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PERFORMANCE MANAGEMENT
Unit-1
Introduction:
Performance

The first step is to know “performance”. The literary meaning of performance is “an act of
staging or presenting a play, concert or other form of entertainment.” Also, performance goes
synonymous with “accomplishment” and “Fulfillment”.

As we take the word performance for Business administration, we can define performance
as “the accomplishment of a given task with the set standards, precision, quality and
completeness”.

Popular industrial psychologist Campbell defines Performance as “behaviour of an

individual towards the given task”.

Performance management (PM) includes activities which ensure that goals are consistently
being met in an effective and efficient manner. Performance management 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.

How do you define Performance Management?

Performance management can be characterized as a precise procedure to enhance

authoritative performance by building up the performance of people and groups working with
an association. It is a method for showing signs of improvement comes about because of the
association, groups and people by comprehension and dealing with their performance inside
a system of arranged objectives, guidelines and skill necessities. At the end of the day,
performance management is the way toward dealing with an association's administration
technique. This is the manner by which designs are changed over into wanted results in
associations.

Srinivas Kandula defines performance management as “process of

designing and executing motivational strategies, interventions and drivers
with an objective to transform the raw potential of human resource into
performance”.

We can say that “Performance Management is a systematic process

by an Organisation to improve and evaluate the performance of its
employees as individuals as well as groups.”
Performance management is a powerful tool

Performance management is a troublesome part to play. A few people experience issues with
regards to performance assessment. Performance management is about inspiration and
organization. At the point when this sort of imminent is imparted to your representatives and
they figure out how to find in that way, performance management turns into an effective
device that will help your group to end up noticeably more fruitful.

Performance Management isn't Human Resource Planning

Performance management is now and again mixed up for HR and faculty framework, however
it is altogether different with regards to performance. Performance management contains the
philosophies, forms, programming instruments, and frameworks that deal with the
performance of an association, though Human Resource Planning just deals with singular
worker's work duties and work conveyance.

The advantages of performance management reach out to improving wide cross-useful

inclusion in basic leadership, and figured hazard taking by giving more prominent
perceivability exact and applicable data, to execute an association's technique.

Performance management includes numerous administrative parts, which demonstrates you

should be a communicator, a pioneer and a colleague also. Every person in the group ought to
see precisely what their duties are and what the desires from them are, and how to work
appropriately to achieve the objectives.
Scope of Performance Management

Employees are the most significant resource of an organization.

Performance management is the mirror that shows the commitment of the
human capital to the organization and to their assigned task. This system
creates an opportunity for the top management to reward the excellent
performance or reprimand unsatisfactory performance. This powerful
system should be a tool to assess the overall performance of the
organization. This system not only show case the individual performance of
the organization, but it is also a tool to measure the developing steps of
the organization as a whole towards its missions.

The scope of the performance management includes the following:

➢➢ Providing employees a better understanding of their role and

responsibilities
➢➢ Increase the confidence of the employees through recognizing
their strengths
➢➢ Identifying training needs to overcome the weak areas

➢➢ Improve the relationships in the working areas

➢➢ Improve communication between superior and subordinates

➢➢ Improve teams and team spirit

➢➢ Improve commitment

➢➢ Succession planning through grooming subordinates to future

managers
➢➢ Providing space for personal reflections

➢➢ Providing a platform for personal development

➢➢ Providing assistance to achieve personal career goals

➢➢ Providing a better work environment and work place

13
  Providing counseling to make work life balance

 Improving the overall organisational work culture

 Creating qualitative work environment

And the list grows day by day. As proposed by management guru Marshall Goldsmith,
organizations need to shift focus from performance ‘feedback’ to ‘feed forward’. The ‘feed
forward’ approach emphasizes proactive and holistic performance management at individual,
team and organizational levels.
.

Performance management isn't free skimming. In the event that we disentangle a bit,
performance management just exists to enable the association to accomplish its methodology
in the most ideal approach to help the association to survive and contend in the market.

Performance management has no end point. Once in a while, for occupied with, dedicated
administrators it appears as though it is the reason we experience evaluation with staff and
complete the examination procedure. Solid and enhancing performance by people and
magnificent performance management by all supervisors who are mindful to hang on with their
groups are fundamental to accomplishing hierarchical objectives.
Research has shown that an awesome dominant part of people needs to perform incredibly. At
the point when supervisors deal with their groups and person's performance skillfully, this
persuades people to be glad for what they do. In spite of the fact that this is a major
speculation, it looks that most people truly would like to complete a great job, making our
authority in performance management a constant open door.

PERFORMANCE MANAGEMENT CONCERNS

What are Performance Management Concerns?

The accompanying are the principle worries of performance management −

Concern with outputs, process and inputs

Performance management is worried about yields (the accomplishment of results) and results
(the effect made on performance). In any case, it is likewise worried about the procedures
required to accomplish these outcomes (abilities) and the contributions to terms of capacities
(learning, expertise and capability) anticipated from the groups and people included.

Concern with planning

Performance management is worried about preparing to make progress in future. This implies
characterizing desires communicated as targets and in marketable strategies.

Concern with measurement and review

On the off chance that you can't gauge it, you can't oversee it. Performance management is
worried about the estimation of results and with auditing progress towards accomplishing
targets as a reason for activity.

Concern with continuous improvement

Worry with persistent change depends on the conviction that consistently endeavoring to
achieve higher models in all aspects of the association will give a progression of incremental
additions that will construct unrivaled performance.

This implies illuminating what authoritative, group and individual adequacy look like and finding
a way to guarantee that those characterized levels of viability are accomplished. Building up a
culture in which directors, people and gatherings assume liability for the ceaseless change of
business forms and of their own aptitudes, capabilities and commitment.

Concern with continuous development

 Performance management is worried about making a culture in which hierarchical and singular
learning and improvement is a ceaseless procedure. It gives intends to the incorporation of
learning and work with the goal that everybody gains from the victories and difficulties inborn
in their everyday exercises.

Concern for communication

Performance management is worried about correspondence. This is finished by making an

atmosphere in which a proceeding with discourse amongst directors and the individuals from
their groups happens to characterize desires and offer data on the association's main goal,
qualities and destinations. It sets up common comprehension of what is to be accomplished
and a structure for overseeing and creating individuals to guarantee that it will be
accomplished.

Concern for stakeholders

Performance management is worried about fulfilling the necessities and desires of all the
association's partners, management, workers, clients, providers and the overall population.
Specifically, representatives are dealt with as accomplices in the undertaking whose interests
are regarded, whose assessments are looked for and tuned in to, and who are urged to add to
the detailing of targets and plans for their group and for themselves.

Concern for transparency

Four moral rule that ought to oversee the operation of the performance management process.
These are −

 Respect for the individual

 Mutual respect
 Procedural fairness
 Transparency of decision making

Performance Management Overview

Performance management is the systematic process by which an agency involves its

employees, as individuals and members of a group, in improving organizational effectiveness in
the accomplishment of agency mission and goals.

Employee performance management includes:

 C planning work and setting expectations,

C continually monitoring performance,

C developing the capacity to perform,

C periodically rating performance in

a summary fashion, and
C rewarding good performance.

The revisions made in 1995 to the Governmentwide performance appraisal and awards
regulations support sound management principles. Great care was taken to ensure that the

requirements those regulations establish would complement and not conflict with the
kinds of activities and actions effective managers are practicing as a matter of course.

Planning

In an effective organization, work is planned out in advance. Planning means setting

performance expectations and goals for groups and individuals to channel their efforts toward
achieving organizational objectives. Getting employees involved in the planning process will
help them understand the goals of the organization, what needs to be done, why it needs to
be done, and how well it should be done.

The regulatory requirements for planning employees' performance include establishing the
elements and standards of their performance appraisal plans. Performance elements and
standards should be measurable, understandable, verifiable, equitable, and achievable.
Through critical elements, employees are held accountable as individuals for work assignments
or responsibilities. Employee performance plans should be flexible so that they can be adjusted
for changing program objectives and work requirements. When used effectively, these plans
can be beneficial working documents that are discussed often, and not merely paperwork that
is filed in a drawer and seen only when ratings of record are required.

Monitoring

In an effective organization, assignments and projects are monitored continually.

Monitoring well means consistently measuring performance and providing ongoing feedback
to employees and work groups on their progress toward reaching their goals.

Regulatory requirements for monitoring performance include conducting progress reviews

with employees where their performance is compared against their elements and standards.
Ongoing monitoring provides the supervisor the opportunity to check how well employees
are meeting predetermined standards and to make changes to unrealistic or problematic
standards. And by

Monitoring continually, supervisors can identify unacceptable performance at any time

during the appraisal period and provide assistance to address such performance rather than
wait until the end of the period when summary rating levels are assigned.

Developing

In an effective organization, employee developmental needs are evaluated and addressed.

Developing in this instance means increasing the capacity to perform through training, giving
assignments that introduce new skills or higher levels of responsibility, improving work
processes, or other methods. Providing employees with training and developmental
opportunities encourages good performance, strengthens job-related skills and competencies,
and helps employees keep up with changes in the workplace, such as the introduction of new
technology.

Carrying out the processes of performance management provides an excellent opportunity

for supervisors and employees to identify developmental needs. During planning and
monitoring of work, deficiencies in performance become evident and can be addressed.
Areas for improving good performance also stand out, and action can be taken to help
successful employees improve even further.

Rating
From time to time, organizations find it useful to summarize employee performance.

This helps the manager look at and compare performance over time or across a set of
employees.

Organizations need to know who their best performers are.

Within the context of formal performance appraisal requirements, rating means evaluating
employee or group performance against the elements and standards in an employee's
performance plan and assigning a summary rating of record. The rating of record is assigned
according to procedures included in the organization's appraisal program. It is based on work
performed during an entire appraisal period. The rating of record has a bearing on various
other personnel actions, such as granting within-grade pay increases and determining
additional retention service credit in a reduction in force.

Note: Although group performance may have an impact on an employee's summary

rating, a rating of record is assigned only to an individual, not to a group.

Rewarding
In an effective organization, rewards are used well. Rewarding means recognizing employees,
individually and as members of groups, for their performance and acknowledging their
contributions to the agency's mission. A basic principle of effective management is that all
behavior is controlled by its consequences. Those consequences can and should be both formal
and informal and both positive and negative.

Good managers don't wait for their organization to solicit nominations for formal awards
before recognizing good performance. Recognition is an ongoing, natural part of day-to-day
experience. A lot of the actions that reward good performance — like saying "Thank you" —
don't require a specific regulatory authority. Nonetheless, awards regulations provide a broad
range of forms that more formal rewards can take, such as cash, time off, and many
 nonmonetary items. The regulations also cover a variety of contributions that can be
rewarded, from suggestions to group accomplishments.

Performance Management as Prose

Good managers have been speaking and practicing effective performance management all
their lives, executing each key component process well. They not only set goals and plan work
routinely, they measure progress toward those goals and give feedback to employees. They
set high standards, but they also take care to develop the skills needed to reach them. They
use formal and informal rewards to recognize the behavior and results that accomplish their
mission. All five components working together and supporting each other achieve natural,
effective performance management.

PERFORMANCE MANAGEMENT PROCESS

What is the process of performance management?

In this part, let us comprehend the procedure of performance management. Performance

management is a procedure management which comprises of the following exercises −

 Plan − decide what to do and how to do it.

 Act − carry out the work needed to implement the plan.
 Monitor − carry out continuous checks on what is being done and measure outcomes in
order to assess progress in implementing the plan.
 Review − consider what has been accomplished and, in the light of this, build up what all the
more should be done and any remedial activity required if performance isn't in accordance
with the arrangement.


This grouping of exercises can be communicated as a persistent cycle as appeared in the
following figure −

Performance Management Cycle

Performance management can be depicted as a consistent procedure cycle as appeared in the
following figure, which takes after the plan– act– monitor– audit arrangement as portrayed
previously.

Performance Management Sequence

The arrangement of procedures did in this cycle and the probable results are represented in the
following figure −

Performance Management Activities

Give us now a chance to talk about the exercises that occur in performance management. The
primary exercises are −
 Role definition, in which the key outcome zones and capability necessities are concurred.
 The performance understanding, which characterizes desires − what people need to
accomplish as goals, how performance will be estimated and the skills expected to convey
the required outcomes.
 The performance change design, which indicates what people ought to do to enhance their
performance when essential.
 The self-improvement design, which sets out the moves individuals should make to build up
their insight and aptitudes and increment their levels of ability.

 Managing performance consistently, when move is made to actualize the performance

assention and performance change and self-awareness designs as people go ahead with
their everyday work and their arranged learning exercises. It incorporates a nonstop
procedure of giving input on performance, directing casual advance surveys, refreshed
destinations and, where important, managing performance issues.
 Performance survey is an assessment arrange, where an audit of performance over a period
happens covering the perspectives like accomplishments, advance and issues as the reason
for the following piece of the constant cycle – a reexamined performance understanding and
performance change and self-improvement designs. It can likewise prompt performance
appraisals.

Performance Management in Action

Performance management ought not resemble a framework in view of periodical formal

evaluations and point by point documentation. The exercises ought to be coherent in the
feeling of adding to a general approach in which all parts of the performance management
process are composed.

In this way, in each association there is a need to pronounce why performance management is
imperative, how it works and how individuals will be influenced by it. The announcement ought
to have the noticeable and ceaseless help of best management and should accentuate to build
up an elite culture and coordinate authoritative and individual objectives.

Performance management perceives the way that we as a whole make the perspective of the
general population who work for the association and it additionally bodes well to express that
view unequivocally against a system of reference.

Significance of Performance Management

Performance Management system is essentially evaluating and understanding the

performance of the employees, but also it is an overall holistic process of a cycle of improving
the performance of the individual human who has various interests, various potentialities,
problems, ego, and thousand other traits. Hence, we can say that, performance management
tries to analyze and find the competency of the employees, identify the areas of performance
lack, planning with system to encourage and enhance the performance for improvement.

Performance Management plays the vital role of identifying and enhancing the potentials
of employees to fulfill the needs and requirements of the jobs assigned to them as well as to
move upward themselves in his career ladder.

Performance Management helps the overall organization’s effectiveness and development

by

 Effective business environment

 Improved HR activities
  Motivation

 Improved Work Culture

 Sustainable work force

 Optimal utilization and productivity from the work force

 Scope for continuous learning

Linkage of PM to other HR processes

Strategic HR decisions establish standards for each job role to define its competencies.
Then, performance management systems measure employee achievement relative those
competencies. Managers use performance management systems to assess and reward the
behavior of their employees. Additionally, a strategic human resource management function
handles the recruiting, interviewing, hiring and development of all personnel required to ensure
your company can achieve its goals. The relationship between performance management and
strategic planning links day-to-day operations with your company’s vision.
Setting Organizational Goals
As part of the strategic planning process, an organization defines its goals and objectives. For
example, a company may decide to focus on specific IT trends such as cloud computing, data
security and global markets. As a result, strategic direction may dictate whether a company
maintains research and development spending. This impacts the HR department's ability to
attract and retain top talent.
Defining Personal Development Goals
An individual establishes her personal goals by aligning her development activities to the
organization’s needs. For example, a strategic HR department can publish self-assessment tools
that allow an employee to determine how she rates in terms of attributes. These attributes
might include accountability, reliability, integrity and customer-centric behavior. Performance
gaps may reveal a need to improve in one or more areas. Establishing a specific, measurable
and attainable goal makes it easier for an employee to achieve her objective. Goals should also
be realistic and time constrained. To complete the process, managers usually require
employees to submit a development plan. Only after approval can the employee begin
completion of her defined activities.
Managing Change
Ensuring an organization’s capability to provide critical services usually requires assessing the
entire workforce against a defined competency model for each role. Work usually involves a
combination of technical and professional skills. For example, if a business needs to make a
shift from doing business one way to transforming to using new processes and technology, skill
in change management becomes a priority. Managers need to recognize, through performance
management processes, individuals who can act as leaders and help others achieve strategic
goals.
Providing Training
Strategic HR management allows you to recognize the need to offer training and development
opportunities that ensure personnel can respond to challenges both now and in the future.
Workshops, seminars and self-paced podcasts, videos and job aids can help prepare employees
to address problems in the workplace. By analyzing performance review results, HR
administrators identify problem areas, such as communication, collaboration and business
acumen. Then, they can offer learning and development options. Or, if all employees appear to
lack technical knowledge about a new infrastructure, the success of the entire company may
depend on addressing performance gaps. The HR department needs to rise to the challenge of
developing, delivering and evaluating training that meets this learning need.
Performance audit
Definition
Performance appraisal of a firm's internal controls, and the efficiency and effectiveness of
its procedures and processes. It is not an evaluation of the firm's financial performance. See
also management audit.
Performance audit refers to an independent examination of a program, function, operation
or the management systems and procedures of a governmental or non-profit entity to assess
whether the entity is achieving economy, efficiency and effectiveness in the employment of
available resources.[1] The examination is objective and systematic, generally using structured
and professionally adopted methodologies.
In most countries, performance audits of governmental activities are carried out by the
external audit bodies at federal or state level. Many of these audit bodies have established
guides for conducting performance audits which explain how performance audits are planned,
conducted and its results reported.
INTOSAI, the International Association of Supreme Audit Institutions, has published
generally accepted principles of performance auditing in its implementation guidelines. In the
United States, the standard for government performance audits is the Generally Accepted
Government Auditing Standards (GAGAS), often referred to as the "yellow book", maintained
by the federal Government Accountability Office (GAO). Similarly, the European Court of
Auditors (ECA) has developed a "performance audit manual" for its audits of the sound financial
management of the European Commission and the programmes funded through the EU
budget.[2]
Performance audits may also be conducted by internal auditors who are employees of the
entity being audited. However, some national governments require agencies, departments and
branches to periodically retain outside auditors to conduct them.
In the USA, all auditors who follow GAGAS standards are required to maintain
independence, supervision, continuing professional education, and conduct the audit using a
specific process designed to increase the quality of the audit and reduce the politicization of
audit work. Although there are separate professional credentials and certifications for Financial
Auditors, the persons that conduct Performance Audits in the USA are often Certified Public
Accountants, Certified Internal Auditors, or have a broad background in public policy, business
or public administration.
 The scope of performance audits may include the detection of fraud, waste and abuse,
although often these are not included in the scope. Prior to engaging in a performance audit,
the auditor must have a scope and plan defined which will be used to guide the audit process.
Performance auditing differs from performance measurement, the latter being the
responsibility of management of the entity. In addition, performance measurement may
include a broad variety of activities that do not meet the rigour of an independent external
assessment.
 Unit-2
Performance Management Planning: