Performance

Management
[Link], ASSOCIATE PROFESSOR
DEPARTMENT OF MANAGEMENT STUDIES
Performance Management: Meaning

► Performance management is a tool that helps managers monitor and

evaluate employees' work. The goal of performance management is to
create an environment where people can perform to the best of their
abilities and in alignment with the organization's overall goals.
Performance management is widely used in both the private and public
sectors.
► For example, the manager of a sales department can give staff
members target revenue volumes that they must reach within a set
time period. In a performance management system, along with the
numbers, the manager would offer guidance gauged to help the
salespeople succeed.
 Goals
The goals of performance management are to help employees perform at their best and align
with the organization's goals. Performance management goals include:
●Setting expectations: Employees should be clear about what's expected of them and what
they can gain by meeting those expectations.
●Providing feedback: Real-time feedback helps employees learn, improve, and grow.
●Encouraging accountability: Managers can reinforce accountability to help employees meet
their goals.
●Aligning goals: Make sure everyone knows where they're going by setting company-wide
goals and planning how they'll trickle down to teams and individuals.
●Recognizing performance: A strategic recognition program can encourage consistent high
performance.
●Collaboration: Set goals to improve team dynamics, communication, and trust.
Performance management can help businesses achieve their goals and objectives. For example,
if a business objective is to grow revenue, effectively managing the performance of sales
employees can help.
who is Involved and Approaches

► The people involved in performance management are managers and

employees:
► Managers
► Provide feedback, set goals, and monitor performance. They also provide
support and coaching when needed.
► Employees
► Set goals, receive feedback, and work with their managers to achieve
organizational objectives.
► Performance management is a process that involves ongoing communication
between managers and employees. It helps employees be more invested in
their work, which can lead to higher productivity and lower turnover.
 Approaches

Here are some performance management approaches:

●The 4 Ps
This approach involves planning, performing, progressing, and post-evaluating. The plan involves setting objectives, the perform step
involves executing tasks and tracking progress, the progress step involves ongoing assessment and feedback, and the post-evaluation step
involves reviewing outcomes and planning improvements.
●Continuous performance management
This system can help modify and update goals based on the performance of the employee, team, and organization.
●360-degree feedback
This approach involves incorporating feedback from multiple sources, including peers, subordinates, and supervisors. This provides a
holistic view of an employee's performance.
●Performance appraisal
This process involves assessing an employee's job performance against established goals and expectations.
●Human resource development
This approach can help management roll out the best training and learning program.
●Rewarding performance
This approach involves recognizing employees' contributions.
●Employee engagement
This approach is based on trust, integrity, two way commitment, and communication between an organization and its members.
Performance Management Vs Appraisal
Performance Management Performance Appraisal

Performance appraisal evaluates the actual

Performance management is about actually
performance of the employee, but it does not
helping an employee to develop and increase
focus on the employee’s performance
his performance and productivity.
productivity.
Performance management looks at an Performance appraisal evaluates the
employee’s performance keeping in mind the employee’s performance based on how he has
present and the future. performed in the immediate past.
Performance management proactively
Performance appraisal only looks at the
manages an employee’s performance and
employee’s performance objectively for the
ensures that the employee has accomplished
year and give a final feedback to the
all the goals, vision, mission and the core
employee.
values of the organization.
Performance management has a holistic
approach that evaluates the relationship Performance appraisal is individualistic in
between the employee and the organization nature and pertains to the employee and his
and examine ways in which past performance.
employee engagement can be fostered.
 Performance Management Vs Appraisal

Performance management is strategic in the sense A performance appraisal system is operational

that it is constantly measuring an employee’s because it follows certain protocol for performance,
performance and formulating new strategies for the and it focuses only on the result of the employee’s
employee’s development. performance.
Performance appraisals are very linear in terms of
Performance management is very dynamic
the communication because it has a very top down
because it involves a lot of dialog between the
approach towards employee performance. There is
employee and the senior managers. There is more
a discussion that takes place only after the
room for discussion in performance management.
performance appraisal process.
Performance management is future oriented Performance appraisal is very retrospective in the
keeping in mind the strategies required for sense that it looks back on past events and
maintaining the employee performance for the next situations. It looks at an employee’s performance
year. Performance management finds ways to over a period. Performance appraisal is very past
improve employee performance. oriented.
 Performance appraisal system facilitates
Performance management is a continuous ongoing
performance appraisals only once or twice a year.
process by giving real time instant performance
There is a performance management tool for
reviews. Luckily, with the advent of an employee
appraisals, feedback happens in a periodic manner
performance management software, there is a
during appraisals, but the feedback may not focus
performance management tool that has a
on development. Typically, the discussion during
continuous feedback mechanism for effective
appraisals revolves around justifying the rating and
performance management.
feedback.
Performance appraisal on the other hand, has a
Performance management has a qualitative and quantitative approach towards an employee’s
quantitative approach in the sense it has ratings performance. In an employee performance
and more continuous feedback. If an organization management software, performance appraisals
has an employee performance management use rating scales to evaluate employee
software, then performance management is usually performance. There is minimal scope for constant
in the form of comprehensive feedback given to the feedback. The ratings are the only final
employees and their performance. measurement that is used for performance
appraisal.
Performance appraisal system facilitates
Performance management is a continuous ongoing
performance appraisals only once or twice a year.
process by giving real time instant performance
There is a performance management tool for
reviews. Luckily, with the advent of an employee
appraisals, feedback happens in a periodic manner
performance management software, there is a
during appraisals, but the feedback may not focus
performance management tool that has a
on development. Typically, the discussion during
continuous feedback mechanism for effective
appraisals revolves around justifying the rating and
 Significance of Building a Performance Culture in Organisation

●Promote accountability and ownership

●Support business growth
●Enhance employee experience
●Improve employee performance, productivity, and engagement
Organizations with a strong culture tend to have systems that promote these outcomes.
Some strategies for building a performance culture include:
●Defining the organization's purpose
●Prioritizing effective communication and leadership
●Creating robust performance management processes
●Reinforcing positive behaviors and actions
●Clarifying purpose and values
●Empowering employees
●Collecting feedback
Performance Management Cycle: Plan,
Review, Develop and Reward
Principles of Performance
Management

► Clear goal setting

► Continuous feedback
► Objective measurement
► Development training
► Recognition and reward
► Employee involvement
► Alignment with organizational goals
► Data driven insights
► Customization
► Managerial training
 Unit-II Performance Goal Setting
Basic Concept

► Collaboration
► Professional growth
► Self-management
► Soft skills
► People management
► Problem-solving
► Creativity and innovation
► We also present examples of goal methodologies, including:
► SMART Goals
► OKRs
► Locke and Latham’s 5 Principles
► BHAG
► Goal Pyramid
Performance Planning and Goal

Performance planning is a strategic process that helps ensure

employees meet an organization's goals. It involves:
•Setting goals: Defining clear, measurable, achievable, relevant, and time-bound
(SMART) goals for employees
•Creating a plan: Developing a plan to help employees meet their goals
•Outlining expectations: Clearly defining performance expectations, standards, and
responsibilities for each role
SMART goals are a popular method for performance management because they help
employees understand how their work contributes to the company's goals. They also
help employees prioritize tasks and stay motivated.
Here are some steps for writing a performance improvement plan (PIP):
[Link] performance issues
[Link] clear and measurable goals
[Link] an action plan
[Link] check-ins and evaluation criteria
[Link] and communicate the PIP
Setting in the Context of Organisational Goals

► INcrease productivity
► Boost employee engagement
► Effective goals can help employees thrive and contribute to the
organization's long-term success.
► Provide a clear direction
► Well-defined goals can promote motivation, accountability, and a sense
of accomplishment.
► Communicate the company's prospects
► Make goals specific, measurable, achievable, and time-bound
► This is known as the SMART goal framework.
► Align goals with organizational objectives
► This ensures that everyone's efforts are contributing to the collective vision.
► Involve employees in setting goals
► When employees help set goals, they better understand what success looks
like.
► Break down goals to the individual level
► This can help maintain accountability from leadership to individual team
members.
The Cascading Effect to Individuals

► Cascading goals are defined as an organizational structure that aligns a company’s goals
across multiple levels.
► Within this structure, there is traditionally an ascension and descension of roles, tasks, and
objectives.
► All of these goals contribute to the overall strategic direction of the organization. Typically,
the main strategic goals are set at the executive level, and those touchpoints funnel down
into different levels of management and individual objectives.
► The objective is to create a system of aligned goals, where everyone is collaborating towards
the same organizational objectives to help move the company forward.
► In order to ensure proper alignment, each level of employees will set goals that connect with
the levels above and below them, ensuring each level is balanced and aligned properly.
Benefits of cascading goals

► Creates alignment
► Improves trust and transparency
► Increases employee engagement
► Boost efficiency
► Reduces redundancies
Defining Performance: Measures and Criteria -

► Performance measures address high-level patterns and outcomes of care

comparing various dimensions of quality and cost across organizations and/or
geographic areas. The primary purpose of performance measurement should be to
identify opportunities to improve patient care. Performance measures may be
used for improvement efforts, value-based payment programs, public reporting,
patient decision-making, accountability and/or allocating resources toward
identified gaps in community and population health needs.
► The American Academy of Family Physicians (AAFP) advocates for the utilization of
performance measures consistent with the criteria described below for evaluating
and improving health, health care, and cost.
► The following criteria shall be used by the AAFP to evaluate the need, quality and
acceptability of a performance measure. We urge other stakeholder organizations
to use these criteria as well.
Importance

► Measure Alignment.
► Potential for improvement.
► Severity and prevalence.
► Substantial impact.
► Relevant.
► Improve value.
► Balanced.
► Outcome-Focused.
 Setting Mutual Expectations

► Setting mutual expectations is the process of agreeing on a set of standards, behaviors, and
outcomes to achieve success and maintain a positive work environment. It can lead to
increased productivity, job satisfaction, and a more harmonious workplace.
► Here are some tips for setting mutual expectations:
► Define requirements
► Discuss requirements
► Have a conversation
► Follow up:
► Use the 4 C's framework: Use the 4 C's framework of Context, Clarity, Conditions, and
Commitment to set expectations.
► Describe responsibilities
Setting Mutual Expectations and Performance Criteria

► Communicate clearly
► Be realistic
► Provide regular feedback
► Encourage two-way communication
► Document expectations
► Consider behavioral expectations
► Setting expectations can help align goals, avoid confusion, and create more
trusting relationships.
Setting Mutual Expectations and Performance Criteria

That process starts with mastering a few key steps that should lead to
better results.
► Emphasize objectives. ...
► Set expectations early. ...
► Make employees accountable. ...
► Give meaningful feedback. ...
► Leverage motivation. ...
► Make it measurable.
Unit –iii Performance Reviews

► Performance reviews, also called appraisals, form part of a holistic

approach to managing performance. The value of annual reviews has
increasingly been challenged in recent years in favour of more regular
conversations, but even so, performance appraisal remains an
important part of the performance management cycle.
 Unit –iii Performance Reviews

► Shared responsibility in a collaborative and open feedback process

► Recognition for contributions and coaching for improvements
► Alignment of individual tasks to team and departmental goals
► Clarification of expectations and resources
► Acknowledgement of personal biases and making effort to mitigate
them
► Commitment to continuous improvement and follow-through
Steps in the Performance Review
Process

► Manager and employee review job description and update as needed

► Employee submits written self-assessment to manager
► Manager solicits multi-rater feedback from colleagues, customers, and
direct reports
► Manager documents performance in written Annual Performance Review
► Annual and mid-year conversations are held to align and adjust
expectations and goals
► Annual performance reviews are linked to MIT’s Annual Salary Review (ASR)
► Manager and employee regularly discuss progress towards performance
and development goals
 Performance Review and
Development
A Performance and Development Review (PDR) is a collaborative process between an
employee and their manager to discuss work performance, development, and career planning.
Here are some things that happen during a PDR:
●Set goals
●Discuss progress
●Identify development needs
●Track progress
●Provide feedback
●Encourage participation
●Some best practices for PDRs include:
●Schedule frequently
●Create a safe environment
●Use specific examples
Periodic Reviews and Discussions
Periodic reviews are a common method of performance management that evaluate
an employee's progress against established goals. They can help with:
► Setting benchmarks
► Identifying strengths and weaknesses
► Career development
► Improving communication
► Here are some tips for performance reviews:
► Ask effective questions
► Recognize and reward employees
► Evaluate the process
► The frequency of reviews can vary between organizations, but a yearly review is
the most common
 Critical Success Factors in
Performance Management
Critical success factors (CSFs) are essential elements that must be achieved to
meet an organization's objectives. Here are some CSFs to consider in
performance management:
► Environmental factors
► Temporal critical success factors
► Leadership
► Communication
► Key result areas
► Monitoring
► Employee feedback
Monitoring

Performance monitoring is a key part of the performance management process, and

involves regularly measuring employee performance and providing feedback:
●Identify gaps: Compare actual and expected performance to identify areas for
improvement
●Develop a plan: Discuss the gaps and develop a plan to address them
●Provide feedback: Give employees ongoing feedback on their progress and help
them improve
●Redefine standards: Adjust performance criteria based on the monitoring
●Accommodate changes: Make changes to the system as needed to adapt to
changing business conditions
Monitoring

Performance monitoring can help both employees and the organization:

●Improve morale: Performance monitoring can positively impact employee
morale
●Improve quality: Performance monitoring can help improve the quality of work
produced
●Help employees reach their potential: Performance monitoring can help
employees reach their full potential
●Provide accurate feedback: Performance monitoring can help organizations
provide accurate and objective feedback to employees
E performance Management Systems

An electronic performance management system (ePMS) is a system that uses information technology to help
management monitor, measure, and manage employee performance. The goal of an ePMS is to help
businesses make informed decisions by analyzing performance and identifying areas for improvement.
Here are some other things to know about performance management systems:
●Components
A performance management system typically includes five components: planning, monitoring, developing,
rating, and rewarding.
●Goal setting
A key step in a performance management system is setting clear, specific, and achievable goals for
employees. These goals should align with the organization's strategic objectives.
●Types of systems
Some common types of performance management systems include 360-degree feedback systems,
management by objectives, and key performance indicators.
●Electronic performance support systems (EPSS)
EPSS are tools that HR and L&D teams use to provide employees with self-help content to improve their
performance.
 EPSS(Electronic Performance Support System)

An electronic performance support

system (EPSS) is a software solution
that helps individuals perform a given
online task or function to improve
productivity
 EPSS(Electronic Performance Support System)

An EPSS is best considered when

1. Workers require knowledge to achieve individual
performance in business environment
2. Skilled performers are spending much time helping less
skilled performers
3. New workers must begin to perform immediately and
training is impractical, unavailable or constrained
4. Employees need to be guided through complex process or
task that cannot be memorized
Ongoing Mentoring and Support

► Ongoing mentoring and support" refers to a

continuous process where a more experienced
individual (mentor) provides guidance, advice, and
encouragement to another person (mentee) over an
extended period, actively checking in and assisting
them as they navigate their professional
development or personal growth journey, rather than
a one-time interaction.
Key aspects of ongoing mentoring
and support:

► Regular check-ins:
► Active listening:
► Feedback provision:
► Goal setting:
► Skill development:
► Networking opportunities:
► Accountability:
Benefits of ongoing mentoring and
support:

► Career advancement: Helps mentees gain new skills,

knowledge, and confidence to progress in their roles.
► Improved performance: Regular feedback and guidance can
lead to better decision-making and results.
► Increased engagement: Feeling supported by a mentor can
boost motivation and job satisfaction.
► Positive organizational culture: Promotes knowledge sharing
and collaboration within a team or company.
Setting a Platform for Succeeding
challenges

► "Setting a platform for succeeding challenges"

means proactively creating a strong foundation or system that
allows you to effectively address and overcome future
difficulties by anticipating potential issues, building necessary
capabilities, and establishing mechanisms for continuous
improvement and adaptation, essentially positioning yourself to
not just react to challenges but actively navigate them
successfully.
Key elements of setting a platform
for succeeding challenges:
► Proactive planning and analysis:
► Building a robust infrastructure:
► Developing a learning culture:
► Strong communication channels:
► Diversification and redundancy:
► Empowering teams:
Unit-iv Annual Review and Development
Annual Appraisal Methods
Debate on Annual Reviews
Avoiding Biases
Measuring Team Performance
Performance Discussion and Feedback
Personal Development Plan
Potential Appraisal for Growth
Future Directions in Performance Management
Unit -5 Employee Performance Appraisal System
Design an Employee Performance Appraisal System for an Organisation/ NGO/ Educational
Institution.