2.1.1.

Literature survey and details on Performance management

The central part of Performance management is rating employee’s performance as synergy.
Performance management is the process through which managers ensure that employee’s
[1]
activities and outputs contribute to the organization’s goals . The main requirements of the
process are to know what activities and output is desired, to observe whether they occur, and to
provide feedback to help employees meet expectations. While taking feedback from different
sources, managers and employees identify performance problems and try to resolve those
problems. It provides an opportunity for the employee and performance manager to develop
goals and jointly create a plan for achieving those goals. Development plans contributes to
organizational goals and the professional growth of the employee. Performance Management
being the most critical area of human resource management, the department relies on evaluation
results in determining the soundness of much developmental decision, which have direct impact
on the business surplus.
The Process of Performance Management

Figure 2.1 Process of Performance Management [2]

Purpose of Performance Management [2]

 1. Strategic purposes – To achieve the business objective of an organization, effective
performance management plays a vital role. Performance management does this help by
linking employee’s behaviour with the organizational goals. It starts defining what the
organization expects from each employee and at the same time it measures the performance
of each employee’s to identify either the expectations are met or not. Depending upon
performance measurement, the organization can take corrective action such as training,
incentives or discipline. Performance management can achieve strategic purposes on the
following condition.
➢ When performance measurements are truly linked with the organizational goals.
➢ When the goals and feedback about performance are communicated to the employees.
1. Administrative purpose – It is the way where organization uses the system to provide
information for day to day decisions about salary, benefits and recognition programs.
Decision making related to employee retention, termination for poor behaviour, hiring and
layoffs are supported by performance management. As the administrative decisions are
supported by performance management, the information in performance appraisal can have a
great impact on the future of individual employees.
2. Development purpose – It serves as basis for developing the employee’s knowledge and
skills. When the employee’s met expectations they become more valuable. Employees get
aware of their strength, weakness and areas of improvement by feedback of effective
performance management.
Tools of performance management [3]
1. Performance and development reviews
2. Learning and development
3. Coaching.
4. Objectives and Performance Standards
5. Competency and competencies
6. Measurement Pay
7. Team based work
8. 360 degree appraisal
9. Performance problem solving

Criteria for effective performance management [1]

Figure 2.2 criteria for effective performance management [1]
The aim of the performance management should be achieving employee behaviour and attitude
which supports the organization goals, strategy, and culture. If the organization strategy changes
the human resource personnel should help the managers assess how the performance
management system should change to serve the new strategies.
Example: - If a company emphasizes customer service, then its performance management system
should define the kinds of behaviour that contribute to good customer service.
Focus of Performance management [2]
1. Performance improvement
2. Employee development
3. Satisfying the needs and expectations of stakeholders
4. Communication and involvement
Conclusion
In today's management scenario Performance appraisals have become a tool of much importance.
With the help of objective and fair HR practices, Performance management can prove to be the
best. The outputs of which could be used for Organization development rather than for mere
employee efficiency improvement. If challenged casual and subjective appraisals will not be able
to stand the test of fairness and legality. Firms are thus being forced to emphasize a participative
but joint management by objectives followed by a participative, joint-periodic appraisal, to bring
more clarity into the system.