PM9 - PERFORMANCE MANAGEMENT

THE IDEAL PERFORMANCE MANAGEMENT 2. Middle-level Management. The Crucial Link.

♥ Middle managers are a key link between the top and lower
What is an IDEAL PERFORMANCE MANAGEMENT SYSTEM? levels of management.
An ideal performance management system is one ♥ They are responsible for managing other managers and
♥ in which all employees are aware of performance expectations translating strategy into action. As such, they create systems and
♥ which aligns everyone in the organization with the company’s procedures to accomplish the organization’s desired results.
goals (subgoals, overarching goals (mission and vision). They are sometimes designated as “player coaches.”
♥ supervisors establish clear performance expectations through ♥ They also see to it that organization plans and policies are
which employees can easily understand what they expect of effectively and properly executed. (maintain consistent
their job. communication regarding the strategies and goals that senior
How do we know the alignment between employees and the PMS? management has established.)
What should/can be done? ♥ They play a key role in the employment of necessary staff as well
as the training and development of lower-level or frontline
HOW DO WE KNOW THE ALIGNMENT? management.
♥ Middle managers handle everyday issues that come up at a
Check the current performance of the organization on a regular basis specific business site or in a specific department within the
♥ Are the employees engaged with their job. (do they produce the organization.
required results? Is the PMS effectively syncing with business ♥ Middle management concentrates on interactions with workers
outcomes? and the day-to-day functioning of a specific site, office or
What can be done to ensure alignment? department within the company
♥ Regular employee surveys or focus groups(FGs) can provide Do middle level managers monitor employee performance?
valuable insights into the satisfaction and engagement levels of
employees with the PMS. Frontline Management. The Frontline Supervisors
♥ Conduct surveys/FGDs** of employees. ♥ Called by many aliases/names: most common names include
 Analyze the feedback of the employees and the FGDs. By supervisor, manager, line manager.
analyzing this feedback, potential issues and areas for ♥ They oversee the daily tasks and the actual production of the
improvement within the system can be identified. work.
♥ It is also important that the managers* and their people meet ♥ crucial in both day-to-day business operations and worker
for a performance review where they assess their own supervision, ensuring that deadlines are met, customer issues
performances first. Assessment of the people/employee directly are addressed with expediency, quality and quantity of output
reporting/working under them are also assessed. are attained, employee performance meets or exceeds
standards, and organizational policies are adhered to.
FG (focus groups) is a demographically diverse group of people  They must maintain consistent communication with
assembled to participate in a guided discussion workers, provide feedback on performance, and share
information as needed up the chain of command.
LEVELS OF MANAGEMENT
Traditional VS Progressive Performance Management system
1) Top-level (Senior) Management
2) Middle-level Management TRADITIONAL PROGRESSIVE
3) Frontline Management
Feedback is shared annually Feedback is shared
Top-level (Senior) Management. The Strategic Decision-Makers continually
♥ includes the C-suite personnel (chief executive officer, chief Strategic plans are static (not Strategic plans are flexible
operating officer, chief financial officer, department heads, changing)
board of directors, managing director, etc.) who are responsible Ratings and GR driven. Reviews Collaborative and feedback
for seeing that the organization survives and thrives. are compared among driven
♥ have a dual focus on the internal activities of the business, as employees.
well as:
 influences beyond the organization, such as competition,
Why is Flexible better that Static strategic plans?
new and emerging technologies, economic disruptions,
Flexible strategic plans are better than static ones because they can adapt to
 and any other factors that may impact the company’s changes when needed, unlike fixed plans. They encourage new ideas and
success and stability. (ex. Marketing and selling, promoting creative solutions, allowing people to contribute their thoughts. Flexible plans
business, customer rservice) are better at handling unexpected problems, making them more resilient.
♥ The senior manager has a direct influence on specific company Employees feel more involved and valued when their input is considered. This
policies, setting of goals and objectives, strategic planning, type of planning also promotes continuous improvement, as strategies can be
budgeting, and other high-level considerations that directly regularly reviewed and refined. Overall, flexible plans help organizations stay
affect projects and initiatives, as well as employee strong and navigate challenges effectively.
responsibilities and accountabilities.
♥ Individuals who hold positions in senior management play A business is started with goals already set.
critical, high-level roles in executing the plans of the business, Circumstances change, and your plans should adapt accordingly.
and as such, regularly interact with shareholders or external Regularly reviewing and adjusting them with input from your team
stakeholders such as board members, parent organizations, etc., and stakeholders helps maintain alignment with your evolving
and communicate and adjust strategy in accordance with their business needs and priorities. It's a dynamic approach that enhances
degree of influence and ownership in the organization and its your chances of success.
activities. ♥ new competitors emerge, technology changes or legal
requirements change static plans may no longer be in alignment
with the strategies needed to take the company forward.

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♥ As the pace of business continues to accelerate so do the job roles accurately.
organization and individual’s strategic plans. ♥ Continuous Improvement: Regularly review and refine the performance
A dynamic approach means being flexible and able to change when needed. It management process to ensure it remains fair and effective. Seek feedback
involves adjusting plans or actions based on new information or circumstances, from employees on the system and make adjustments as needed.
rather than sticking to a fixed plan. This helps in dealing with unexpected 2. must be efficient.
events and finding better solutions. Simply put, it's about being adaptable and ♥ The program must be more than a “box checking “ job.
open to change. ♥ Bottom line, it should improve the way people perform.
HOW?
FLEXIBLE STRATEGIC PLANS EFFICIENT: Efficient means achieving a goal or completing a task with the least
amount of wasted time, effort, or resources. In other words, it's about being
productive and getting things done in the best possible way without unnecessary
Business plans are “living” documents. They're updated and
effort or expense.
adjusted constantly as a business grows. Change is necessary as initial
plans get course-corrected and external factors like market pressure, ♥ Clear Goals and Expectations: Set clear, specific, and achievable goals for
investor demands, and economic swings impose themselves. employees. This helps them understand what is expected and how their work
Think of business plans as “living” documents, meaning they're not set in contributes to the organization’s success.
stone. Instead, they change and grow along with the business. As the business ♥ Regular and Constructive Feedback: Provide ongoing feedback, not just
progresses, initial plans might need adjustments to stay on the right track. during annual reviews. This allows employees to make continuous
improvements and feel supported in their development.
External factors like market trends, investor needs, and economic changes also
♥ Employee Development Plans: Create individualized development plans that
play a role in shaping these plans. Essentially, flexibility and constant updates
focus on enhancing each employee’s skills and career growth. This shows that
are key to ensuring the business adapts and succeeds. the organization is invested in their success.

A GOOD PERFORMANCE MANAGEMENT SYSTEM 3. should elevate performance; not just measure against lower limits.
This means…
A good performance management system: ♥ link the individual’s performance to the organization’s strategic
♥ fosters communication and collaboration instead of just objectives. How is the initiative of the individual?
focusing on competition. Is he working just to meet minimal performance expectations?
♥ motivates employees to share information, assist in highlighting ♥ should emphasize in the individual the culture of taking
activities that make certain individuals successful and use them responsibility, which goes beyond making people merely feeling
as a reference for the rest of the workforce. accountable (responsible)
A good performance management system encourages open communication
What is “going beyond” being accountable?
and teamwork among employees. Instead of making everyone compete against
Going beyond being accountable means taking full ownership and proactively
each other, it creates an environment where people can share ideas, give and addressing issues, rather than just following instructions or meeting basic
receive feedback, and work together toward common goals. This approach expectations. It involves a deeper commitment to the organization’s goals and a
helps build trust, improves problem-solving, and makes the workplace more personal drive to contribute meaningfully.
supportive and productive.
4. Compensation decisions should be a by product of performance
Characteristics of an Ideal PMS (by Forbes.com) management.
Compensation management:
1) must be accurate and fair. ♥ is the practice of planning and distributing the overall pay and
2) must be efficient. benefits package to a company's employees.
3) should elevate performance; not just measure against lower ♥ ensures that a company's salaries and bonuses remain
limits. competitive within the industry and equitable within the
4) Compensation decisions should be a by product of organization.
performance management. ♥ There is symbiotic relationship between performance
5) should use multiple data sources. management and compensation.
6) should include formal development on coaching skills. ♥ Fair compensation, monetary or otherwise, is a necessary
When we say that compensation decisions should be a byproduct of performance
management, it means that how employees are paid should directly relate to how
component of making employees feel seen and appreciated,
well they perform in their roles. Performance management involves regularly inspiring them to work harder for the greater good of the
evaluating and providing feedback on an employee's work. By using these company.
evaluations, companies can make informed decisions about salaries, bonuses, ♥ Performance management can be an effective way to lay the
promotions, and other forms of compensation. This approach ensures that groundwork for compensation decisions. It enables HR and
employees who perform well are rewarded appropriately, which can motivate them
managers to monitor and evaluate employee work against the
to continue doing great work.
strategic objectives of the company.
In essence, performance management helps to determine fair compensation, and
1. must be accurate and fair. fair compensation motivates better performance. They support each other like
Individual performance is always a combination of the skills partners in a healthy, mutually beneficial relationship.
and capabilities of an individual put in the context of a job. Some jobs
are easy and others are difficult, and a manager does not always see Poor Implementation of a Performance Management
an employee’s performance accurately or comprehensively. System
What can be done and HOW? Poorly implemented performance management system is due to bad
♥ Regular Feedback: Conduct regular check-ins and performance reviews to performance of management.
provide ongoing feedback. This helps to address any issues promptly and
ensures that performance assessments are based on a series of observations
♥ It can lead to detrimental organizational outcomes because
over time rather than a single instance. management becomes ineffective.
♥ 360-Degree Feedback: Incorporate feedback from multiple sources, including ♥ It can cause organizations permanent shutdown due to poor
peers, subordinates, and self-assessments. This provides a more decisions.
comprehensive view of an employee’s performance and reduces bias from ♥ It can lead to unclear rewards, unfair performance ratings,
any one individual.
biases, lack of standards, goals etc.
♥ Training for Managers: Provide training to managers on how to conduct fair
and unbiased performance evaluations. This can include recognizing and
♥ It can cause high employee turnover and the cost of constant
mitigating unconscious biases and understanding how to evaluate different recruitment and training may prove to be too much.*

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Retaining an employee is more advantageous than hiring a new deprioritized, but instead has been fully dropped from further
employee. consideration.
Keeping an employee is cheaper and faster than hiring new ones. Existing employees Example:
know the company well and are more productive. They help keep team morale high  What is wrong selection of employee goals?
and build strong customer relationships. Retaining employees also leads to The wrong selection of employee goals refers to setting objectives that are not
continuous improvement and innovation. Overall, it results in a skilled and suitable, relevant, or effective for the employee's role and the organization's overall
motivated workforce, benefiting the organization in the long run. strategy
Examples:
Reasons Why Performance Management System Fails  TERRIBLE GOAL: The product must give us profit.
 BAD GOAL: The company must earn 2M from the product a
1) Unstructured Performance Management Process week after its launch.
2) No Or Wrong Selection Of Employee Goals  GOOD GOAL: We should penetrate at least three big retail
3) Overemphasizes On Recent Performances outlets within 6-month after the product launch.
4) Annual Performance Evaluation
5) No Employee Recognition And Rewards 3. Overemphasizes On Recent Performances
Recency bias leads to an overemphasis on an individual's most
1. Unstructured Performance Management Process. recent achievements or setbacks, overshadowing their overall
How should management be structured? performance over time. This bias can distort the accuracy and fairness
there are three levels of management: of evaluations, potentially hindering professional development.
♥ top managers. - responsible for overall performance; Recency bias occurs when we give too much importance to someone's most recent
♥ middle managers. - report to top managers and oversee lower- actions or performance, whether good or bad. This can cause us to overlook their
level managers; and overall performance over a longer period. As a result, evaluations may become
♥ first-line managers.- supervise employees to make sure that inaccurate or unfair.
work is performed correctly and on time.
4. Annual Performance Evaluation
What is a Well Structured PMS: ♥ Infrequent feedback: The time gap can hinder timely feedback
There is… and limit opportunities for ongoing communication and
♥ Delegation of roles, power and responsibilities. performance improvement.
 Roles, power and responsibilities are assigned, controlled, ♥ Bias and subjectivity: Reviews can lead to subjectivity, as they
and coordinated, solely rely on the opinions of supervisors w/c can lead to biased
♥ Clear flow of information among the different levels of assessments based on personal perceptions and negative
management. experiences for employees.
 A management structure describes how a company ♥ Focus on past performance: Often emphasize on past
organizes its management hierarchy. In almost all performance rather than real-time assessments w/c may not
organizations, a hierarchy exists. capture recent accomplishments or changes in an employee’s
a well-structured PMS helps the employees understand the performance since the last review meeting.
organizational strategies better and work towards achieving their ♥ Anxiety and stress: The anticipation of an annual performance
goals with more motivation. review can create anxiety and stress on employees.
♥ Lack of continuous feedback: Traditional reviews do not provide
2. Non-Goal* Or Wrong Selection Of Employee Goals the feedback loop necessary for ongoing feedback and coaching.
Goals are important to keep employees motivated and perform better. Employees may miss out on regular opportunities to receive
They provide employees the intention. Without the intention, no way guidance, suggestions for improvement, support, and
of setting the course, no way of knowing where to end up. recognition for their work.
 In essence, goals make employees organized. Goals make ♥ Administrative burden: Conducting annual reviews for all
us feel like we're heading in the same direction. employees can be time-consuming, especially in large
Despite the use of goals, goals can harm as much as it can help. When organizations. This can delay the feedback process.
poorly used, can overly stress employees, drive unethical behavior,
and induce the opposite outcome of what you actually want. 5. No Employee Recognition And Rewards
Supervisors need to help their employees develop effective goals and When employees feel like their contributions are being
help them to understand when goals just don’t matter. acknowledged and rewarded, they are more likely to be committed to
the success of the organization. This can lead to increased productivity
NON-GOAL: and better overall performance, which can benefit the organization
 A non-goal refers to the absence of clear, specific, and meaningful objectives and help to retain top talent.
for employees. When there are no goals in place, employees may lack Lacking a program can create a work environment where
direction and motivation. This can lead to confusion about what is expected
employees lack motivation, productivity, and engagement.
of them and how their work contributes to the overall success of the
organization. Without goals, employees might struggle to prioritize tasks,
make decisions, and measure their progress. In short, non-goals result in a THE PERFORMANCE REVIEW
lack of purpose and focus, which can negatively impact performance and
productivity. Why is there a need for a performance review?
Goals are essential because they keep employees motivated and focused on their A performance review is a formal assessment where an employee's work
tasks. They provide a clear direction and purpose. Without goals, employees might performance is evaluated by their manager. It provides feedback on strengths and
not know what to aim for or how to navigate their work. areas for improvement, helps set clear goals, identifies training needs, recognizes
In essence, goals help organize employees, making them feel like they're working achievements, and fosters open communication. Performance reviews ensure that
towards a common objective. This sense of shared direction ensures that everyone employees' efforts align with the organization's goals, contributing to overall
is aligned and moving in the same direction, which can improve teamwork and success.
overall performance.

PERFORMANCE REVIEW DEFINED:

A non-goal is an objective that managers/supervisors deliberately
A performance review (performance appraisal or an employee
choose not to pursue. This means that the non-goal is not simply
evaluation)

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♥ is a formal assessment in which a manager evaluates an 12) Technology and digital transformation
employee's work performance. 13) Legal and regulatory compliance
♥ it can be structured* in different ways to effectively identify
strengths and weaknesses, offer constructive feedback, and set 2. Approach w/c take into account multiple perspectives
goals for the future. 360-degree appraisal.
♥ most reviews will compare employee work and behavior ♥ More comprehensive view of employees’ performance (support
alongside the expectations and objectives of the company. their development)
♥ The manager will provide feedback on the employee's work and ♥ Improves the validity and reliability of the results, (more
attitude while acknowledging significant achievements and credible>>increased acceptability)
identifying any areas of improvement. ♥ foster a culture of feedback and collaboration by encouraging
Performance reviews can be structured in various ways to effectively assess more communication and dialogue.
employees' strengths and weaknesses. They provide constructive feedback and set ♥ reduce potential biases and errors of a single source of feedback.
future goals. Different approaches can include formal meetings, written evaluations,
peer reviews, self-assessments, or a combination of these methods. The key is to
create a system that accurately evaluates performance, supports employee A 360-degree appraisal is a comprehensive performance evaluation method that
development, and aligns with organizational goals. gathers feedback from multiple sources around an employee. This typically includes
input from the employee’s manager, peers, subordinates, and sometimes even
customers. It also often includes a self-assessment by the employee. By collecting
What is a structured* performance review? feedback from various perspectives, a 360-degree appraisal provides a well-rounded
is a performance review which is systematic and uses a view of an employee’s strengths, areas for improvement, and overall performance.
framework to manage and improve employee performance. It This method aims to offer a more balanced and accurate assessment compared to
traditional reviews that rely solely on a manager's perspective.
involves setting clear expectations, measuring performance against
those expectations, providing feedback, and taking necessary actions
to enhance performance. 3. Incorporate feedback into day-to-day work.
(why day-to-day?)
Incorporating feedback into day-to-day work is important because it helps
STRUCTURING TH PERFORMANCE REVIEW
employees make continuous improvements. Regular feedback allows them to adjust
their actions, learn new skills, and address any issues immediately. This ongoing
process keeps performance on track, boosts productivity, and fosters a culture of
learning and growth. In essence, integrating feedback into daily routines ensures
that employees stay aligned with their goals and the organization's objectives,
leading to overall success.

♥ Supervisors should take precautions when giving negative

feedback.
♥ Employees should not take feedback personally or emotionally,
but rather as an opportunity to learn and grow.
HOW?
Supervisors should give negative feedback in a supportive way, focusing on specific
behaviors, using a positive tone, and offering solutions. They should be empathetic
and provide timely feedback. Employees should stay open-minded, ask questions,
STRUCTURED REVIEW DEFINED: focus on improvement, stay calm, and reflect on the feedback. This approach helps
Managers should be trained, BECAUSE… employees view feedback as an opportunity to learn and grow, rather than taking it
♥ PMS provides an excellent opportunity for supervisors and personally or emotionally.
employees to identify developmental needs w/c is important for
company growth and success. Employees should not take feedback personally or emotionally, but
♥ training will help managers develop their skills, knowledge, and rather as an opportunity to learn and grow.
capabilities. (HOW?)
 This training equips managers with the essential tools to ♥ Review Feedback Carefully : Read through all feedback to
effectively lead and oversee teams, make informed understand the suggestions or criticisms.
decisions, and navigate the complexities of their roles. ♥ Prioritize Changes : Determine which feedback is most critical to
♥ Manager training typically covers various aspects such as: address first, especially if there are conflicting suggestions.
communication, conflict resolution, strategic planning, ♥ Implement: Implement the changes directly into the work.
employee development, and compliance with company policies
and regulations. 4. Make the process as streamlined as possible.
♥ Manager training programs aim to empower leaders to enhance Streamlining performance reviews in HR- involves
team performance, foster a positive company culture, and leveraging technology to enhance efficiency and objectivity w’c means
contribute to achieving organizational objectives. implementing user-friendly performance management software can
automate the evaluation process, provide real-time feedback, and
Important Manager Training Topics facilitate goal tracking.
1) Effective communication skills Example: Use of google forms.
2) Sustaining peak performance without burning out
3) Leadership styles and strategies 5. Wide range of topic/areas included
4) Conflict resolution and mediation Examples:
5) Performance management, goal-setting, and feedback  The employee’s quality of work and ability to meet
6) Time management and prioritization particular metrics.
7) Diversity and inclusion  Dependability and punctuality.
8) Change management  Leadership, communication and team skills.
9) Conflict of interest and ethical decision-making  Progress made towards personal career goals
10) Strategic thinking and problem-solving  Innovation and problem-solving skills
11) Financial acumen

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4 Performance Review Mistakes To Avoid

1) Not Informing Employees About the ‘Big Day’
2) Focusing Only On the Negatives
3) Dominating The Conversation
4) Absence of goals and plans

1. Not Informing Employees About the ‘Big Day’

This is one of the most terrible mistakes one could make
with regards to performance reviews.
Why is informing the employee important?
Informing employees about their performance review day is crucial because it allows
them to prepare mentally and professionally. It helps reduce anxiety and ensures
they can gather any necessary documents or evidence of their work. This
preparation leads to a more productive and meaningful discussion during the
review. Additionally, it shows respect for the employee's time and effort, fostering a
sense of trust and transparency. Overall, proper communication about the review
day leads to a fairer, more effective performance evaluation process.

2. Focusing Only On the Negatives

♥ Never assume that employees don’t need to hear about the
things that they do well.
♥ They absolutely need to know what/where they are doing well
and what/where they are not doing well.
♥ Give them meaningful feedback where they are appreciated for
their good work and point out their mistakes.

3. Dominating The Conversation

A review meeting should be a two-way street, with efforts being
made by both the parties.
♥ Supervisors should not dominate the conversation and prevent
employees from sharing their inputs.
It is important to recognize that both of you have completely
different perspectives.
♥ (Listening is understanding. Both supervisor and employee
should be active listeners and discover various reasons behind
both good and bad performance. If you don’t allow the
employees to provide self-evaluation and go on with your
assumptions about their performance, the very purpose of
performance reviews will be lost.)

4. Absence of goals and plans

A performance review is not only about reviewing the past
performance of employees. It is also about setting goals for the future
and helping employees improve themselves based on past reviews.
Having no goals or follow-up plans after performance review is simply
bad form and negates the purpose of a review.
A good performance management system:
♥ fosters communication and collaboration instead of just focusing
on competition.
♥ motivates employees to share information, assist in highlighting
activities that make certain individuals successful and use them
as a reference for the rest of the workforce