Performance Management Process

Meaning
• Performance management planning is when companies create a strategy to
ensure organizational and individual goals are met.
• It’s the process of setting goals and other performance expectations for
employees and then creating a plan to meet those goals.
• A performance management plan maps out goal deadlines, sets a feedback
schedule, and anticipates what kinds of support employees might need.
 Elements of Performance management planning
• Evaluating current performance

• Setting new goals and expectations

• Allocating resources like budget, additional training, or software tools

• Monitoring goal progress

• Giving feedback and making goal adjustments if necessary

• Assessing performance after goals are complete

 Objectives of performance planning
• Performance planning clearly defines the purpose of the organization. The
purpose is to establish realistic goals and objectives consistent with that
mission in a defined time frame within the organization’s capacity for
implementation.
• After planning, the next task is to communicate those goals and objectives to
the organization’s constituents.
• We have to ensure the most effective use of the organization’s resources by
focusing the resources on the key priorities.
• Then to provide a base from which progress can be measured and establish a
mechanism for informed change when needed.
• To listen to everyone’s opinions in order to build consensus about where the
organization is going and where to want to reach.
• It provides a clearer focus for the organization, thereby producing more
efficiency and effectiveness.
• It is used to clearly identify the performance metrics used to measure
employee’s success in meeting predetermined targets.
• It produces great satisfaction and meaning among planners, especially
around a common vision which increases productivity from increased
efficiency and effectiveness.
• It solves major problems in the organization by providing ongoing on-the-job
feedback.
 Importance of Performance Planning
• Performance planning helps in aligning the individual goals with the
organizational goals and the concept behind this is mutuality for survival and
growth.
• This makes the process of performance management more accountable and
objective.
• It focuses on key results area and key performance area which must be
considered for gaining the competitive edge.
• Performance planning helps in maximum utilization of resources and it is
important to make clear in the role and responsibilities of employees.
 Performance planning process
1. Set SMART Goals
First, define what employees are working toward with a goal-setting conversation.
SMART goals in performance management are an effective way to approach
setting goals. The acronym stands for:

Specific, Measurable, Achievable, Relevant & Timely

Specific and measurable goals ensure that expectations are clear and goal progress
can be tracked. SMART goals are attainable or achievable rather than unrealistic
or out of reach. They serve a current need and are in line with the most up-to-date
business objectives, and their deadlines will be prompt.
 2. Develop a Performance Plan

After SMART goals are set, managers and employees work together to create a
performance plan that outlines the actions, resources, and timelines needed for
employees to achieve those goals.
3. Monitor and Evaluate Progress
Goal tracking and performance check-ins help employees stay on track with their
goals and keep managers in the loop about how they’re doing. They also tell
managers if goals need to be adjusted or if their direct reports need additional
support.
4. Provide Feedback and Coaching
Continuous feedback and coaching prevent a situation where employees work
toward their goals without guidance or assistance. Coaching doesn’t just help
employees achieve their goals — it also helps them improve their performance and
grow their skills as they go and gives managers the chance to share their expertise
 5. Review Performance and Adjust the Plan
Performance reviews are an integral part of performance plans. Regular reviews
allow organizations to see if goals are regularly being met or if employees tend to
fall short. On an individual level, reviews establish employees’ performance
history, including their goal achievement records. Regular reviews can show
whether or not performance management plans helped the employee achieve their
goals.
Flexibility is key when it comes to performance management planning, whether
goals aren’t being met or employees are knocking them out of the park. You may
need to revise goals, change one-on-one cadence, increase resources, or make other
adjustments to your original performance plan. The important part is that your
choices are informed by what the data shows.
 Barriers to Performance Planning
• Organizational Barriers: Most of the traditional organizations are not in
favour of performance planning. According to this concept, the organizations
spending time on performance planning is just a wastage of time. These
organizations believe that they have a strong implementation strategy and due
to this only, it becomes the barrier.
• For example, The Indian companies tend to spend 30% time on planning and
remaining 70% on implementation whereas the MNCs usually spend 70% time
on performance planning and the remaining 30% time on strategy
implementation.
• Individual Barriers: The lack of commitment in the organization’s employees
or management is another important barrier to performance planning.
Sometimes managers or employees or both show less commitment towards the
achievement of organizational goals and the reasons could be personal,
organizational, competitive or any other HR factor.
• For example, Organizational politics, workplace bullying or high conflict
causes employees to show less interest in their job responsibilities.
 Benefits of Performance Management Process
• Improved performance and productivity

• Alignment with organizational goals

• Employee engagement and motivation

• Clear communication and expectations

• Identification of strengths and areas for improvement

• Employee development and career advancement