UNIT 1 Introduction - definition - performance

appraisal to performance management –

PERFORMANC performance management and other HR
sub-systems - objectives, characteristics -
E performance management conceptual
model –benefits & imperatives of
MANAGEMENT performance management - challenges
to performance management
Introduction

“Performance management is a
“Performance management is the continuous process of identifying,
process of creating a work measuring and developing the
environment or setting in which performance of individuals and
people are enabled to perform to teams and aligning performance
the best of their abilities.” with the strategic goals of the
organisation”
 It is integrated,
because it effects four
What is types of integration
Performance
Management? • Vertical
• Functional
• Human Resource
• Goals
Nature of performance Management

Concern with
Concern with
output,outcomes,process Concern with planning.
measurement and review.
and input.

Concern with continuous

Concern for
development and Concern for stakeholder.
communication.
improvement.

Ethical concerns.
SCOPE OF Identifying the parameters Setting performance Planning in participative Identifying competencies

PERFORMAN of performance and stating

them very clearly;
standards; ways where appropriate,
performance of all
constituents;
and competency gaps that
contribute/hinder to
performance;

CE
MANAGEME
NT SYSTEM Planning performance Creating ownership; Recognizing and promoting
development activities; performance culture;
Process of PM

file:///C:/Users/harin/Downloads/performancemanagement-140507052546-phpapp01.pdf
 Basis of Comparison Performance Appraisal  Performance Management
Meaning Evaluating the performance and potential of Managing and developing employees and their
employees performance

Purpose Determine compensation Increase the growth of the organization

Orientation A system A process

Flexibility Not Flexible Highly flexible

Type of tool Operational tool Strategic tool

Aim  Improve employee efficiency Reach business development goals

Ownership HR department Managers and stakeholders

Time frame Annually  Ongoing 

Nature Retrospective  Forward-looking 

Approach Based on individual employees Team-based value

Objectives of PM
To enable the employees towards achievement of superior standards of
work performance.

To help the employees in identifying the knowledge and skills required for
performing the job efficiently as this would drive their focus towards
performing the right task in the right way.

Boosting the performance of the employees by encouraging employee

empowerment, motivation and implementation of an effective reward
mechanism
Promoting a two way system of communication between the supervisors
and the employees for providing a regular and a transparent feedback for
improving employee performance and continuous coaching.

Identifying the barriers to effective performance and resolving those

barriers through constant monitoring, coaching and development
interventions.

Creating a basis for several administrative decisions strategic planning,

succession planning, promotions and performance based payment
Conceptual Model
 PROVIDES CLARITY
 Performance management gives employees a clear understanding of their
expectations, goals, and deliverables. It creates an amicable work environment as team
leads and members are on the same page concerning deliverables and outcomes.
 Such work cultures, in turn, experience reduced conflict, increased efficiency, and
enhanced performance quality.

ENHANCES EFFICIENCY
 Performance management tools help capture details about employees, including

Benefits salaries, targets and goals, and performance. These data points enable organizations to
consistently select the right employees for specific roles and promotions.
 They also help identify those who are not performing optimally, so that plans can be
made for additional training or performance improvement plans (PIPs), etc.  

PROMOTES JOB SATISFACTION

 As employees gain clarity about their deliverables, and the expectations from them, it
also creates opportunities for self-assessment, improved performance, and agency in
defining one’s career path.
 This autonomy empowers employees to take charge of their growth and professional
development, which in turn promotes job satisfaction.
 Benefits
INCREASES MOTIVATION
 A performance management system identifies and showcases star performers in an organization. Such
recognition helps develop a culture of excellence that motivates employees to produce their best work and put their
skills to best use.
 Organizations can choose to recognize and reward employees with monetary benefits, awards, or promotions.
This drives home the message that the organization will reward good performance and encourage others to strive for
exceptional achievements.  

 ENABLES OBJECTIVE DECISION-MAKING

 Humans often carry unconscious bias, which is hard to recognize and reduce. And while working with teams, there
could be a natural tendency to favor a few. But a robust performance management system enables managers
and leaders to make objective decisions while reducing biases, nepotism, favoritism, etc.  
 A performance management system can provide data based purely on merit and map them to expected targets
and goals, thereby making the process transparent and objective. This in turn enables objective decision-making.
 CHALLENGES OF PERFORMANCE MANAGEMENT

IMPLEMENTING A SUCCESSFUL PERFORMANCE MANAGEMENT SYSTEM FOLLOWING THE COVID-19 PANDEMIC-INDUCED LOCKDOWNS, MOST
TAKES PLANNING AND SEAMLESS MATCHING OF THE NEEDS OF THE ORGANIZATIONS HAVE NOW ESTABLISHED HYBRID WORK MODELS, WHICH
INCLUDE PART OR FULL WORK FROM HOME. THIS HAS ALSO CAUSED SIGNIFICANT
BUSINESS TO THE TOOLS AVAILABLE. CHALLENGES WHILE IMPLEMENTING PERFORMANCE MANAGEMENT SYSTEMS.
WITH WORK FROM HOME AND INABILITY TO MEET EMPLOYEES IN PERSON, ALL
OF THE FOLLOWING CHALLENGES BECOME IMPORTANT AND NEED TO BE
ADDRESSED. 
 THE ABSENCE OF GOAL SETTING AND DEFINED
MILESTONES

CHALLENGE  It is imperative to break organizational goals down into specific

S OF milestones against decided timelines. Failing to define milestones
and establish clear communication with employees can hamper

PERFORMAN performance.
 On the other hand, with hybrid work, when organizations define

CE milestones and set smaller manageable goals, it helps employees take

smaller steps to greater success and also helps managers effectively
track progress. 
MANAGEME
NT  USING PERFORMANCE MANAGEMENT SOLELY AS A
MEASUREMENT TOOL

 Many leaders and managers mistake performance management as an

exercise solely in success measurement, when it is actually about
feedback and continuous improvement.
 The objective and focus of performance management should be as
much on the progress and development of the employees as it is on
measurement and evaluation
 ESTABLISHING TRUST

 Most organizations do not take the time and effort to educate and get the buy-in of
CHALLENG employees for their performance management system and process. This, in turn, promotes
confusion and distrust. Most employees don't know how they are to be rated, and hence
ES OF view the rating system with suspicion.  
 Educating the workforce and explaining the nuances of the performance management
PERFORMA system in force, and being transparent can earn the trust and the support of employees,
especially in hybrid work models.  
NCE
MANAGEME  UNTRAINED MANAGERS

NT  Evaluating people is a complex task. Most managers loathe this process and aren't
convinced they are proficient at it. A vital aspect of performance management is to coach
managers on how to evaluate their teams.
 This would require training and supporting them when having difficult conversations,
addressing performance issues, and solving team challenges. It also helps if organizations
make these conversations more frequent versus the typical annual appraisal cycles.  
 IT’S AN ANNUAL ACTIVITY

CHALLENGE
S OF A majority of organizations follow the
PERFORMAN traditional form of performance management
that is conducted annually. This puts the focus
CE on evaluation rather than development.
MANAGEME
NT Performance management is evolving and
needs to be conducted at frequent intervals so
companies can provide employees with timely
feedback and development plans.
 Performance Potential Career
Appraisal Appraisal Planning
Sub
Systems of Training Organizational Rewards
HRD Development

Counselling Quality Circle Role Analysis

Performance appraisal: The performance of an employee is measured against the factors such as knowledge of job, quality and
quantity of output, initiative, supervision, leadership qualities, cooperation, dependability, health, versatility, judgment etc. The
purpose of appraisal is to assess the present position of efficiency of employee in order to determine the need for training.

Potential Appraisal: The object of potential appraisal is to develop latent abilities of individuals. Potential appraisal
provides vital information about individuals to prepare career plans for them. Potential appraisal evaluates the leadership
abilities and potentials of the individuals. It ensures a good match between employees potentials and the job. 

Career Planning: Planning for Career makes employee grow in his working life time while unplanned careers flopped.
The first and foremost step in career planning is to make one’s SWOT analysis. He should assess his strength,
weaknesses, opportunities and threats.

Training: Training is an attempt to improve current or future employee performance by increasing an employee’s ability to perform through
learning usually by changing the employee’s attitude or increasing his or her knowledge. The need for training is determined by the deficiency of
employee’s performance, Training process include; acquiring skills, concepts, attitudes for increasing effectiveness in doing a specific job or jobs. 

Organisation Development: Organisation Development intend to change beliefs, attitudes, values and structure of organisations that they can
better adapt to new technologies, markets and challenges and the dizzying rate of change itself. Organisation is an open system and therefore
must develop itself by adopting various changes to meet the challenges thrown out by the constantly changing environment.

Rewards:Rewarding employees for their excellent professional performance over and above their usual wages and salaries boost up their morale and encourage
others to work hard. Reward systems are to be looked after by HRD. By rewarding hard work employees are motivated further. Output goes up. It leads to
maximum utilization of available human resources to enhance productivity. Rewards are one of the ways to frustration, depression and dissatisfaction from the
employees. Slow work tendencies can also be removed.
Counseling: Counseling is an essential instrument of HRD. It serves several purposes. Counseling is a
service provided to the employees regarding their personal problems. For this purpose services of
professional counselors need to be obtained. It reduces employee turnover, absenteeism, tardiness
and helps in strengthening the superior subordinate & relationship, understanding problems of
juniors and seniors thereby facilitating better communication and effective decision making. 

Quality Circle: Quality circle is a small group of people doing same or similar work.
They meet voluntarily together on regular basis for an hour per week, during office
hours under the leadership of their supervisor and trained to identify, analyze and
solve some of the problems of their work and submit solutions to management.

Role Analysis: Role is a set of expected behaviour patterns attributed to a person occupying a given
position in a unit. Every employee has a role to play. Everyone does not have to be consistent and
regular in one role. Employees have to play diverse roles both on and off the jobs. To understand the
behaviour of a person, it is essential to know what role he is currently playing. The attitude and
behaviour of a person vary with the role identity. Roles change according to the circumstances.
Performance management Examples

HSBC
HSBC now has an HR mobile app where employees and managers can easily capture
achievements and share feedback.
Employees can access an HR-to-do list, their performance and development plans,
online learning resources, and manage their personal employment information.
Managers can handle approvals on the go, set goals, and regular check-ins to
maintain productivity and facilitate continual growth. 
The app lends itself well to flexible and remote working models without
compromising results. It has created a stronger relationship between managers and
employees, where employees feel more supported, and end-of-year appraisals feel
more meaningful. 
Deloitte
Deloitte rolled out a pilot performance management
program that encouraged team managers to have frequent
check-ins with team members about their performance,
priorities, and strengths. Surveys completed by employees
helped team leaders understand the process from their
perspective and make improvements.
Custom career development plans were created for all
employees. What’s more, everyone was provided with a
career coach to help them develop. 
Data has been beneficial, particularly in helping
underperforming employees see where they sit in relation to
their colleagues, listen to constructive feedback, and take
action. It has also helped Deloitte understand people, team,
and leadership trends they haven’t been able to see before
this. One example is the connection between feedback
conversation frequency and employee performance.
IKEA set out to drive business performance by strengthening management and leadership
skills.
An accredited “train-the-trainer performance management coaching program” was created
for them and rolled out to 750 managers and supervisors across the UK. This included an
interactive seminar, developing coaching skills (aligned with the International Coaching
Federation), certification, and the identification of internal coaching champions. 
Departments with managers who attended performance management coaching training
saw a 5% KPI increase and went from 60% scores in management ability to 90% scores
across the board.