for the review with a start & end
Status date. Employee status in the organization.

Performance
Measures Setup

Band Compensation

Employee Pay structure i.e.,

Heads under Department Individual Organization
hierarchy in the
organization which salary is
paid Performance Measures that Performance Performance Measures
are set to evaluate Measures that that are set to evaluate
departmental performance are set to organizational
& thus indirectly an evaluate performance & thus
employee’s contribution to individual indirectly an employee’s
the same employee’s contribution to the same.
performance.
 DIFFERENT TERMS RELATED TO PERFORMANCE
MANAGEMENT AND THEIR DEFINITION

KPI Key Performance Indicator. A measurable value related to

Performance the Key result area for the employee.
Measures Performance An employee performance parameter that can be evaluated
Measure either through subjective or measurable rating.

Compensation

360 Degree
Goals
Feedback
Feedback process Work objectives
where an as per job role. Salary
Budgeting Increment
employee Finalization
receives Setting the A process of Any adjustments
feedback compensation budget compensation to employee’s
from External & for the next period. planning where correction,
Internal  Budgeting can be employees are given a outside the scope
stakeholders done at an fixed or performance of the increment
organizational level or linked pay raise. process.
a department & band
level. 
WHAT A PERFORMANCE MANAGEMENT
SHOULD DO?
 Establish objectives through which individuals and teams can
see their part in the organization’s mission and strategy.
 Improve performance among employees, teams and,
ultimately, organizations.
 Hold people to account for their performance by linking it to
reward, career progression and termination of contracts.

Effective performance management relies on both formal and

informal processes. It involves planning – for example, defining
and reviewing objectives, linking ways of achieving those
objectives to business plans, and setting measures of success.
These are often discussed in meetings between the line manager
and employees, known as performance review or appraisal.
IMPORTANCE OF PERFORMANCE
MANAGEMENT
It Provides a Look into the Future

Helps Create Development and Training Strategies

Provides Clarity in the Organization

Provides the Opportunity for Exchanging Feedback

Increases Employee Retention

IMPORTANCE OF PERFORMANCE
MANAGEMENT

Boosts Employee Engagement

It encourages employee recognition and reward

It helps in boosting employee productivity and engagement

Helps to enforce goal setting and achievement

It offers mentoring for increasing performance

LINKAGE OF PERFORMANCE MANAGEMENT
TO OTHER HR PROCESS
Performance management as a continuous communication process between an
employee and his/her immediate supervisor, determining clear objectives and
clarity with regards to the following:
How the employee’s job contributes to the objectives of the company.
The employee’s key performance areas.
What are the standards and expectations in terms of the key performance areas?
Measurement of key performance areas
How performance can be improved
Barriers to performing optimally
 LINKAGE OF PERFORMANCE
MANAGEMENT TO OTHER HR PROCESS
Managers use performance management systems to assess and reward the
behavior of their employees. Additionally, a strategic human resource
management function handles the recruiting, interviewing, hiring and
development of all personnel required to ensure your company can achieve
its goals. The relationship between performance management and strategic
planning links day-to-day operations with your company’s vision.

Defining Personal Development Goals.

Setting Organizational Goals
Managing Change
Providing Training
Ensure HR does what it is supposed to do
 AIM OF PERFORMANCE MANAGEMENT
Performance management is about aligning individual objectives to organizational
objectives and ensuring that individuals hold the corporate core values. It provides for
expectations to be defined in terms of role responsibilities and accountabilities expected to
do, skills expected to have and behavior expected to be.
The main points of view towards achieving the aims of performance managements are:

 Empowering, motivating and rewarding employees to perform their best for the
organization.
 Focusing on employees’ tasks, the right things and make them doing right. Aligning
everyone’s individual goals towards the goals of the organization.
 Proactively managing and resourcing performance against objectives of the
organizations.
 Linking job performance to the achievement of the council’s corporate strategy and
service plans.
 The alignment of individual objectives with team, department and corporate plans. The
presentation of objectives with clearly defined goals using measures, both soft and
numeric. The monitoring of performance and tasking of continuous action as required.
 All individuals being clear about what they need to achieve and expected standards, and
how that contributes to the overall success of the organization; receiving regular, fair,
accurate feedback and coaching to stretch and motivate them to achieve their best.
 DIMENSION OF PERFORMANCE
MANAGEMENT
•A guide for development and coaching that we often use uses 10 performance
dimensions that apply in most, if not all, jobs – from entry level right to CEO level.
•They provide a great way to look at the top 10 critical dimensions of almost every
job and provide a great framework to guide and develop people in their roles. These
include:
1. Quantity of work i.e., the quantity or amount of work produced, or the
sheer volume of work completed by employees – recognizes hard-working
employees
2. Timeliness of work i.e., timely delivery of work in terms of schedules,
meeting deadlines, etc. – recognizes employees who produce work on-time
and meet deadlines
3. Quality of work i.e., the quality of work produced in terms of standards,
errors, waste and rework – recognizes employees who produce quality work,
work which meets standards and work with few errors or mistakes
4. Use of Resources/Efficiency i.e., produces work in an efficient way in
terms of using time, money, materials and other people’s time well –
recognizes employees who come in on budget with efficient use of time,
materials and people
 DIMENSION OF PERFORMANCE
MANAGEMENT
5. Customer (External & Internal) Impact/Value Add i.e., work produced
meets the expectations of customers (external or internal) – recognizes employees
who do work that meets/exceeds internal or external customer standards and
expectations
6. Self-Reliance i.e., recognizes employees who produce work without the need
for extensive supervision – requires a reasonable level of support
7. Department Contribution – the employee is helpful to others in the
department in getting work done and sets a tone of co-operation
8. Productive Work Habits – the employee has an overall work style which is
effective and productive in terms of time management, setting priorities and
following-up on commitments
9. Adding Skills & Capabilities – the employee is continuously adding new
capabilities in terms of skills, knowledge, and attitude to get work done in
new/better ways and building for the future
10. Alignment & Compliance – the employee behaves in a way that is aligned
with the values, culture and mission of the organization as well as common
organizational practices and procedures.
This is a very useful way to consider performance and incorporating the 10
dimensions really adds value to the performance management process.