Performance management

meaning

Performance management is a process by which managers and employees work

together to plan, monitor and review an employees work objectives and overall
contribution to the organization. More than just an annual performance review,
performance management is the continuous process of setting objectives, assessing
progress and providing on-going coaching and feedback to ensure that employees
are meeting their objectives and career goals.

Definition

According to Goffman, Performance refers to all activity of an individual

which occurs during a period marked by his continuous presence before a
particular set of observers and which has some influence on the observers.

Performance management is the systematic process by which an agency

involves its employees, an individuals and members of a group, in
improving organizational effectiveness in the accomplishment f agency
mission and goals.

Principles of Performance Management

Translation

Clarification

Integration

Management

Commitment

Understanding

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 Communication

Feedback

Measurement

The principles of performance management

It translates corporate goals into individual, team, department and divisional

goals.

It helps to clarify corporate goals.

It is a continuous and evolutionary process, in which performance improves

over time.

It relies on consensus and co-operation rather than control or coercion.

It creates a shared understanding of what is required to improve performance

and how it will be achieved.

It encourages self-management of individual performance.

It requires a management style that is open and honest and encourages two-
way communication between superiors and subordinates.

It requires continuous feedback.

Feedback loops enable the experiences and knowledge gained on the job by
individuals to modify corporate objectives.

It measures and assesses all performance against jointly agreed goals.

It should apply to all staff.

It is not primarily concerned with linking performance to financial reward.

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Stages of the Performance Management Process

Purposes of Performance Management

Strategic Purpose means effective performance management helps the

organization achieve its business objectives.

Administrative Purpose refers to the ways in which organizations use the

system to provide information for day-to-day decisions about salary,
benefits, and recognition programs.

Developmental Purpose means that it serves as a basis for developing

employees knowledge and skills.

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Criteria for Effective
Performance Management

Fit with strategy

Validity

Reliability

Acceptability

Specific feedback

Performance Management II:

The Balanced Scorecard

Meaning

A balanced scorecard is a performance metric used in strategic management to

identify and improve various internal functions and their resulting external
outcomes. The balanced scorecard attempts to measure and provide feedback to
organizations in order to assist in implementing strategies and objectives.

Purpose of Balanced Scorecard:

A method of implementing a business strategy by translating it into a set of
performance measures derived from strategic goals that allocate rewards to
executives and managers based on their success at meeting or exceeding the
performance measures. The balanced scorecard (BSC) is a strategy performance
management tool - a semi-standard structured report, supported by design methods
and automation tools, that can be used by managers to keep track of the execution
of activities by the staff within their control and to monitor the consequences
arising from these actions.

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Balanced Scorecard Perspectives

1.Financial: How do we look to our Shareholders?

2. Customer: How do our Customers See Us?

3. Internal Business Process: What should we do that is Excellent?

4. Employee and Organization Innovation and Learning: Can we continue to

Improve and Add Value?

Performance management: EVA

Economic value added

EVA is the profit earned by the firm less the cost of financing the firm's capital

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Strategic dimensions of performance management

1. Quantity of work i.e. the quantity or amount of work produced or the

sheer volume of work completed by employees recognises hard-working
employees

2. Timeliness of work i.e. timely delivery of work in terms of schedules,

meeting deadlines, etc. recognises employees who produce work on-time
and meet deadlines

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 3. Quality of work i.e. the quality of work produced in terms of standards,
errors, waste and rework recognises employees who produce quality work,
work which meets standards and work with few errors or mistakes

4. Use of Resources/Efficiency i.e. produces work in an efficient way in

terms of using time, money, materials and other peoples time well
recognises employees who come in on budget with efficient use of time,
materials and people

5. Customer (External & Internal) Impact/Value Add i.e. work produced

meets the expectations of customers (external or internal) recognises
employees who do work that meets/exceeds internal or external customer
standards and expectations

6. Self-Reliance i.e. recognises employees who produce work without the

need for extensive supervision requires a reasonable level of support

7. Department Contribution the employee is helpful to others in the

department in getting work done and sets a tone of co-operation

8. Productive Work Habits the employee has an overall work style which is
effective and productive in terms of time management, setting priorities and
following-up on commitments

9. Adding Skills & Capabilities the employee is continuously adding new

capabilities in terms of skills, knowledge, and attitude to get work done in
new/better ways and building for the future

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 10. Alignment & Compliance the employee behaves in a way that is
aligned with the values, culture and mission of the organisation as well as
common organizational practices and procedures.

This is a very useful way to consider performance and incorporating the 10

dimensions really adds value to the performance management process.