 ED 224 - HUMAN RESOURCE MANAGEMENT

 Professor: Dr. Armando Gabion

 Reporter: Marissa B. Juelar

 VI. PERFORMANCE MANAGEMENT

 1) What is Performance Management?
 2) Quality Management System
1) What is performance Management?
 Performance management is the strategic and systematic process of improving employee
performance by setting clear expectations and providing ongoing feedback and
development opportunities. This type of management is cyclical and replaces the once-a-
year annual performance review or evaluation. Performance management meetings
typically occur between a supervisor and a subordinate. Companies can choose different
ways to implement their performance management frameworks.
The performance management cycle
The performance management cycle is an ongoing process. In human resources (HR), it
often consists of four main phases: planning, monitoring, evaluating and reviewing, and
rewarding and adjusting. Following a systematic approach establishes a repeatable
mechanism for ongoing staff performance enhancement.
 1. Planning
The first phase, planning, involves setting SMART (specific, measurable, achievable,
relevant, time-bound) goals and objectives for the upcoming performance period. This
is done in collaboration with your employee and considers their strengths, weaknesses,
and areas of improvement.
2. Monitoring
The second phase, monitoring, involves tracking employee progress toward the goals
and objectives set in the planning phase. Check-ins and performance reviews help
monitor this step.
3. Evaluating
The third phase, evaluating, involves assessing the employee's overall performance for
the entire cycle. This includes looking at their successes and areas they can improve.
 4. Adjusting and rewarding
The fourth and final phase, adjusting and rewarding, involves making changes to the
goals and objectives for the next performance cycle based on learnings from the previous
one. This ensures the process constantly evolves and grows along with your employees.
You also want to reward employees so that everyone is happy. The reward can be
financial, positional, recognition-based, or increased responsibility. When you personalize
rewards based on what’s important to the staff member, you’ll maximize their motivation.

A modern performance management approach

Organizations increasingly recognize that annual appraisals are no longer an effective
way to measure and manage employee performance. Many organizations are moving
away from the traditional appraisal process, focusing ofeedback and development.
Successful strategies require a culture of trust and transparency. Staff needs to be brought
within the process to collaborate in performance management. Here are some modern
performance approaches:
 360-degree feedback: One popular alternative to annual appraisals is using 360-degree
feedback. This involves collecting feedback from an employee's colleagues, direct reports,
and clients to get a well-rounded view of their performance. Feedback like this is valuable
when helping employees identify improvement areas and set development goals.
Individual career planning: Employees are increasingly encouraged to chart their career
courses and take responsibility for their development. This helps the staff seek ways to
improve their skills, become more valuable, and create a learning-focused work culture.
Coaching: Another popular alternative to annual appraisals is coaching. This involves
regularly working with a coach or mentor to improve performance and attain goals.
Coaching is an effective tool to help employees develop new skills and behaviors. You can
tailor coaching to meet individual needs.

What Is Strategic Performance Management?

Strategic performance management is defined as the methodology to improve performance
measurement, monitoring, and improvement to achieve overall organizational objectives.
Check-ins: Check-ins are another tool you can use instead of annual appraisals.
These involve regular, informal conversations with your employees to check
progress, give feedback, and provide support. They focus on high-frequency changes
in behavior and attitudes.

 What Is Strategic Performance Management?

 Strategic performance management is defined as the methodology to improve

performance measurement, monitoring, and improvement to achieve overall
organizational objectives.
Strategic performance management is often practiced using the balanced scorecard
framework, which matches employee performance to financial success, customer
satisfaction, internal process efficiency, and organizational capacity optimization.
Mercer’s recent survey Opens a new window of 1,154 HR leaders found that only
2% of companies currently achieve “exceptional value” from their
performance management systems. This could be due to an inordinate focus on
individual employee goals without adequate alignment with organizational targets.
Mercer found that 83% of companies follow individual goal setting, but
these are tied to business unit goals in 56 percent; of cases.
This is where strategic performance management comes in. It places a keen focus
on organizational strategy and how it is being fulfilled through employee
performance and improvements in workforce capabilities. By adopting strategic
performance management, you can bridge the gap between on-ground performance
and high-level business transformation more effectively.
You could look at many variants of performance management, such as formal/annual
performance management, continuous performance management, and agile
performance management. Strategic performance management is among the most tried
and tested tactic that’s been popular among large organizations such as Unilever and
P&G.
To clearly understand the concept of strategic performance management, you need to
take a closer look at the balanced scorecard approach.

What exactly is a balanced scorecard?

Simply put, a balanced scorecard is a popular strategic perform driver that positions
individual employee performance at the intersection of four key facets:
 1. Financial:
How is an employee contributing to company revenues? How does employee
performance directly correlate to movement in share prices by improving business
outcomes?
2. Customer:
Has customer satisfaction ratings (CSAT) improved as a result of employee
performance? Do other indicators of customer success (net promoter score, customer
lifetime value, churn, etc.) show an uptick? Has the company successfully acquired a
new customer base?
3. Internal:
How did employee performance make internal processes more efficient and effective?
Did an employee excel in a particular process? Was employee participation
instrumental in bringing about meaningful internal transformation?
 4. Capacity:
Has the capability of the company undergone a change due to employee efforts? Has the
company become more scalable with a greater production capacity? How many new
innovations have been introduced and adopted in the measurement period?
Employees are rated on these four parameters and the cumulative result indicates their
overall performance score. Some companies follow a numerical 1 to 5 system, one
being entirely below the expectations and five being significantly over-reaching the
expectation. Others might follow a descriptive format, assigning values like “needs
improvement,” “met expectations,” and “above expectations.”
By planning each employee’s performance along these four parameters as it correlates to
the overall company’s performance, you can make sure that your employees
successfully deliver on the near- and long-term goals of the company.
Of course, every performance metric must be communicated clearly to employees,
keeping in mind each employee’s capability and capacity, and ensuring alignment at
very early stages to ensure a clear expectation setting.
 Key Components of Strategic Performance Management
Once you are clear on your organizational objectives and how they relate to individual
talent/output, you need a strategic performance management system that can align these
elements and help to orchestrate them smoothly. This system will comprise:
● A goal-setting and identification tool: Allows C-level executives and business
leaders to study trends, perform forecasting, and set tangible goals for the company
● Outcome-oriented system: Monitors organizational performance and growth in line
with the goals that are already set; can cover the four elements of the balanced scorecard
● Workforce segmentation: Segments employees into groups based on performance
parameters for easy monitoring and alignment.
● Employee-level performance management: Tracks employee performance
continuously with respect, empowers regular feedback, and supports check-ins
● Seamless integration: Enables integration of employee performance management
systems and organizational KPI dashboards for alignment of data
● Effective communication: Provides an internal marketing, communication, and feedback
mechanism to widely share C-level goals with the entire workforce, encouraging self-
improvements.
Equipped with these components, a strategic performance management system can
accelerate individual improvements while constantly moving in tandem with the
holistic organizational direction. For example, if a company is looking to venture into
new areas, the workforce can quickly upscale to meet the requirements and unlock the
business opportunity at hand.
Employees are rated on these four parameters and the cumulative result indicates their
overall performance score. Some companies follow a numerical 1 to 5 system, one
being entirely below the expectations and five being significantly over-reaching the
expectation. Others might follow a descriptive format, assigning values like “needs
improvement,” “met expectations,” and “above expectations.”
5 Steps to Launch a Successful Strategic Performance Management Plan
A look at the six elements described above suggests the core premise underlying
strategic performance management. In order to pivot your employees towards a highly
outcome-focused plan, here are the steps to creating and launching a multi-layered
process for successful strategic performance management.

1. Collaborate with every tier of leadership

A good strategic performance plan begins with accurate and attainable goals. Once
these high-level goals have been identified, you can collaborate with business unit
leaders, managers, and ground-level employees to break down each goal into its
actionable parts and ensure that each stakeholder understands their accountability.
For instance, revenue growth targets might entail alignment with hiring, leads, and
sales targets, employee productivity in each team, and so on. To ensure effective
execution, you will need to collaborate with the leaders/managers of individual teams
to clearly convey the hierarchy of goal setting as per the organization’s annual targets.
 2. Implement the right performance management tools
Technology can be a massive help when transitioning to strategic performance
management for the following reasons:
● It integrates multiple layers of data to offer a 360-degree employee
performance view
● It ensures transparency in performance evaluation without any bias or
ambiguity
● It maintains a searchable record of employee performance for compliance
● It highlights trends for succession planning and leadership potential
identification
● It auto-generates performance reports for feedback and improvement
Most performance management software available in the market is compatible
with goal setting, progression tracking, and continuous feedback.
 3. Conduct change management sessions
Employees may not be able to switch to strategic performance management easily.
That’s why HR needs to deploy a robust change management practice, acclimatizing
employees with the new system, ironing out any bottlenecks, and ensuring that an
outcome-focused culture is in place.
Remember, a high-performance culture (that’s not toxic) is at the cornerstone of the
success of strategic performance management. You need to outline the organization-
level targets that employees are striving for, and why they matter to them personally.
This step might involve rigorous manager training so that they can motivate and
mobilize the workforce effectively.

4. Reward employees and incentivize performance

A big part of strategic performance management is linking individual
accomplishments to a tangible reward/compensation element.
In most companies, the framework is linked to annual appraisals (which can be
broken down into quarterly MBOs), where an employee’s performance in terms of
financial wins, customer acquisition, internal efficiency, and capacity improvement
leads to a salary hike or promotion. Companies can even define their own balanced
scorecard, with parameters such as teamwork, innovation, or culture-add.
In the short-term, you can incentivize performance through rewards or even non-
monetary recognition in a social setting. However, long-term performance uptick
must necessarily be linked to compensation.

5. Review performance and deploy L&D measures

To improve performance and bring it consistently closer to the desired goals, you
need to invest in talent development through learning and development opens a new
window program. Targeted and strategic learning programs ensure continuous
employee improvement, especially in high-demand areas that are key to
organizational success.
Measures could range from hands-on learning for hard skills to executive coaching for soft
skills, and niche training (diversity & inclusion, emerging technologies like XR, etc.).
Learning progress should be regularly tracked to ensure alignment with a strategic
performance management plan, pivoting as necessary in an agile model.

7 Strategic Performance Management Best Practices to Follow

1. Encouraging continuous learning among the workforce
To successfully meet organizational goals, every employee must realize their true potential
and advance their career trajectory within the company. This requires continuous learning
as part of the workflow, aided by digital enablers such as mobile learning and nudge alerts.
2. Checking for buy-in at regular intervals
In a dynamic organization, high-level goals and employee-level understanding of targets
might undergo change quite frequently. That’s why the strategic performance management
plan needs to be revisited/fine-tuned every quarter to ensure steady alignment.
 3. Taking advantage of sophisticated analytics
A cutting-edge strategic performance management system is incomplete without data
analytics. It unearths insights from employee performance records, highlighting how people
assets could be better leveraged. You can combine analytics with a natural language
processing engine, so that non-technical business leaders can explore the data easily.
4. Putting in anti-bias checks and balances
There is always a risk of bias creeping into your performance evaluation, and strategic
performance management is also open to this risk. Consider for example, an employee who
was on paternity leave and could not meet the team productivity average. The requisite
checks and balances will ensure an objective review, considering all factors.
5. Improving your decision-making systems
Without the right roles in place, strategic performance management is doomed from the
start. This makes accurate and data-driven decision-making absolutely critical, equipping
company leaders with a predictive view of company growth – which brings us to the next
best practice.
 6. Promoting a data-driven culture
A data-driven culture empowers employees to track their own progress, self-review,
and share performance insights with their peers. It means that there is a culture of
pervasive intelligence opens a new window in place, where data analytics interfaces
are democratized for pan-organizational access.
7. Allocating an incubation period for ROI
Remember, a strategic performance management system won’t start to show results in
the first quarter of implementation. The chances are that it might take an entire year to
find resonance with your workforce and the company’s culture. It is advisable to
allocate an incubation period before expecting an uptick in organizational growth, so
as to avoid sunk costs.
 2) QUALITY MANAGEMENT SYSTEM

What is Quality Management System?

A modern quality management system is a workflow-based software platform that
delivers a centralized means for tracking, managing and controlling product quality.
Additional elements, including sensors and other hardware and software
components, feed critical data from the manufacturing lifecycle into the QMS.
Prioritizing quality within the overall PLM strategy will drive an array of positive
business outcomes.
A quality management system (QMS) is a collection of business processes and
procedures that help ensure the products and services meet customer expectations
and quality standards12345. It is a set of internal rules that are defined by a
collection of policies, processes, documented procedures, and records4. The system
defines how a company will achieve the creation and delivery of the products and
services they provide to their customers.
What is the purpose of a quality management system?
More specifically, the purpose of a QMS is to centralize, integrate, and automate an
array of data streams and work processes critical to safeguarding and advancing
product quality. These may include document control, audit management, supplier
quality, non-conformance tracking, corrective action, and even risk management. Most
QMSs are also designed to facilitate and continuously improve ongoing training
processes.

The benefits of quality management systems

By formalizing and centralizing all the business processes required to continuously
improve quality throughout an organization, QMSs generate a myriad of benefits to
manufacturers and their customers, most critically the ability to more consistently
meet the customer's requirements.
 1. Improved quality
The first and most obvious benefit is improved product quality, which in turn feeds a higher-
quality customer experience overall. The downstream effects of this include the reputational
strength that accrues over time as a manufacturer consistently delivers fully compliant orders, on
time and on budget. A QMS also provides the ability to track quality and control related workflows
to specific standards, which is also necessary to meet compliance in more regulated industries.
2. Reduced costs
Sub-optimal quality management is expensive – and it’s an unnecessary expense. A QMS that
properly streamlines relevant manufacturing processes can drive down these costs. Higher first-
pass yields, reduced rework, less scrap, and fewer field failures all bolster financial performance
and improve customer satisfaction.
3. Increased communication and collaboration
A sound approach to QMS deployment starts with a single source of real-time information,
accessible to every stakeholder when and where they need it. The QMS’ centralization and
automation of quality data and activities across an enterprise eliminates internal friction,
streamlines collaboration, and allows for lessons learned to be applied systematically across a
product portfolio.
 4. Identification of future training opportunities
Regardless of how much time and energy is invested in improving quality
management systems, the “human factor” can introduce unpredictable variables and
inconsistent processes, absent effective staff training. A QMS can improve
employee training, ensuring appropriate and sufficient instruction in the context of
an employee’s role, education level, location, and department.
Furthermore, a well-provisioned QMS will provide the ability to track the results of
proficiency tests so you can keep your staff well-calibrated to the needs of the
system, individually and as a team, and to show compliance to regulatory training
standards in your industry.
5. Prevention of risks and mistakes
Effective risk management is a critical aspect of quality control. Risk-based
decision making is essential in quality control and can be an effective tool for
determining whether a body of work has adequately reduced the risk of a given
approach. Your QMS should enable the development of risk management tools
within any process, such as decision trees, risk matrices, and bowtie analyses.
What are the different types of QMSs?
As an enterprise considers its approach to quality management, many different types of
QMSs exist to address the needs of the particular business and its goals. However, the
difference in these systems usually comes down to the inclusion of industry-specific
tools and processes that are required to meet regulatory compliance or customer
expectations – more on that to come. It’s also important here to distinguish between
two principal approaches to managing quality: quality assurance and quality control.
Quality assurance is the preparation and establishment of a systematic approach to
quality that is used internally and shared externally with customers and other third
parties to provide confidence that the product or service will meet expectations and/or
regulatory standards. Quality control, on the other hand, is the reactive process by
which goods and services are inspected, that data is analyzed, and, if necessary,
changes are made to ensure that products and services indeed meet said requirements.
What are the main elements in a QMS?
The main elements of a QMS include an interdependent set of processes, tools, and metrics.
Each system will differ in its specific components and capabilities, as it’s tuned to the needs of
the business and customers. Among the most common elements subject to standardization,
centralization, and automation via QMS are the following:

a. Internal processes
Internal processes are under the most immediate purview of the manufacturer. Thus, they
often present the most immediate path to quality management per se, and the benefits in
speed, compliance, and agility that a QMS can fuel. Targeted functional capabilities within the
QMS address specific activities and are generally delivered by discrete modules integrated
within the overall system.
b. Corrective and preventative action (CAPA)
Corrective and preventative action processes are foundational to most QMSs. CAPA is
intended to enable the enterprise to rigorously investigate failures, determine their root causes,
and implement change management to prevent identified or similar failures in the future.
 c. Document control
Effective management of quality documents is also fundamental. The QMS must establish best
practices for the definition of document types and ensure that only correct versions of documents
are circulated and accessible to the right staff members.
Document control processes must also protect sensitive IP. Tracking of training, compliant
electronic signature capabilities, change control, and overall enterprise collaboration are all fueled
by strong document control systems within the QMS.
d. Control of records
The secure creation, collation, and control of secure, auditable records must also be handled in a
systematic fashion. This ensures that successful processes and practices can be replicated where
appropriate, and that the history behind any failures is complete and accessible as required.
e. Risk management
A strong quality management system, particularly when well-integrated within an organization’s
broader PLM strategy, helps manage operational risk across the entire product lifecycle. Failure
mode and effect analysis (FMEA) capabilities are central to risk analysis, management, and
mitigation, helping identify potential failure modes in a system, and their causes and effects.
 f. Control of nonconforming product
Non-conformance management within the QMS eliminates the time-consuming,
disconnected, and expensive manual processes that characterized an earlier era in
manufacturing. Users benefit from enhanced visibility across many potential
sources of quality issues and the actionable insights this provides.

Internal nonconformance
Internal nonconformance management targets issues related to manufacturing or
other internal processes, allowing these to be more quickly resolved than otherwise.
Root cause analyses, for example, can be coordinated with necessary PLM changes.

External nonconformance
Quality issues may also arise based on external nonconformances that originate
elsewhere in the supply chain, beyond the manufacturers’ direct control.
Thank you and God bless us all!