DEFINITION OF PERFORMANCE MANAGEMENT

A systematic approach to improving individual and team performance in order to achieve organisational goals Hendry, Bradley,and Perkins(1997) Performance management is about directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organisation. Walters(1995) Performance management is a means of getting better results from he organisation, teams, and individuals within an agreed framework of planned goals, objectives and standards Armstrong and Murlis(1994) An effective performance management system aligns individual performance with the organisations mission,vision and objectives American compensation association(1996)

Meaning of Performance Management(PM)

PM is a strategic and integrated approach

to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.

Comparision between performance appraisal and performance management

Performance appraisal

Performance management

Usually tailor made Applied to all staff Individual objectives may be included Some qualitative performance indicators may also be included Annual appraisal Top-down system with ratings Often linked to pay Monolithic system Complex paper work Owned by personnel department

Tailor made Applied to all staff Emphasis on integrating corporate,team and individual objectives Competence requirements often included as well as quantified measures Continuous review with one or more formal reviews Joint process,ratings less common May not be a direct link to pay Flexible process Documentation often minimised Owned by line management

Performance defined
Performance is something that person leaves behind

and that exists apart from the purpose. Kane(1996) Performance should be defined as the outcomes of work because they provide the strongest linkage to the strategic goals of the organisation, customer satisfaction, and economic contributions The Oxford English Dictionary defines performance as the accomplishment, execution, carrying out, working out of anything ordered or undertaken In general when one is managing the performance of teams and individuals, both inputs (behaviour) and outputs(results) should be considered. performance is how things are done as well as what is done

Factors affecting performance

Personal factors- the individuals skill, competence,

motivation and commitment Leadership factors- the quality of encouragement, guidance and support provided by managers and team leaders Team factors- the quality of support provided by colleagues System factors- the system of work and facilities provided by the organisation Contextual (situational)factors- internal and external environmental pressures and changes

Objectives of performance management

1. When people (individuals and teams) know and understand what is expected of them, and have taken part in forming these expectations, they will use their best endeavors to meet them 2. The capacity to meet expectations depends on the levels of capacity that can be achieved by individuals and teams, the level of support they are given by the management and the processes, systems and resources ,made available to them by the organisations

Aims/objectives of PM
Help to achieve sustainable improvements in organisational

performance Act as a lever for change in developing a more performance oriented culture Increase the motivation and commitment of employees Enable individuals to develop their abilities,increase their job satis faction and achieve their full potential to their own benefit and that of the organisation as a whole Enhance the development of team cohesion and performance Develop constructive and open relationships between individuals and their managers in a process of continuing dialogue which is linked to the work actually being done throughout the year Provide opportunities for individuals to express their aspirations and expectations about their work

Importance/Benefits of performance management

For the organisation 1.Align corporate, individual and team objectives

2.Improve performance 3. Motivate employees 4.Increase commitment 5.Underpin core values 6.Improve training and development processes 7.Help to develop a learning organisation 8.Enlarge the skill base 9.Provide for continuous improvement and development 10.Provide the basis for career-planning 11.Help to retain skilled employees 12.Support total quality and customer service initiative 13.Support culture change programmes

Importance contd.
For Managers Provide the basis for clarifying performance and behaviour expectations Afford a framework for reviewing performance and competence levels Improve team and individual performance Support leadership, motivating and team building processes Provide the basis for underperformers May be used to develop or coach individuals Offer the opportunity to spend structured quality time with teams and team members Provide the basis for providing non-financial rewards to staff (eg. Recognition, opportunity for growth and development

Importance contd
For individuals 1. Greater clarity of roles and objectives 2. Encouragement and support to perform well 3. The provision of guidance and help in developing abilities and performance 4. Opportunities to spend qualty time with their managers 5. Opportunities to contribute to the formulation of objectives and plans and to improvements in the way work is managed and carried out 6. An objective and fair basis for assessing performance

Scope of performance management

PM is about managing the organisation.It is a natural process of

management, not a system or technique It is also about managing within the context of the business(its external and internal environment) PM concerns everyone in the business-not just managers. It rejects the cultural assumption that only managers are accountable for the performance of their teams and replaces it with the belief that responsibility is shared between managers and team members

In short ,best-practice performance-management processes are part of a holistic (all-embracing) approach to managing for performance, which is the concern of everyone.

Nature of PM 1. It is a continuous process 2. It is flexible in nature 3. It is futuristic in nature 4. It is a participatory process 5. It is a means of controlling 6. It is behavioral in content 7. It is win-win philosophy

The performance management process

THE PERFORMANCE MANAGEMENT CYCLE

Review

Plan

Monitor

Act

The performance management sequence

Corporate mission and strategic goals
Business and departmental plans and goals Competence requirement Competence evidence Performance and development agreement Performance and development plan Action-work and development Continuous monitoring and feedback Financial reward Rating Formal review, feedback and joint assessment Performance standards Performance measurement