Performance Management


Definition Of Performance Management 

According to Armstrong and Baron(1998) Performance management can be defined as a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who works in them and by developing the capabilities of terms and contributors. This can improve the effectiveness of the activities of the employee tasks involved hence the productivity of the organization can be increased.

Further Bates and Haton (1995) defines Performance management as a multi-dimensional construct, the measurement of which varies depending on a variety of factors. It is important to determine whether the measurement objective is to assess performance outcomes or behaviors.


Why Performance Management ?

As Armstrong and Baron stated that “the overall purpose of performance management is to contribute to the achievement of high performance by organization and its people.” High performance is acquiring the desired targets by developing the capacity and potentials of present people who are contributing in the achievement of the organizational goals.Following are the factors that describe why performance management should be added in an organization.

  •  Performance is different from other activities in an organization.
  •  In order to achieve the higher returns/potentials key performance areas give directions for the managers.
  •  Observing the past performance records will ensure to learn the weaknesses and pave the way to the future in an effective manner.
  •  Organizational, Functional and Individual goals can be easily identified by this process.
  •  By implementing an action plan the tasks that should be done, who should do and how should be done can be denoted.

Performance Management Model




   Plan: Performance Management begins when the supervisor reviews the employee’s position    restriction, communicates competencies, creates goals, and discusses them with the employee. This helps establish mutual understanding of the performance and behavioral expectations.


Coach:  The supervisor provides coaching and feedback throughout the year to help their employees successfully reach their goals. The goals and any other documentation created during the Plan phase become a working document to be referenced, and revised if necessary, throughout the performance review period. The supervisor and employee can each create notes about employee performance at any time which are tracked outside the Workday system.


    Evaluate:During the evaluation process, the supervisor may rely on multiple resources, such as the employee self evaluation, performance notes created during the year, accolades, and customer feedback to assess the employee’s performance. The supervisor meets with the employee to discuss the performance evaluation, explain the ratings, and provide feedback about strengths and areas for improvement. The supervisor then completes the evaluation in Workday and sends it to the employee to review and acknowledge before formally closing the review in Workday.


    Reward: The supervisor recognizes and rewards performance at year-end and during the year as merited.The employees are satisfied mentally so the tasks are completed with less obstructions.This final stage is essential since the motivation will be increased and they get attracted to work more so the effectiveness of the organization will be higher than expected levels.



 

Benefits of Performance Management

Managing Employee Performance and aligning them into organizational strategic and operational goals, as I am into real states where most of the sales employees are highly committed to their target, and there are few are not that committed, most of the times employees are not that aware why they should hit their targets, sometimes employees tend to think they should enhance their performance because it’s their job, but as a professional my opinion is any organization should do performance management accordingly,  recently I found my organization should focus more on Performance Management it will give us following benefits Baron (2004)

  • Will align the entire organization toward top management goals
  • Will enhance continues sales growth and profitability
  • Reduce time to create strategic plans frequently
  • All employees will be motivated and learn about their importance
  • Will reduce wastes
  • Will help Managers to identify each subordinates roles

 

References

  •  Armstrong, M. (2006).‘A Handbook of Human Resource Management Practice, 10th edn.,London, Kogan.

 

  •  Performance Management model [Online] available at: https://www.employees.tamu.edu/pd/performancemanagement/performance-management-model-pcer/ [Accessed on: 25th May 2020].

 

  • Video :Performance Management.[Online] available at:https://www.youtube.com/watch?v=zLOZCwegCus[Accessed on: 25th May 2020].

 

 

  • Figure : Performance Mangement Model:[Online] available at :https://employees.tamu.edu/pd/performancemanagement/performance-management-model-pcer/[Accessed on: 25th  May 2020]. 

 

 

 

 

 

Comments

  1. How can we reduce wastage by performance management?

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    Replies
    1. Companies generate waste everyday but do not manage them properly. Waste management is very important for a companies’ profitability. This is because if a company can manage its waste properly, reduction in waste can help the company to reduce its cost. Cost control is an important element in performance management.Further most of the organizations in Sri Lanka add cost control to employees performance appraisal as a key area to be achieve.There are a lot of methods that can be used to manage waste, for example, to dispose the waste properly, recycle or reuse the waste which have residual value, or minimize the waste generated by the companies. Environmental management systems, green supply-chain management, reverse logistics, workforce education and training and Incentive Rewards Programs (IRP), can help companies reduce their waste and same will help to achieve the target set by KPI’s of employees.Most effective waste management methods that can help the companies to reduce their cost and thus increase their corporate profits.

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  2. I think this concept is trying to use in modern organisation. But it is very challenging as my view. Do you have any example for organisation which is overcome to these challenges.

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    Replies
    1. Buddima,

      Most of the modern day organizations are use this concept and as you mentioned it's a challenging one. But once adapting to this make ease the performance management.Private sector bank's in Sri Lanka use this concept for their performance management and evaluvation. Eg: Commercial Bank , Sampath, HNB

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  3. What will be the main difference between performance management & KPI based management system ?

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    Replies
    1. Hi Sajith,

      Performance management deals with taking action based on the results of the evaluation and ensuring the target results are achieved. Performance measures (KPI’s) quantitatively tell us something important about our products, services and the processes that produce them. It means in simple terms as measurements of business activity.

      Performance management is the overarching process that deals with performance.It reflects the approach one entity has towards performance and it includes sub processes such as: strategy definition (planning / goal setting), strategy execution, training, and performance measurement.

      But in a performance management system, KPI’s more than just measure business activity and how we want measure performance aligned with business strategy.
      The only difference between performance management and a KPI is that a KPI embodies a strategic objective and measures performance against a goal. The goals attached to a KPI are multidimensional: they have ranges that are encoded, a time frame by which the goals must be achieved, and a benchmark against which the goals are compared.

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  4. Hi Ajith,
    When and how do you set long-term personal development goals within the performance management process?

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    Replies
    1. Hi Eranga,
      Following ways can be use for personal development goals and we can set these goal at the time of setting up of performance management process for employees.

      1.Create a vision. First, assess your performance and your desires to identify what your personal development goals are.

      2.Develop a plan. The next step is to create a plan to achieve your vision.

      3.Track your progress.Record your development as you work on your goals.

      4.Review your plan regularly

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  5. Hi Ajith,How can the performance management be implemented in high productivity?

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    1. This comment has been removed by the author.

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    2. Hi Lakmal,Following ways by many companies to increase productivity collaboration with performance management.

      1.Employees set SMARTer Objectives and manage their Personal Development Plans.

      2.Managers can capture Action Points from Check-Ins.

      3.Whole teams can gain Real-Time Feedback.

      4.Improve collaboration amongst teams.

      5.Improve HR efficiency.

      6.Secure, backed up data.

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  6. Hi dinushi,

    In today’s data-driven culture, everyone is tracking their bottom line performance metrics. While this is crucial, it only represents end results, not the process that led to them.

    Like any form of data analysis, figuring out what’s going on with employee performance starts by picking a framework that helps you collect, prioritize, and interpret data.
    Performance evaluation methods differ in core assumptions and how they’re applied. Picking one influences all the steps that follow, so it’s crucial to choose carefully. Most brands end up combining several methods and may use them at different points in an employee’s career.
    Few of the methods of performance evaluations for an organization as follows,

    1. Management by Objective (MBO)
    2. Critical Incident Method
    3. Checklist Method
    4. 360-Degree Performance Appraisal
    5. Self-Evaluation
    6. Ratings Scale
    7. Performance Test

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  7. Dear Ajith, How do you think a multi national companies should handle their employee performance reviews? Is it possible to handle them in a same manner?

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  8. Dear Amila,
    Performance evaluations provide a way for managers and individual contributors to work together to increase employee performance through training, mentorship and collaborative goal setting. Performance reviews introduce new challenges when rolled out in a multinational company with employees from diverse cultural backgrounds. Fairness is the key to an effective multinational performance evaluation program, but using a one-size-fits-all approach across cultures does not always result in true fairness. Setting global standards that transcend cultural nuances, utilizing local leaders to perform reviews and localizing the actual procedures of evaluations are a few tactics that can increase the fairness and effectiveness of multinational evaluation procedures.

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