Unit- II:

Performance Management Planning: Introduction-Need-Importance-Approaches-The

Planning Process—Planning Individual Performance- Strategic Planning –Linkages to
strategic planning- Barriers to performance planning-Competency Mapping-steps-Methods.

2.1 Introduction

Performance Planning is a formal process in an organization discussing, identifying and

planning the organizational as well as individual goals which an employee can or would
achieve incoming appraisal or review cycle. It is a systematic and structured approach to
successfully achieve the desired goal of an individual or the through out the assignment year.

Definition

Performance planning may b e defined as systematic outlaying of the activities that the
manager is excepted to undertaken during a specified period so that he is able to make his
best contribution to development an organizational out comes - (“RAO”)

According to Armstrong performance planning defined expectations – the results to be

achieved and skills, knowledge expertise and capabilities required to attain these results .

2.2 Need of Performance Planning

The need or objectives of performance planning can be split at the following levels.

1. At Organization Level :
To clear define and communicate to employee’s organization vision, objectives,
strategies and performance goals .
 To boost motivation and self concept of the employees to ensure that
employee’s receives feedback on continuous basis.

2. At Manager Level :

To provide opportunity to the employee’s for joint goal setting .For greater
ownership and accountability.
 To provide on going on the job feedback.
 2.3 Importance of Performance Planning

The coaches or mentors in any organization work with performance plans or work plans to
keep their employees motivated. They operate with such plans in place for each and every
one of their team members to generate synergy.

The following points discuss the importance of performance planning which are given below:
 Performance planning helps in aligning the individual goals with the organizational goals
and the concept behind this is mutuality for survival and growth.

 This makes the process of performance management more accountable and objective.

 It focuses on key results area and key performance area which must be considered for
gaining the competitive edge.

 Performance planning helps in maximum utilization of resources and it is important to

make clear in the role and responsibilities of employees.

2.4 Approaches of Performance Planning

The key methodologies/approaches of setting up a performance criteria can be understood by

following points and are as follows:

1. Key Performance Area

2. Key Results Area
3. Tasks and Target Identification
4. Goal Setting Exercises
5. Organizational Objectives and Strategy
6. Assessment of Organizational Performance Needs
7. Setting Organizational Performance Expectations
8. Establishing Performance Management Process
9. Measuring Effectiveness of Performance Management
Key Performance Area
The key performance area for any employee includes the identification of priority area first.
After identifying this, subsequent working on the specified area is done. The process of key
performance area involves the following steps which are mentioned below:

 Identification of important tasks and activities.

 Determining the areas of priority.
 Setting goals in the identified area.
 Seeking the employee’s commitment to identified work.
 Making arrangements for required resources.
Key Results Area
The term key results area may be defined as general area of outcomes for which a role is
responsible and the major task is to identify them. Identifying KRAs helps individual
employees in a number ways as enumerated here:

 Clarify their roles.

 Align their roles to the organization’s business or strategic plan.
 Focus on results rather than activities.
 Communicate their role’s purposes to others.
 Set goals and objectives.
 Priorities their activities, and therefore improve their time work management.
 Make value-added decisions.
Tasks and Target Identification
It involves the identification of roles, responsibilities, tasks and key targets of the employees
and by identifying these, each and every employee should know their duties and key targets.

Goal Setting Exercises

An organization’s ultimate goals determine its strategy.

For example An organization intending to become the world’s largest textile company in the
shortest possible time which is ultimate goal of any organization, will increase its production
capacities either through organic route such as setting up new manufacturing facilities, or by
acquiring other textile organizations.
Since acquisition helps increasing production capacities quickly, the organization shall
pursue acquisition as a strategy for faster growth but acquisition strategy also involves
turning around the performance of the older acquired production units which essentially calls
for improving human performance for corporate success.

Organizational Objectives and Strategy

In order to understand organizational objective and strategy, we need to undergo various
points which are:

 The ultimate goal of organization.

 Its competitive position in market.
 To compare the organization’s strength with changing environment.
 To examine an organization’s critical issues.
 To analyze an organization’s opportunities.
 Exploring best approaches in view of organizational resources and competencies.
Assessment of Organizational Performance Needs
After identifying objectives and strategy, there is a need to assess performance criteria and
for this, the below mentioned steps should be carried out:

 Identifying competencies necessary for achieving organizational objectives and strategy.

 Gathering information about critical issues related to the purpose.
 Determining new and future performance needs of the organization.
 Prioritizing organizational improvement measures.
 Recognizing core organizational values.
Setting Organizational Performance Expectations
Once the assessment is over, one need to set performance expectations which can be done as
follows:

 Determining required vs. desired performance.

 Determining the current performance status.
 Understanding, aligning and agreeing on performance expectations.
 Formulating key performance indicators.
 Evolving job objectives.
 Aligning individual goals with organizational strategy.
Establishing Performance Management Process
For establishing performance management process, several steps mentioned below have to be
considered.

 Designing a framework of performance management encompassing.

 To implement performance planning.
 To manage the performance.
 Conduct performance appraisal.
 Monitoring the performance.
Measuring Effectiveness of Performance Management
 Identifying opportunities for performance development against which effectiveness will be
measured.
 Providing performance counseling including 360-degree feedback as per the requirement.
 Devising reward strategy and administering a reward system properly § Establishing
performance management audit.
 Improvement in the competitive position of the organization.

2.5 Process of Performance Planning

There are many advantages to both supervisors and employees in having an effective
performance planning and review process and the process should identify clearly what is
expected of the employee, which in turn provides the opportunity to recognize good
performance and identify areas that need corrective action or added training. Four areas that
must be identified in a performance plan are:

1. Job responsibility: What has to be done?

2. Performance measure: How will this be checked or measured?
3. Performance standard: How well must it be done?
4. Target date: When will it be checked?
While building a performance plan, you need to obtain information in these areas from the
job description and you would also look to the organization needs to clarify which duties
have priority and the standard they must be performed to.

An effective performance plan should outline results expected, performance measures,

standards to be achieved and target dates for measurement.

The following are the key components of the performance planning process:
 Preparation of Performance Plans
 Identification of Key Success Factors
 Setting Departmental and Individual Objectives
 Providing Regular Feedback
 Performance Review
 Action Planning
Process of Performance Planning

Preparation of Performance Plans

Performance plans are usually prepared at the beginning of the annual review period, or when
an employee first starts their new job. When preparing for the initial planning, the meeting
should be undertaken by both the supervisor and the employee.

Both the supervisor and employee should be reviewing the goals, objectives and needs of the
work unit and looking at the current job description and the supervisor should list the things
in the job that they intend to measure, and the standards you will measure to. The employee
could write down the ways they think each of their tasks. It could be measured and how well
each should be performed.

Identification of Key Success Factors

When identifying key success factors, the performance objectives and results to be achieved
should be focused on results. They are set in order of priority. The measures should be
specific to each task, with clear standards which include dates and times when appropriate.

Setting Departmental and Individual Objectives

After setting the organizational goals and objectives, the next task is to define departmental
goals and objectives. The departmental objectives are further categorized into individual
goals which include the key duties and responsibilities to achieve the final goals of the
organization.

Providing Regular Feedback

The next step in the process is providing regular feedback where the supervisor should be
maintaining a log of performance facts, which will ensure that important issues are given the
attention that is required and will help the formal review proceed in a more focused and
potentially more positive way. The employee should also maintain a record of
accomplishments and special achievements, or issues that need to be resolved and discussion
of these things during scheduled or spontaneous feedback sessions will allow resolution of
problems in a timely manner.
Performance Review
Reviewing performance gives the supervisor and the employee the opportunity to look at
results that have been achieved in relation to the original plan. Accordingly, the standards of
performance were established. At this meeting, you should review all performance records
and assess each task.

Along with this, discussing whether they met the standards of performance or not and
whether they exceed those standards. When review any outside factors that may have had an
effect on performance.

At this time, the supervisor should be identifying any areas where improvement may be
necessary or performance could be enhanced and the employee should also have the
opportunity to discuss areas where they could have used more help.

Action Planning
Action planning is another important aspect to completing this cycle. This is where the
supervisor and employee would plan for any training that needs to occur. It could also be
where we discuss career planning.

2.6 Planning Individual Performance

One of the keys to successful strategic plan implementation lies in specifically linking the
performance of every individual employee, every stakeholder, to the plan itself.

 The Individual Performance Plan (IPP) feature of We Plan Well gives users the ability to
easily identify, track and measure performance goals for everyone with responsibilities
connected to the plan.
 It can also serve as the complete Individual Performance Management system for the
entire organization.

With the IPP feature in We Plan Well you can:

 Easily align employee performance goals with Strategic Plan goals: each employee
can instantly download their strategic plan responsibilities directly into their
individual plan.
 Export plan documents, assessments and reports in several formats for easy copying
and presentation.
 Update any element of the plan and immediately find the change reflected in all
reports and assessment options.
 Expand the IPP to reflect strategic plan responsibilities as well as day-to-day job
requirements and individual development goals.
The Individual Performance Plan feature offers a tool you can use to assure that your
organization's time and energy is focused on the highest level priorities of the plan. IPP is just
one of the innovative features offered by We Plan Well, which can help transform your
Strategic Plan into strategic performance.

2.7 Strategic planning

Strategic planning is a process in which an organization's leaders define their vision for the
future and identify their organization's goals and objectives. The process includes
establishing the sequence in which those goals should be realized so that the organization can
reach its stated vision.

The steps in the strategic planning process

Step 1: Determine Organizational Readiness

Set up Your Planning Process for Success – Questions to Ask:

 Are the conditions and criteria for successful planning in place at the current time? Can
certain pitfalls be avoided?

 Is this the appropriate time for your organization to initiate a planning process? Yes or
no? If no, where do you go from here?

Step 2: Develop Your Team & Schedule

Who is going to be on your planning team? You need to choose someone to oversee the

implementation (Chief Strategy Officer or Strategy Director) and then you need some of the

key individuals and decision makers for this team. It should be a small group of

approximately 12-15 persons.

Step 3: Collect Current Data

Collect the following information on your organization:

 The last strategic plan, even if it is not current

 Mission statement, vision statement, values statement
 Business plan
 Financial records for the last few years
 Marketing plan
 Other information, such as last year’s SWOT, sales figures and projections
Step 4: Review collected data:
Review the data collected in the last action with your strategy director and facilitator.
 What trends do you see?
 Are there areas of obvious weakness or strengths?
 Have you been following a plan or have you just been going along with the market?

Importance of strategic planning

Strategic planning is necessary to determine the direction of your organisation. It focuses
your efforts and ensures that everyone in the business is working towards a common goal. It
also helps you:

 Agree actions that will contribute to business growth

 Align resources for optimal results
 Prioritise financial needs
 Build competitive advantage
 Engage with your staff and communicate what needs to be done

2.8 Linkages to Strategic Planning

2.9 Barriers to Performance Planning

Organizational Barriers
Most of the traditional organizations are not in favour of performance planning. According to
this concept, the organizations spending time on performance planning is just a wastage of
time. These organizations believe that they have a strong implementation strategy and due to
this only, it becomes the barrier.

 For example, The Indian companies tend to spend 30% time on planning and
remaining 70% on implementation whereas the MNCs usually spend 70% time on
performance planning and the remaining 30% time on strategy implementation.

Individual Barriers
The lack of commitment in the organization’s employees or management is another important
barrier to performance planning. Sometimes managers or employees or both show less
commitment towards the achievement of organizational goals and the reasons could be
personal, organizational, competitive or any other HR factor.

2.10 Competency Mapping in Performance Management Planning

Competency mapping is the process of determining the skills, behaviors, abilities and
knowledge a job title requires. Organizations often begin this process by determining their
goals and analyzing the abilities of their existing employees. Then, they clearly define the
expectations they have for each position and ensure employees have the necessary skills to
succeed in their roles.

For instance, competency mapping for an information technology specialist might reveal the
importance of communication, problem-solving skills and proficiency in relevant operating
systems.
Competency Definition: Competency is underlying characteristics required to perform a
given task, activity or Competency has the following forms-knowledge, skills and attitude –
(Gomes 2007)
Competency Mapping Definition: It is a process of identifying key competencies for a
particular position in an organization and then using it for job evaluation, recruitment,
training and development, performance management, succession planning which results in
talent induction, management development appraisals, and in identifying training needs.

Importance of Competency Mapping

Optimized employee performance

Because competency mapping involves the evaluation of current employees, you can identify
existing strengths and weaknesses in your organization. This information allows you to
optimize employees' potential by assigning them to tasks where they have the highest chances
of success.

Improved productivity

Competency mapping often more narrowly defines roles within an organization. This
specialization ensures employees can focus their talents on the most relevant tasks and rely
on peers for support related to their expertise.

Streamlined hiring process

An organization with clearly defined roles may experience a streamlined hiring process. It
can use its competency mapping to write thorough job descriptions and attract talented
employees with the appropriate qualifications.

Increased morale

Competency mapping can increase morale by outlining expectations and ensuring employees
understand how to achieve good evaluation scores. Employees may also find it easier to ask
supervisors for support when both parties are aware of expectations.

How to perform competency mapping

1. Identify the organization's goals

An organization can begin the competency mapping process by identifying its goals. It can
review its mission statement or meet with senior executives to understand the larger goals
that employees are trying to achieve. This step allows the process to build a good foundation,
identify smaller goals that employees strive for daily and clarify any confusion about the
organization's objectives.
2. Analyze competencies of existing employees

By analyzing the skills of existing employees, an organization can create outlines for
competency maps and identify opportunities for improvement. One useful analysis method is
self-evaluation, as employees have a unique perspective on their skills and can highlight them
as they relate to their roles.

3. Define competencies

Once an organization understands what employee goals are and what skills are necessary for
achieving them, it can define competencies for each job role. Consider listing important skills
and relating them to essential duties. For instance, the competencies of a product designer
might include communication and negotiation to facilitate positive client relationships.

4. Determine metrics

An organization can more clearly define competencies by assigning metrics to them. A

common example of a metric is a sales quota that indicates an employee's performance
expectations. While a sales quota is just a number, it closely relates to competencies like
interpersonal skills, negotiation and active listening.

5. Provide additional resources

Throughout the process of competency mapping, organizations may recognize employee

demand for additional resources. Departments might require more training or upgraded
equipment to adequately perform their duties.

6. Implement results of competency mapping

After an organization clearly defines roles through competency mapping, it can share results
internally and externally. For instance, it might incorporate the findings into job descriptions
to attract suitable candidates. Organizations can also share the results with employees so that
they can prepare for performance evaluations.
Steps in competency mapping

1. Conduct a job analysis

A job analysis is usually done by asking employees to complete a position information

questionnaire (PIQ) or using this questionnaire to conduct one-to-one interviews. This helps
HR professionals analyze existing employees’ skills and highlight how employees relate to
their roles. Supervisor evaluations and reviewing employee work history can help to give an
unbiased perspective of performance.

2. Identify core competencies

The data from the job analysis can be analyzed to identify the core competencies required for
each role in the organization. This should include knowledge, skills, behaviors, motives, and
ambitions. You can match each of these to the daily responsibilities of each role.

3. Define proficiency levels

As we explored earlier, each competency should have a scale that helps you assess how
competent someone is within each competency. It’s common to have three to five proficiency
levels, e.g., basic, intermediate, advanced, and expert. What knowledge, skills, behaviors, and
experience are required at each of these levels for each competency?
4. Validate the competencies

The next step in the competency mapping process is to validate the identified competencies
by seeking input and feedback from subject matter experts, managers, and employees in the
respective roles.

5. Organize the competency framework

The competencies required for a specific role or function come together to form a
competency model. This model provides a tangible framework for performance management,
skill gap analysis, and development and provides a template for what the ideal organization
and professional will look like.

6. Document the competency descriptions

Write clear and concise descriptions for each competency. Include behavioral indicators or
examples that illustrate the expected performance for each competency at different
proficiency levels. This helps individuals understand what each competency entails.

7. Integrate into HR processes

The final step of the competency mapping process is to embed the competency map into
various HR processes. This means incorporating competencies into job descriptions and
performance evaluations, assigning metrics to measure each competency, or deciding on
additional resources or training needed for specific employees or departments so they can
perform better in their roles.

Methods of Competency Mapping

 Interviews
 Group work
 Task Forces
 Task Analysis workshops
 Psychometric Questionnaire
 Use of Job descriptions
 Performance Appraisal Formats etc.