PERFORMANCE MANAGEMENT

NEEL
DME, BE, MBA (HRM), M.PHIL (Business Admin), M.S.
(Counselling and Psychotherapy), M. Sc. (Counselling and
Psychotherapy)
Mob: 9324507182
 COMPARISON OF
MANAGEMENT BY OBJECTIVES, PERFORMANCE APPRAISAL
AND PERFORMANCE MANAGEMENT

PMS COMPARISON.xls
 The essence of
Performance Management

• An effective PM system aligns individual

performance with the organisation’s mission,
vision and objectives….American Compensation
Association (1996)
• PM is a process for establishing shared
understanding about what is to be achieved, and
an approach to managing and developing people
in a way which increases the probability that it will
b e achieved in the short and longer
term…..Armstrong (1994)
25 Oct 2009
th
Propositions on which PM is built:
The basic aim-

1. When people know and understand what is

expected of them, and have taken part in
forming these expectations, they will use their
best endeavours to meet them.
2. The capacity to meet expectations depends on
the levels of capability that can be achieved by
individuals and teams, the level of support they
are given by management, and the processes,
systems and resources made available to them
by the organisation.
 Detailed Aims

• Help to achieve sustainable improvement in Org.

Performance
• Act as lever in developing performance oriented culture
• Increase: Motivation & Commitment of employees
• Enable: Individual and Org to help maximise their
potential and growth.
• Enhance: Team cohesion and performance
• Help enhance relationship between teams and Managers
due constant interaction and dialogue.
• Help all to express their feelings and desires for growth
Detailed Aims…...Contd..
• Document job responsibilities
• Define performance expectations
• Define framework for communication between
supervisors and workmen
• Develop coaching and mentoring culture
• Align individual performance expectations with Org
Goals
Why Organisations introduce PM

ORGANISATION REASONS GIVEN

American Express Services Cultural Change

Arts council of England Link pay to performance

British Medical Association Customer Service

Building Research
Link pay to performance
Establishment
Quality, reduce costs and
Mansfield Shoe Group
improve customer service
Why Organisations introduce PM

National History Museum Link pay to performance

Link pay to performance, quality

NHS Executive Trust
and skills development

Northern Ireland Audit Office Improve Customer Service

Pearl Assurance Improve customer Service

Improve Efficiency and devolve

Public Record Office
control to line managers
Link pay to performance for
Managers, identify training needs
Scottish Power
and link pay to skill development
for other staff.
 PM CYCLE..A CONTINEOUS ONE

PLAN

REVIEW ACT

MONITOR
 Defining Performance Mgmt Cycle
Torrington and Hall

Determining Performance
Expectations

Managing Performance Supporting Performance

Standards

Reviewing & Appraising

Performance
 PERFORMANCE MANAGENT
SEQUENCE

• Adapted from Cave and Thomas 1998

Performance Mgmt Sequence.xls

Corporate Mission and Strategic Goals

These provide the starting point of the performance

management process. The Aim is to ensure that
each of the activities in the sequence is aligned to
those goals and contributes to their achievement.

Business and Departmental Plans and Goals

These flow directly from the Corporate Goals but

some iteration may take place so that departmental
views about what can be achieved are taken into
account before the business goals are finalised.
 Performance and Dev. Agreement

• Sometimes called performance contract.

• Agreement reached between Managers and Individuals
on Objectives and Accountabilities.
• Done during formal meeting and recorded in
Performance Review Form.
• Better to do it with enough advance preparation prior to
formal meeting from both ends.
This covers following areas:
1. What the person is doing now.
2. Future expectation due to change in role if applicable
3. Well defined Competence and Process requirement.
Contd….
• Expected outputs and outcomes of the work.
• Input requirements (Knowledge, Skills and
Abilities)
• Expected core values……e.g. quality, teamwork,
customer service, Social responsibilities
(environment))
• Support expected by the employee from
Manager, co-workers, other resources /
information.
• A detailed discussion will help in understanding
and revising the KRAs of individuals and will
bring harmony in the system
 Performance Review and
Development Plan

• Well defined Measurement processes and

evidences that are going to be used.
• Define KRA and method of validating Review
• Well defined development plan of Organisation
with scope and how individuals will be fitted in it
as per Performance Review results.
• E.g. Sales Data, Production Data, DARs,
Marketing Data, Commercial or Accounts Data,
SAP/ ERP etc
Action – Work, Development and Support

• PM gets people into action. Helps in

understanding the development needed for
improvement and helping them to learn with
management support for better results.

• Support should be provided on a continuous

basis through counselling, coaching with
adequate facilities and resources necessary
to meet expectations.
Marchington and Wilkinson 1996

PM requires ongoing and unsolicited support

in order to be effective, that is the telephonic
call and the or the “chance” conversation,
just to check that all is going well, which
many busy managers tend to overlook, in
their efforts to satisfy formal organisational
requirements.
Continuous Monitoring and Feedback

• It is the most important aspect of PM

• It is a continuous process of managing and developing
performance standards.
• It should not be imposed on Managers as something
“Special” they have to do.
• American Compensation Association 1966: Develop
PM on the basis of “Open, honest, positive, two way
communication between supervisors and employees
throughout the period”.
• Interim informal reviews to be held: Qtrly, Monthly etc.
Formal Review and Feedback

• Frequency to be decided based on work

needs
• Occasion for providing structured feedback
and reflections.
• To be based on events and observations
rather than on opinions.
• To be limited to period under consideration.
• There must be an element of self
assessment.
 Points covered during review:

• Achievement of objectives: How on +ve and why not

–ve
• Level of achievement under each competency
• Contribution by individual in upholding core values.
• Achievement in implementing PRDP.
• Areas of Strengths and improvements
• Emotional feelings about work, environment and future
• Career Aspirations
• Comments by person on support he got from
supervisor or manager
Overall Performance Rating

• Whenever a PLI is involved a Rating is a MUST.

• Arguments in favour of Ratings:
1. A PLI can not be paid without a rating.
2. Convenient means of summing up review and
separating low and high performers.
3. Can provide a basis for prediction in future role.
This is highly dubious. Past ≠ future.
4. They let people know where they stand, atleast
in the eyes of their managers.
 Arguments against Ratings:

• It may be unjustifiable to sum up performance with single

digit. System factors are beyond the control of individuals.
• Consistency between raters are difficult to achieve.
• May be based on subjective judge-ments.
• Managers may find it difficult to answer “What do I have to
do to get higher Rating”
• Rating encourages Manager to be dishonest. Central
Tendency in Rating or they decide what they want on PLI
and then rate their team.
• Tends to get into Top-Down judge-mental exercise.
 Arguments against Ratings:

• The positive developmental aspects of the review may be

overshadowed by he knowledge that the end product will
be a rating that will inform a pay decision. In practice, the
review and the preparation for it may be dominated by its
pay implications, destroying its main purpose.
• To label people with a number or letter is both demeaning
and demotivating.
• Ratings convey opinions about the past performance and
do not indicate anything about future.
• It makes people “Impression Managers” and people get
into managing impressions than getting on with their work
 THANK YOU

YOUR FRIEND AND PARTNER

IN PROGRESS
NEEL
TRAINERNEEL@GMAIL.COM
9324507182