Performance Management

Omar Shaikh
What is performance?
• Is it something that is defined by the goals,
values , belief system?
• Is it universal?
• How do we know whether performance is
good or bad?
What is Performance Management
• Performance management is a strategic and
integrated tool that helps organizations to
improve their performance.
• The term strategic emphasizes on its long
term and organization wide implication where
as the term integrated has two dimensions
– Vertical integration
– Horizontal integration
 Horizontal integration
• The term stresses that there must be an
integration among all tools or functions of
performance management. Such as
compensation and benefits must be linked
with recruitment and selection. Appraisals
must be linked with training as well as
compensation. Etc.
 Vertical integration
• Vertical integration means that organizations
objectives must be linked with individuals objectives
through a “golden thread”
• The “Golden Thread” is a performance framework
that explains how an organization's goals, values and
vision are aligned and woven into the fabric of the
organizational hierarchy. The concept explains how
the Golden Thread can be applied within an
organization and the benefits of having a shared
vision and clear performance metrics.
Tools of performance management
• Employee orientation programs
• Coaching and mentoring
• Competence models
• Training and development
• Performance appraisals
• Procedures for rewarding and stimulating (motivating)
• Internal communication systems
• Performance-based remuneration systems
• Career and succession management systems;
• Talent management systems
• Empathy building policies
• Culture management programs
• These all are the techniques that managers
use to improve the performance of their
organization, however according to the
definition they may not be called as
performance management as long as they do
not fulfill the requirement of being strategic
and integrated.
• Example of a PM tool present but not representing
performance management (because of not being
strategic in nature or no vertical or horizontal
integration) is
– After completing performance appraisals, increments are
not given on the basis of performance scores and the
process of increments is interrupted by the CEO.
– Training budget and preference is not planned after finding
performance lacking in performance appraisals.
(remember performance appraisals are just a part of
performance management).