DEFINITION
According to Armstrong, performance management is a means of getting better
results from the organization, teams and individuals by under-standing and
managing performance within an agreed framework of planned goals, standards
and competence requirements. It is a process for establishing shared
understanding about what is to be achieved and an approach to managing and
developing people in a way that increases the probability that it will be
achieved in the short and longer term.
Armstrong and Baron define performance management as a 'strategic and
integrated approach to delivering sustained success to organizations by improving
performance of the people who work in them and by developing the capabilities of
teams and individual contributors'. They consider performance management as
strategic since it concerns the, achievement of longer-term organizational goals and
effective organizational functioning in its relevant external environment.
IMPORTANCEOF PERFORMANCE
MANAGEMENT
1. Performance Management focuses on results, rather than behaviors and
activities. A common misconception among supervisors is that behaviors
and activities are the same as results. Thus, an employee may appear
extremely busy, but not be contributing at all toward the goals of the
organization. An example is the employee who manually reviews
completion of every form and procedure, rather than supporting automation
of the review. The supervisor may conclude that the employee is very
committed to the organization and works very hard, thus, deserving a very
high performance rating.
2. Aligns organizational activities and processes to the goals of the
organization Performance Management identifies organizational goals,
results needed to achieve those goals, measures of effectiveness or efficiency
(outcomes) toward the goals, and means (drivers) to achieve the goals. This
chain of measurements is examined to ensure alignment with overall results
of the organization.
3. Cultivates a system-wide, long-term view of the organization— Richard A.
Swanson, in Performance Improvement Theory and Practice (Advances in
Developing Human Resources, 1, 1999), explains an effective performance
improvement process must follow a systems-based approach while looking
at outcomes and drivers. Otherwise, the effort produces a flawed picture.
For example, lying off people will likely produce short-term profits.
However, the organization may eventually experience reduced productivity,
resulting in long-term profit loss.
4. Produces meaningful measurements-These measurements have a wide
variety of useful applications. They are useful in benchmarking, or setting
standards for comparison with best practices in other organizations. They
provide consistent basis for comparison during internal change efforts. They
indicate results during improvement efforts, such as employee training,
management development, quality programs, etc. They help ensure
equitable and fair treatment to employees based on performance.
PERFORMANCE MANAGEMENT PROCESS
The three stages of performance management- planning, managee performance
and development, monitoring managee performance, mentoring managee
development and annual stocktaking- occur in a definite sequence. Planning is
done at the beginning of the year; monitoring and mentoring right through the
year as the plans are executed; and stocktaking in toe at the year, when it is also
time to plan afresh for yet another year. Each one of these phases requires
certain concrete actions to be taken by the manager and the managee, both of
them providing appropriate inputs, while keeping the whole process in
perspective.
Performan Performanc
ce rating e-e related
pay
Mission and Objectives Performance Continuous Performance
value statements agreement performance review
management
Feedback Feedback
Developme
nt training
Role-wise performance plans and expectations must flow from both:-
1. The organization’s mission, strategy and operational plans, and
2. The individual managee’s role and indices of his contribution to the
organizational process in the form of performance standards and indicators.
1. In consultation with the superior, the employee formulates his - job
objectives keeping in view the organizational/ unit objectives An objective
is a statement of intent and states what the superior expects from the
employee to accomplish, how well and by when. Objectives are the tools
for helping the employee understand the key result expected of him during
a period, generally on yearly basis. To be operational, objectives should be
result-oriented, specific, measurable and time-bound.
2. During the performance planning session, each objective and its contribution
to organizational objectives is discussed and it is also determined how the
accomplishment of each objective will be measured.
3. In the light of the stated objectives, any development activity that will be
required by the employee are worked out.
4. Once performance plan is established, it is the responsibility of the employee
to carry out the objectives and other responsibilities specified in the plan
