Performance management

Performance management includes activities to 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.
Performance Management as referenced on this page is a broad term. See Aubrey Daniels for a
detailed explanation of the origin of the term Performance Management (PM) which was coined
by Dr. Aubrey C. Daniels in the late 1970s to describe a technology (i.e., science imbedded in
applications methods) for managing both behavior and results, the two critical elements of what
is known as performance.

[edit] Where PM is applied

The PM approach is used most often in the workplace but applies wherever people interact
schools, churches, community meetings, sports teams, health setting, governmental agencies, and
even political settings. PM principles are needed wherever in the world people interact with their
environments to produce desired effects. Cultures are different but the laws of behavior are the
same worldwide. Armstrong and baron (1998) defined it as A strategic and integrated approach
to increasing the effectiveness of organizations by improving the performance of the people who
work in them and by developing the capabilities of teams and individual contributors
It is possible to get all employees to reconcile personal goals with organizational goals. One can
turn around any marginal business and increase productivity and profitability for any
organization, with the transparent and hidden forces embedded in this process. It can be applied
by organisations or a single department or section inside an organisation; as well as an individual
person.
The process is a natural, self-inspired performance process and are appropriately named the selfpropelled performance process (SPPP).
It is claimed that the self-propelled performance management system is:
1. the fastest known method for career promotion;
2. the quickest way for career advancement;
3. the surest way for career progress;

4. the best ingredient in career path planning;

5. the only true and lasting virtue for career success;
6. the most neglected part in teachings about management and leadership principles;
7. the most complete and sophisticated application of performance management;
8. the best integration of human behaviour research findings, with the latest management,
leadership and organisational development principles;
9. the best automated method for organisational change, development, growth, performance
and profit;
10. the surest and fastest way for increased motivation, productivity, growth, performance
and profitability for both the individual and the organisation;
11. the best career builder and career booster for any career; and
12. inspirational, as it gets people moving, makes them self-starters in utilising own talents
and initiative, automatically like magic.
First of all, deriving from the strategic plan, a commitment analysis must be done, where a job
mission statement is drawn up for each job. The job mission statement is a job definition in terms
of purpose, customers, product and scope. The aim with this analysis is to determine the
continuous key objectives and performance standards for each job position.
Following the commitment analysis, is the work analysis of a particular job in terms of the
reporting structure and job description. If a job description is not available, then a systems
analysis can be done to draw up a job description. The aim with this analysis is to determine the
continuous critical objectives and performance standards for each job.

[edit] Benefits
Managing employee or system performance facilitates the effective delivery of strategic and
operational goals. There is a clear and immediate correlation between using performance
management programs or software and improved business and organizational results.
For employee performance management, using integrated software, rather than a spreadsheet
based recording system, may deliver a significant return on investment through a range of direct
and indirect sales benefits, operational efficiency benefits and by unlocking the latent potential in
every employees work day i.e. the time they spend not actually doing their job. Benefits may
include :
Direct financial gain

Grow sales

Reduce costs

Stop project overruns

Aligns the organization directly behind the CEO's goals

Decreases the time it takes to create strategic or operational changes by communicating

the changes through a new set of goals

Motivated workforce

Optimizes incentive plans to specific goals for over achievement, not just business as
usual

Improves employee engagement because everyone understands how they are directly
contributing to the organisations high level goals

Create transparency in achievement of goals

High confidence in bonus payment process

Professional development programs are better aligned directly to achieving business level
goals

Improved management control

Flexible, responsive to management needs

Displays data relationships

Helps audit / comply with legislative requirements

Simplifies communication of strategic goals scenario planning

Provides well documented and communicated process documentation

[edit] Organizational Development Definitions

In organizational development (OD), performance can be thought of as Actual Results vs

Desired Results. Any discrepancy, where Actual is less than Desired, could constitute the
performance improvement zone. Performance management and improvement can be
thought of as a cycle:

1. Performance planning where goals and objectives are established

2. Performance coaching where a manager intervenes to give feedback and adjust
performance
3. Performance appraisal where individual performance is formally documented and
feedback delivered
A performance problem is any gap between Desired Results and Actual Results.
Performance improvement is any effort targeted at closing the gap between Actual
Results and Desired Results.
Other organizational development definitions are slightly different. The US Government's
Office of Personnel Management indicates that Performance Management consists of a
system or process whereby:
1. Work is planned and expectations are set
2. Performance of work is monitored
3. Staff ability to perform is developed and enhanced
4. Performance is rated or measured and the ratings summarized
5. Top performance is rewarded[1]
6. The field of performance management can comprise two separate types of management.
In one aspect of performance management, an analyst may view the performance of a
company as a whole, and also evaluate the effectiveness of the managers and heads of
companies in reaching goals. In another sense, performance management may be a
system of evaluating employees to help them reach reasonable goals and thus ensure that
the company performs better. This discussion will focus on the latter definition.
7. Performance management of individual employees differs. It generally includes the
following: planning work, setting goals, offering feedback and reviews, offering
opportunities to learn more in ones field, and rewarding employees who perform well.
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8. Employee performance management works best when work is planned and goals are
consistent. This may mean having a clear way to communicate regarding work expected
at the moment and upcoming work. Planning also includes defining expectations of the

employee so that he or she is not broadsided by evaluation criteria not included in

planning.
9. Planning and setting goals in performance management also creates a system of
predictable rewards for good performance, and consequences for poor performance. This
way the employee can reasonably assume the consequences of work performance,
whether good or bad.
10. Performance management also involves giving feedback to employees on a more
consistent basis than the average annual review. Instead, an employees ability to exceed
or failure to meet goals may be monitored on a monthly basis. This provides the
employee with either the opportunity to receive compliments and rewards fairly regularly,
or to make behavior changes sooner if performance is not up to par.
11. Often employees feel that end of the year reviews contain criticisms of work in the past
year that were never openly discussed with the employee. The employee benefits from a
more consistent model of performance management evaluation, since this gives a person
time to address issues and change problem issues.
12. In a performance management model, employees must also be given ways to grow and
develop in their field. This means giving opportunities to work on harder projects, pairing
less-skilled employees with expert employees, and offering team models where
employees can direct and make decisions. Greater responsibility and opportunities to
advance in ones field are essential to maintaining happy and productive employees.
13. Rewards are also a huge part of performance management. The greatest part of this is
rewards of monetary nature, either in bonuses or raises, when employees perform well.
As well, employees who actually are now qualified to work in a high level of their field
should be placed in positions of greater responsibility, and receive a greater share of pay.
Performance analysis should focus as much or more on positive performance than it does
on negative performance. Rewards for positive performance must be real and tangible, or
else the company runs the risk of becoming a negative action company only.
14. Employee performance management may be taught to companies who have difficulty
maintaining performance of employees or who have a long history of unhappy employees
and turnaround. Companies may hire experts in performance management to learn how to
model its concepts.

Management in the twenty-first century

As the twentieth century eases toward closure, there are indications that new
performance are aborning. Somehow, they seem to cannibalize the best from old
systems to weave the new. They leave behind the lock-step work flow of the engineered
assembly process and abandon the narrow specialization of work that characterized it.
In its place there is flexibility for the system to redesign itself around a multi skilled work
force, trained and empowered to make production decisions formerly reserved solely for
production engineers. This is one current variety of emerging performance system. But
it is probably only one of many new kinds of performance management systems with
potential to emerge in this age. Indeed, the pace of technological change may open the

door to a variety of performance systems, each suited to its particular industry or

market, each with its own character.
Management in the twenty-first century appears destined to face the challenge of
creating and re-creating ever more competitive and effective performance systems.
Doing so will require understanding and appreciation of the evolution of performance
systems through the nineteenth and twentieth centuries and understanding the basic
elements that made them successful. We may begin with an historical review of
performance systems and build to the present, identifying the characteristics of such
systems as we progress.

The first stirrings of modern shop management practices appear within the discipline of
industrial engineering. The dominant personality in this field unquestionably is Frederick
Winslow Taylor, the universally acknowledged father of scientific management. Taylor's
accomplishments training within a context of a robust and supportive work culture.
Indeed, one of the best paths to high performance at the turn of the twenty-first century
appears to be in systematic, purposeful construction of a performance culture formed
around the selected skills and attitudes of individual workers, augmented by intensive
training within a performance culture. Attention to relevant individual differences and to
work group values is indispensable to creation of such a culture. Indeed, an argument
for the necessity of discriminating good from poor potential workers probably turns on
the individual's potential to the shape and quality of organization culture. Ultimately, the
robustness of a culture is determined by the clarity, honesty and openness of its
communications. These are issues that must also be visited.