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DEFINITION OF PERFORMANCE

MANAGEMENT

A systematic approach to improving individual and teamperformance in order to achieve organisational goals

Hendry, Bradley,and Perkins(1997)Performance management is about directing and supportingemployees to work as effectively and efficiently as possible in

line with the needs of the organisation. Walters(1995)Performance management is a means of getting better resultsfrom he organisation, teams, and individuals within an agreedframework of planned goals, objectives and standards

Armstrong and Murlis(1994)An effective performance management system alignsindividual performance with the organisations mission,visionand objectives

American compensation association(1996)

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Meaning of Performance Management(PM)

PM is a strategic and integrated approachto delivering sustained success toorganisations by improving theperformance of the people who work inthem and by developing the capabilities ofteams and individual contributors.

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Comparision between performance appraisal

and performance management

Performance appraisal Performance management

Usually tailor made

Applied to all staff

Individual objectives may beincluded

Some qualitative performanceindicators may also be included

Annual appraisal

Top-down system with ratings

Often linked to pay

Monolithic system

Complex paper work

Owned by personnel department

Tailor made

Applied to all staff

Emphasis on integrating corporate,teamand individual objectives

Competence requirements often includedas well as quantified measures

Continuous review with one or more formalreviews

Joint process,ratings less common

May not be a direct link to pay Flexible process

Documentation often minimised

Owned by line management

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Performance defined Performance is something that person leaves behind

and that exists apart from the purpose. Kane(1996)

Performance should be defined as the outcomes of workbecause they provide the strongest linkage to thestrategic goals of the organisation, customer

satisfaction, and economic contributions

The Oxford English Dictionarydefines performance as the accomplishment, execution, carrying out, working outof anything ordered or undertaken

In general when one is managing the performance ofteams and individuals, both inputs (behaviour) andoutputs(results) should be considered. performance ishow things are done as well as what is done

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Factors affecting

performance Personal factors- the individuals skill, competence,

motivation and commitment

Leadership factors- the quality of encouragement,

guidance and support provided by managers and teamleaders

Team factors- the quality of support provided bycolleagues

System factors- the system of work and facilitiesprovided by the organisation

Contextual (situational)factors- internal and externalenvironmental pressures and changes

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Objectives of performance management

1. When people (individuals and teams) knowand understand what is expected of them,and have taken part in forming theseexpectations, they will use their best

endeavors to meet them2. The capacity to meet expectations depends

on the levels of capacity that can be achieved

by individuals and teams, the level of supportthey are given by the management and theprocesses, systems and resources ,madeavailable to them by the organisations

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Aims/objectives of PM Help to achieve sustainable improvements in organisational

performance

Act as a lever for change in developing a more performanceoriented culture

Increase the motivation and commitment of employees

Enable individuals to develop their abilities,increase their jobsatis faction and achieve their full potential to their own benefitand that of the organisation as a whole

Enhance the development of team cohesion and performance

Develop constructive and open relationships betweenindividuals and their managers in a process of continuingdialogue which is linked to the work actually being donethroughout the year

Provide opportunities for individuals to express their aspirationsand expectations about their work

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Importance/Benefits of performance management

For the organisation

1.Align corporate, individual and team objectives2.Improve performance

3. Motivate employees

4.Increase commitment

5.Underpin core values6.Improve training and development processes

7.Help to develop a learning organisation

8.Enlarge the skill base

9.Provide for continuous improvement and development

10.Provide the basis for career-planning11.Help to retain skilled employees

12.Support total quality and customer service initiative

13.Support culture change programmes

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Importance contd.For Managers

Provide the basis for clarifying performance and behaviourexpectations

Afford a framework for reviewing performance andcompetence levels

Improve team and individual performance

Support leadership, motivating and team buildingprocesses

Provide the basis for underperformers

May be used to develop or coach individuals

Offer the opportunity to spend structured quality timewith teams and team members

Provide the basis for providing non-financial rewards tostaff (eg. Recognition, opportunity for growth anddevelopment

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Importance contdFor individuals

1. Greater clarity of roles and objectives2. Encouragement and support to perform well

3. The provision of guidance and help indeveloping abilities and performance

4. Opportunities to spend qualty time with theirmanagers

5. Opportunities to contribute to the formulation

of objectives and plans and to improvements inthe way work is managed and carried out

6. An objective and fair basis for assessingperformance

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Scope of performance management

PM is about managing the organisation.It is a natural process of

management, not a system or technique It is also about managing within the context of the business(its

external and internal environment)

PM concerns everyone in the business-not just managers. It

rejects the cultural assumption that only managers areaccountable for the performance of their teams and replaces itwith the belief that responsibility is shared between managersand team members

In short ,best-practice performance-management processes arepart of a holistic (all-embracing) approach to managing forperformance, which is the concern of everyone.

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1. It is a continuous process

2. It is flexible in nature

3. It is futuristic in nature

4. It is a participatory process5. It is a means of controlling

6. It is behavioral in content7. It is win-win philosophy

Nature of PM

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THE PERFORMANCE MANAGEMENT CYCLE

The performance management process

Plan

ActMonitor

Review

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The performance management sequence

Corporate mission andstrategic goals

Business and departmentalplans and goals

Performance anddevelopment agreement

Performance and

development plan

Formal review, feedbackand joint assessment

Action-work anddevelopment

Continuous monitoring

and feedback

Competencerequirement

Competence

evidence

Performancestandards

Performance

measurement

Financialreward

Rating