PERFORMANCE & TALENT MANAGEMENT

SEMESTER -3
SPECIALIZATION HR

MENTOR: DR. GEETHA JOSE

MODULE 1
Concept of PM
 PM concept and process

 Objectives and importance of PMS in organisations

 Prerequisites and characteristics of effective PMS

 Organisational, functional and individual key result areas

 Key performance indicators

PERFORMANCE MANAGEMENT
Organizations manage performance with two fold
objectives:
 to assess the employees’ performance and

 to develop the employees’ performance

 Both these objectives help in the achievement of

organizational objectives.
DEFINITIONS OF PERFORMANCE
MANAGEMENT

Michael Armstrong

Performance management can be defined as

a systematic process for
improving organizational performance by
developing the performance of
individuals and teams.
 A comprehensive definition of PM –
Strategic performance management

ARMSTRONG AND BARON, 1998

Performance management is a strategic and integrated approach
to delivering sustained success to organisations by improving
the performance of the people who work in them and by
developing the capabilities of teams and individual
contributors.
STRATEGIC APPROACH
 it is at the organizational level
 It is about organization’s vision mission and goals

 what to achieve, how to achieve

 how to develop competitive advantage,

 how to wants to survive and sustain.

AN INTEGRATED APPROACH
 all the systems of the organization are integrated with
each other;
 individual goals are integrated with the departmental
goals
 departmental goals are integrated with the organizational
goals.
MEANING OF PM
Performance management is a continuous process that aims
at identifying, evaluating and developing the
performance of individuals as well as teams working in
an organization, along with, aligning the performance (of
individuals and teams) in line with the strategic goals of
an organization.
 Continuous process
 itis a continuous never ending process in which goals are set,
objectives are formulated, performance is observed and feedback is
shared on an ongoing basis to improve the performance.
 Aligning the performance
 activitiesundertaken by the employees so, must be focused towards
the achievement of the overall objectives of the organization.
 The personal goals of the employees needs to be mapped with the
organizational goals and it has to be aligned with each other and
sense of balance need to be reached.
GUIDING PRINCIPLES OF
PERFORMANCE
MANAGEMENT
 Not just delegating but empowering employees
 Creating accountability

 Offering regular feedback-maintaining continuity

 Offering directions when needed not controlling

 Control should only be exercised by exceptions.
 Take timely actions

 coaching, counseling and feedback should aim at

correcting the deviations for achieving the strategic goals
of an organization and not the individual goals.
 IMPORTANCE OF PM
 Performance management has the potential to improve the
performance of organizations and act as a lever to achieve
cultural change.

 A focus on performance can bring real rewards for

organizations.

 Performance management can be the key space or mechanism

for dialogue in an organization.

 An organization’s choice of where to focus its attention in

relation to performance management may in part determine its
future and can certainly guide its culture.
THE PROBLEM OF PERFORMANCE MANAGEMENT
 Performance management is often referred to as the ‘Achilles
heel’ of HRM.

 All modern organizations face the challenge of how best to

manage performance.

 That is, they must determine the best ways to set goals,
evaluate work and distribute rewards in such a way that
performance can be improved over time.
 While all firms face similar challenges, the way a firm
responds to these challenges will depend on where the firm
is located and the context within which it is operating.

 Differences in culture, technology or simply tradition make

it difficult to directly apply techniques that have worked in
one setting to a different setting
The aims of performance management

 Performance management is a forward-looking process

primarily concerned with
 developing people and

 the systems in which they work to deliver sustained high

performance.
 It is not just about looking backwards and improving indifferent
or poor performance in the short term.
CONCEPTS…
Performance management system (PMS) is a series of
activities consisting of

 identification of critical performance dimensions,

 planning of performance,

 setting of performance goals and objectives,

 reviewing performance,

 sharing feedback, and

 finally developing the future performance through

training.
 PMS is a set of tools and techniques to improve the
organizational performance.
OBJECTIVES OF PMS
 Empowering, motivating and rewarding employees to do
their best
 Focusing employees’ tasks on the right things and doing
them right.
 Aligning everyone’s individual goals to the goals of the
organization
 Proactively managing and resourcing performance
against agreed accountabilities and objectives.
 Linking job performance to the achievement of the
medium term corporate strategy and service
 The alignment of individual objectives with team, departmental
and corporate plans.

 The presentation of objectives with clearly defined

goals/targets 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
 Systematic approach to organizational performance
aligning individual accountabilities to organizational
targets

 The process and behaviours by which managers manage

the performance of their people to deliver a high-
achieving organization

 Maximizing the potential of individuals and teams to

benefit themselves and the organization, focusing on
achievement of their objectives.
CHARACTERISTICS OF EFFECTIVE PM
 a planned process of which the primary elements are agreement,
measurement, feedback, positive reinforcement and dialogue.

 concerned with measuring outputs in the shape of delivered

performance compared with expectations expressed as
objectives.

 focuses on targets, standards and performance measures

 The organisation has a shared vision and ethical values that
is being communicated to all employees for seeking
employee commitment

 Employee performance target is a result of inter-linkage

between work unit objectives with organizational goals and
strategy

 Establishing performance criteria against which individual

and work unit achievements can be measured

 Tracking of employee’s progress towards performance

criteria is regular with feedback provided to the employee
 Reviewing of progress of employees results in
identification of areas of competency improvement

 Measuring performance of employees is linked with

reward outcomes

 Continuous enhancing of performance

 The evaluation of the effectiveness of PM process so

that changes and improvements can be made.
 It is based on the agreement of role requirements,
objectives and performance improvement and personal
development plans.

 It provides the setting for ongoing dialogues about

performance, which involves the joint and continuing
review of achievements against objectives, requirements
and plans.
 concerned with inputs and values
 a continuous and flexible process that involves managers
and those whom they manage
 It is based on the principle of management by contract
and agreement rather than management by command.
 It relies on consensus and cooperation rather than
control or coercion.
 Performance management focuses on future performance
planning and improvement rather than on retrospective
performance appraisal.
 mainly concerned with individual performance
 also applied to teams.
 The focus is on development, although performance
management is an important part of the reward system
through the provision of feedback and recognition and
the identification of opportunities for growth.

 It may be associated with performance- or contribution-

related pay but its developmental aspects are much more
important.
PREREQUISITES OF PMS
 Should attract very high levels of participation from all the
members concerned in an organization. It should be a
participative process.

 Top management support and commitment is very essential

for building a sound performance culture in an organization.

 Organizational vision, mission and goals should be clearly

defined and understood by all levels so that the efforts are
directed towards the realization of the organizational ambitions.
 Clear definition of the roles for performing a given job within the
organizational framework which emanates from the departmental and the
organizational objectives.
 The system should also be able to explain the linkages of a role with
other roles.

 Open and transparent communication should prevail which will motivate

the employees for participating freely and delivering high performance.
 Communication is an essential pre requisite for a
performance management process as it clarifies the
expectations and enables the parties in understanding the
desired behaviors or expected results.

 Identification of major performance parameters and

definition of key performance indicators.
 Consistency and fairness in application.

 A commitment towards recognition of high performance.

Rewards and recognitions should be built within the framework
of performance management framework.

 Proper organizational training should be provided to the staff

members based on the identification of training needs from
periodic evaluation and review of performance. This will
motivate the employees for a superior performance
 Organisational philosophies
 Attitudes and skills of those responsible for its
implementation
 Acceptance , commitment and ownership of managers
and employees
 Endorsement of the notions of procedural fairness and
distributive justice
 Availability of access to resources, tools, and skills to
employees to do their job
 Scope for managers to have the power to make decisions
and plan on the basis of needs
 Decentralisation
PERFORMANCE MANAGEMENT
PROCESS
 Designing a framework of performance management is
a key plan, monitor, evaluate, and measure performance
of individuals and teams.
 Establishing PM process entails:

Being clear about what is meant by performance

Understanding the performance culture
PERFORMANCE MANAGEMENT PROCESS
1)Pre –requisites
2) Performance planning
3) Performance execution
4) Performance assessment
5)Performance review
6) Performance renewal and recontracting
PRE-REQUISITES
 Knowledge of organisation’s mission and strategic goals
 Strategic planning
 Knowledge of job
 Job analysis, KSA,Tasks
 Rater training
PERFORMANCE PLANNING
 Results (outcomes)
Accountabilities
Objectives
Performance standards
 Behavior
 Competencies, KSA
 Development plan
PERFORMANCE EXECUTION
PERFORMANCE ASSESSMENT
 Both employee and manager responsible for evaluating
results and behaviour
 Extent to which goals achieved

 Supervisor appraisal and self appraisal

 Ownership of employee
PERFORMANCE REVIEW

 Appraisal meeting /discussion

PERFORMANCE RENEWAL AND RE-
CONTRACTING
 Insights and information from other stages
THE PROCESS OF PERFORMANCE
MANAGEMENT

1. Desired job performance is defined.

2. Specific challenging goals are set as to what the person or team

should start doing, stop doing or do differently.

3. The individual’s performance on the job is observed.

4. Feedback is provided and a decision is made about, training,

transferring, promoting, demoting or terminating the contract
of an individual.
KEY RESULT AREAS
 It is an activity or activities within a person’s Job where
particular actions must be taken to ensure that goods are
produced according to the set criteria or service delivery
to the customers achieved to required standards.
 “Key Result Areas” or KRAs, also called “Key
Performance Areas” (KPAs) refer to general areas of
outcomes or outputs for which a role, or a combination
of roles, is responsible. These are the areas within the
organisation where an individual or group, is logically
responsible / accountable for the results.
 KRA are those aspects of the unit or organisation that
must function effectively for the entire unit or
organisation to succeed.
 It varies across businesses

 Innovation, productivity, managerial performance,

service and quality, employee performance, public
responsibility.
KEY PERFORMANCE INDICATOR
ORGANISATIONAL, FUNCTIONAL AND
INDIVIDUAL KRA’S
  Key Result Areas (KRAs) refers to a short list of overall
goals that guide how an individual does their job, or
general achievement and progress goals for an
organization or one of its divisions.

 KRAs help define the scope of a job or a department or

an organization’s goals, and define the optimum
outcomes and results of daily work. KRAs are the items
that are critical for an organization or employee to be
successful.
 Key result areas may be defined as general areas of
outcomes or outputs for which a role is responsible.
They are also known as Key Work Outputs
INDIVIDUAL KRA
Identifying KRA helps individual employees to
 Clarify on their roles

 Align their roles to the organization’s business or

strategic plan
 Focus on results rather than activities

 Communicate their roles’ purposes to others

 Set goals and objectives

 Prioritize their activities, and therefore improve their

time and work management
 Make value added decisions
HOW TO DETERMINE KRA???
 Enlist Main day to day responsibilities
 For each activity ask ‘ why do I do this”

 Review the answers to ‘why’ questions , looking for

common themes
 Identify KRA from the themes

 Share your KRA to whom you report to.

ADVANTAGES
 Areas such as innovation, customer response time and
employee development are included
 First stage of objective setting

 Easier to assess current performance

SALES SPECIALIST
 KRA – Sales
 Objective – Sell ‘y’ new products to customers

 Measure – Number of units sold per new customer while

maintaining gross profit level of 25 percent and
ensuring repeat business within 12 months with same
custome
Typical CORE Key Results Areas for an IT department
would be:
 IT Strategy and Planning

 Business Solutions (design, development and

implementation)
 Service Delivery – the management of the delivery of
services to the organisation
 Service Support – the support of users and service
delivery environment
ORGANISATIONS KRA
 An organization’s Key Result Areas will vary depending
on the organization.
 But, several broad areas are a part of KRAs for many
organizations. They include the following:
 Profit and economic gain

 Customer satisfaction

 Employee happiness

 Product quality

 Organizational management

 Innovation