PERFORMANCE MANAGEMENT-What, Why & How?

When we talk about the five dimensions of Human Resource Management (HRM), we
list down the following, namely,
Performance Management,
Career Management,
Recruitment & Selection,
Training & Development, and
Compensation & Benefits Management.

These five dimensions, though equally important, often fail to secure equal attention
from Human Resource (HR) managers. The facts that performance management is
not just an annual performance appraisal and training is not the only solution to
effective performance are forgotten by the HR managers and the management team.
As a result, successful organizations, happy with their existing success status, are
actually deprived of a potential growth that could have been achieved should they
have invested more attention to performance management than only performance
appraisal. For instance, the total HR performance of your company is worth $10,
which means your employees’ performance is resulting revenue worth $10. Among
this set of employees, some are excellent performers, some are good, some
moderate and some poor. This difference in performance level are due to the fact
that some are using 100% of their potentials, some working below their full potentials
and some working at zero or marginal potentials. The challenge of equalizing the
difference in performance level lies in an objective performance management
system.

Prior to explaining what performance management is, it is important to know what

performance management is not, which will help you gain an insight that what your
managers have assumed to be performance management may be just an annual
performance appraisal confined to an hour’s meeting with a performance appraisal
form to be filled up and signed by the employee and his supervisor.

□ What Performance Management Is Not:

- it’s not just an annual performance appraisal

- it’s not imposing targets/goals on an employee by his supervisor
- it’s not only evaluating individual job performance

□ What is Performance Management:

- it’s Management By Objectives (MBO)

- it’s about setting SMARTER goals
- it’s about planning to perform
- it’s about periodically reviewing progress in performance
- it’s about evaluating performance for further improvement
- it’s about delivering reinforcement for performance success and performance
failure
□ What is the Performance Management Process/Cycle”:

The Performance Management Process begin and ends in the same cycle of events
which are as follows:

- Individual goal setting

- Performance planning
- Mid year performance review
- Annual performance appraisal

Under individual goal setting, the supervisor and the employee will sit together to set
annual goals at the year end; the goals are to be achieved by the employee at
designated quarters of the following year.

Under performance planning, the supervisor and the employee, during the same goal
setting session, will plan on how to perform in order to achieve the goals most
effectively and efficiently.

In the middle of the following year, the supervisor will review the employee’s
progress and achievements, advise and coach for better performance, give
recognition and appreciate for achievements so far and make changes in the
performance plan, if required; the progress of employee shall tell the supervisor
whether or not the all preset goals can be achieved in the given year.

At the year end, the supervisor and the employee will sit together to appraise the
employee’s performance in the given year and the feedbacks will all be fed into
setting new goals and action plans for the following year.

You may find the performance management process pretty easy, however,
implementing each phase of it requires an understanding of how individual
performance of all employees can translate into total organizational performance. As
regard to this, managers need to ask themselves the following questions:

WHAT TO ASK WHAT TO DO

What does the company want to achieve in Gain insight into the corporate vision
the long run?
What business does the company has to be in Gain insight into the corporate mission
to achieve its vision?
What will be the strategy to sustain in that Formulate corporate strategy
business?
What are the functional objectives supporting Set functional objectives
the strategy?
□ Operation of the Performance Management Process:
Individual Goal Setting & Performance Planning

- host a goal setting session between the supervisor and the employee
- list down the major goals to be achieved in a year in line with functional
objectives
- review goals to assess the feasibility of their accomplishments; make sure the
goals are SMARTER- Specific, Measurable, Actionable, Realistic, Time-framed,
Extended & Rewarding
- finalize goals for a year
- plan on ways to achieve the goals
- identify the possible barriers to achieving them
- plan on ways to overcome those barriers

Mid Year Performance Review

- host a performance review session between the supervisor and the employee
- discuss on performance progress status and seek accountability for missing
deadlines on goals
- revise performance plan (if needed) with new deadlines for goals

Performance Appraisal

- host a performance appraisal session between the supervisor and the

employee
- measure performance as against preset goals
- measure competencies as against required competencies set for current role
- measure potentials as against required competencies set for future role
- chalk out Individual Development Plan outlining to fill skill gap, motivation &
aspiration gap and communication & cooperation gap
- chalk out Reinforcement plan to reward/recognize for success and punish for
deliberate failure

The beauty of this Performance Management process is that it has three dimensions
only, which give three major outputs that can be fed into other four dimensions of
HRM and not to mention Performance Management also. The beauty is illustrated as
follows:

Performance Performance
Rating Scale Outputs
Assessment Measures
Performance Evaluation Preset Goals 5-points New goal setting
Required competencies
Competency Evaluation 5-points Development Plan
of current role
Required competencies Career Development
Potential Evaluation 5-points
of future role Plan

Those are the underlying standards that can be used by managers to

develop/customize existing Performance Management tools and put them in practice.
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