1. OVERVIEWPerformance Management(PM) has become a popular vehicle for attempts to integrate the management of Human Resources with the organization’s wider strategy. PM is the backbone of Human Resource Management practice in any organization. It is important because it plays a pivotal role in any organization’s human resource framework.

PM includes activities that ensure that goals are consistently being met in an effective and efficient manner. PM can focus on the performance of an organization, a department, employee, or even the processes to build a product or service, as well as many other areas.

- There are clear benefits from managing individual and team performance to achieve organizational objectives. Thus; concerted efforts should be devoted towards individuals i.e. human resources for the overall performance of an organization.

- thus, there is a widespread realization that performance management practice have the capability to determine the motivational level of employees and could be powerful vehicle in conversion of employees’ potential into performance.

- In other words, management expects solid, quantified evidence that HR is contributing in a meaningful and positive way to achieving the firm’s strategic aims.

In one aspect of performance management, may be the performance of a company as a whole, and also evaluate the effectiveness of the managers and heads of companies in reaching goals.

In another sense, performance management may be a system of evaluating employees to help them reach reasonable goals and thus ensure that the company performs better.

Performance management of individual employees generally includes planning work, setting goals, offering feedback and reviews, offering opportunities to learn more in one’s field, and rewarding employees who perform well.

Performance is often defined simply in output term .i.e. the achievement of quantified objectives.-It is however not only the matter of what people achieve but how they achieve it.-Performance means both behaviors and results. Behaviour emanates from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviors are also outcomes in their own right – the product of mental and physical effort applied to tasks – and can be judged apart from results.

- performance management – considers inputs (behaviour) and outputs (results).

Three components:-

Objectives: Identifying and evaluating employees’ major work objectives – this is a measurement of results.

Competencies: Evaluating employees on the competencies that you have determined are associated with superior job performance – this is a measurement of the behavioral characteristics that impact results.

Development: Creating Individual Development Plans (IDPs) to enhance employee strengths and to close performance gaps as determined by the competency evaluation.

Performance Mgt. Defined: Is the systematic process for improving

organizational performance by developing the performance of individuals and teams.- It is a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements.- It focuses people on doing the right things by clarifying their goals.

Is about getting better results through people.- It consists of a range of activities, the primary aim of which is to help managers obtain improved performance from their staff, who will be rewarded accordingly.

- It looks about future by concentrating on development of potentials so that people are capable of assuming greater responsibility which will determine level of their pay.

Is a strategic and integrated approach to increasing the effectiveness of organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.

Is a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization

-continuous process - PM is ongoing. It involves a never-ending process of setting goals and objectives, observing performance and giving and receiving ongoing coaching and feedback

-aligning with strategic goals –PM requires that managers ensure that employees’ activities

and outputs are congruent with the organization’s goals and, consequently help the organization gain competitive advantage.

-PM therefore creates a direct link between employee performance and organizational goals and makes the employees’ contribution to the organization explicit.

Thus, PM provides a framework for linking Organisational vision, mission and objectives with departmental and individual objectives

It therefore provides a mechanism for aligning the employee’s performance to the department’s operational and hence the organizational strategic objectives

Performance Management: refers to a process that consolidates goal setting, performance appraisal, and development into a single, common system the aim of which is to ensure the employee’s performance is supporting the company’s strategic aims. - It includes the practices through which the managers: -

define the employee’s goals and work develops the employee's capabilities evaluates and rewards the person’s effort all

within the framework of how the employee’s performance should be contributing to achieving the company’s goals.

It is strategic in the sense that it is concerned with the broader issues facing the business if it is to function effectively in its environment, and with the general direction in which it intends to go to achieve longer-term goals.

It should be noted therefore, unlike performance appraisal, when properly designed, performance management never just entails meeting with subordinates once or twice a year to REVIEW the performance.

Is a continuous and much wider, more comprehensive and more natural process of management that clarifies mutual expectations, emphasizes the support role of managers who are expected to act as coaches rather than judges and focuses on the future.

PM is about managing an organization. Performance mgt. has become prominent in

recent years as means of providing a more integrated and continuous approach to the management of performance than was provided by previous isolated and often inadequate merit rating or performance appraisal schemes.- It is based on the principles of management by AGREEMENT or CONTRACT rather than management by COMMAND.

Many of the more recent developments in Many of the more recent developments in performance appraisal have also been performance appraisal have also been absorbed into the concept of performance absorbed into the concept of performance management, which aims to be a much management, which aims to be a much wider, more comprehensive and more wider, more comprehensive and more natural process of management.natural process of management.

Performance management is about Performance management is about managing the organization within the managing the organization within the context of business - its internal and context of business - its internal and external environment. external environment.

Performance mgt. concerns Performance mgt. concerns EVERYONEEVERYONE in in the business not just managers.the business not just managers.-it is a shared responsibility-it is a shared responsibility-managers and team members are jointly -managers and team members are jointly accountable for the resultsaccountable for the results-jointly to plan what to do, how to do, in -jointly to plan what to do, how to do, in monitoring performance and take action.monitoring performance and take action.

The Holistic approach to performance management: Performance Mgt. is part of an holistic approach to managing for performance which is the concerns of everyone in the organization.Holistic – a comprehensive view of the constituents of performance, how these contribute to desired outcomes at the organizational, departmental, team and individual levels, and what needs to be one to improve these outcomes.

In its fullest sense, performance mgt. means everything that people do at work at any level

contributes to achieving the overall purpose of the organization!!!

what people do – their work how they do – their behaviour what they achieve – their results

Performance Mgt. as integrating force:Performance mgt. should be integrated into the way the performance of the business is managed and it should link with other key processes such as -business strategy-employee devpt.-TQM

Vertical integration-takes the form of interlocking objectives from the corporate level to the functional or business unit level and down to teams and individual level.

- top – down i.e. objectives defined in the light of higher level- bottom-up i.e. lower levels given opportunity formulate own goals aligned to overall purpose and values of the organization-Objectives should be AGREED not SET.-open dialogue btn. managers and individuals throughout the year- partnership in which responsibility is shared and mutual expectations are defined

Horizontal integration-aligning performance mgt strategies with other HR strategies concerned with valuing, paying, involving and developing people.

The overall aim of performance management is to establish a high performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership.

Is about ensuring that the organization and all its subsystems (processes, departments, teams, employees, etc.) are working together in an optimum fashion to achieve the results desired by the organization.

Is specifically concerned with aligning individual objectives to organizational objectives and ensuring that individuals uphold corporate core values.

Importantly, performance Mgt. is concerned with ensuring that the support and guidance people need to develop and improve are readily available.

Today’s successful Manager must have the capacity to visualize how he/she can adapt HR systems to support the company’s strategic needs and the ability to execute required changes. i.e. about “managing changes”.

Effective performance management does not come from following a rigid, bureaucratic process. It comes from understanding what motivates people, and managing the conditions to help them achieve their goals.

The principles of performance management should be about people and performance. Some of the major principles of performance management include the following:-

i. It translates organizational objectives into work units, departmental, team and individual goals.

ii. It provides clarity of goals and objectives of the organization to all employees and managers

iii It is a continuous and integrated process for developing organizational, team and individual performance

iv It seeks to build commitment towards organizational, team and individual performance expectations

v It empowers individual employees to find avenues for improving performance

vi It requires an organizational culture that fosters corporate values of openness, mutuality, trust, fairness and respect, paving the way for two-way communications

vii It creates a system of regular feedback with positive reinforcement of employee’s behavior and action.

viii It provides for evaluation of employee’s performance against jointly agreed performance criteria in a congenial work environment.

ix It provides for an effective and contextual management of external environment for overcoming obstacles and impediments in the way of effective managerial performance

x It is more of developmental tool rather than administration of financial rewards.

PM is a continuous and flexible process that involves managers and those whom they manage acting as partners within a framework that sets out how they can best work together to achieve the required results.

- It focuses on future performance planning and improvement rather than on retrospective performance appraisal.

PM starts with a work plan that identifies for the employee what is to be accomplished and how.

The plan is followed up with informal, ongoing monitoring and feedback on the progress towards

the objectives set in the plan. At the end of the performance period(year) the

manager and employee meet to summarize the accomplishments and challenges(of the past year) and document the discussion

Implementation requires employees be given the guidance, support, authority and resources needed to accomplish action plans. Yet for many organization there is tremendous gap between reality and the vision of the organization

It is the task of the management to organize, motivate ,equip and direct rather ordinary people

to perform at their highest possible levels. In today’s complex, turbulent, and dynamic

business environment, where goals, circumstances, organizational structure, staffing, and activities are constantly changing, managers play an especially important role in helping employees understand what is expected of them(i.e. setting performance criteria),helping them meet these expectations successfully, evaluating performance and providing feedback and providing meaningful recognition and rewards.

PM process consists of the following components:- Performance Planning –setting performance

criteria(objectives/expectations/standards/goals/targets) in line with the strategic objectives of the organization, identifying the required level of competencies needed and developmental plans to perform effectively.

Performance managing –working towards the performance expectations determined at performance planning level. i.e resources required to perform as per planning is available and ensuring that optimal utilization of organizational

resources is made. Performance appraisal- this is systematic

evaluation of the employee’s performance on the job and his potential for development. It is an objective method of judging the relative worth or ability of an employee in performing his task vis-à-vis performance plan.

Performance monitoring –the continuous overseeing of employee performance, giving feedback of results, and providing support and carrying out correctional and developmental activities in order to ensure continual alignment

with set performance objectives as identified at the planning level

• Managers have increasingly recognized the need to enable employees to perform effectively, as well as the need to measure and reward performance.-this requires direct, personal involvement by managers in creating and sustaining effective work design, empowering employees to act, providing the resources needed and counseling employees. for effective PM process key consideration should be:-

How managers and employees design work for the highest motivation and utilization of talent

How managers empower employees to managetheir performance in support of business objectives How managers personally counsel and support

employees in managing their performance

Thus competitive effectiveness requires that management continually seek opportunities to improve individual, team and organizational performance.

An important component of performance management process is the monitoring and evaluation of an employee’s work performance.

- It requires managers to continuously observe, analyze and appraise the performance of employees and provide feedback and counseling for improving their work related skills, knowledge and bahaviour.

Monitoring of the performance of employees is essential in today’s dynamic workplace to enable the organization to remain competitive

Employees need to recognize the fact that

continuous feedback helps them to correct performance deficiencies immediately and become effective in their current jobs, and also enables them to grow higher positions.

Evaluation is a key to success of any performance improvement process. It helps in assessing the effectiveness of improvement efforts and helps in keeping focus on objectives. It also helps in identifying deficiencies for making appropriate remedy. However, such evaluation must be capable of being expressed in terms of units that are pertinent and meaningful to a specific task.

Performance monitoring is a process of promoting a climate of continuous learning and development, helping to sustain employee performance at planned level, enhancing individual competencies and making employee competitive within the organization for productive contributions.

Thus a tool to assess activities in performance management system that can influence employee

performance in working towards improving organizational performance.

- It entails the analysis of the following areaso Results – successful achievement of job taskso Effectiveness - accuracy of performed job taskso Progress -towards improvement areaso Methods and procedures -use of improved work

methods and better procedureso Work habits - cultivation of right work ethics and

attitude.

Its characteristicsThe major characteristics of performance

monitoring and evaluation include1. It is an aftermath activity of performance

appraisal2. It is a tool to keep employee performance

focused as required by the objectives and goals set in the performance plans

3. It provides opportunities to employees to correct performance regularly by making use of feedback from managers

4 It provides training and development opportunities to employees

5 It facilitates career development of employees6 It strengthens relationship between

management and employees, based on principles of Management by Facts.

Its importancePerformance monitoring and evaluation is important

because1. It provides scope for modification, change and/or

alteration of the existing performance system, paving way for new or improved system

2. It helps in reviewing and correcting performance objectives as linked to mission and objectives of the organization

3. It identifies areas for competency improvement4. It continually enhances performance of employees

It helps in realizing the full potential of employees and organization for excellence in performance

Its Objectives1. To provide learning, training, and development

ooportunities to employees2. To improvise individual job performance as well

as methods and techniques of measuring performance

3. To review the ways of defining and agreeing of performance criteria of teams and individual employees at the performance planning level

4. To assess commitment and motivational level to accept and realize performance feedback in positive perspectives

5. To incorporate change necessitated by external environment and affect overall performance improvement of the organization

A plan well thought and developed by all levels of management is essential to realize the objectives and strategy of the organization by improving productivity, profitability, ROI and by reducing employee turnover and absenteeism.

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