This document provides an overview of a performance management system and measurement report submitted by Abdul Basit for Well Fit! Health and Fitness Clubs. It includes sections on performance management, key performance indicators, existing performance measurement frameworks, criteria for performance measurement system design, and issues related to performance measurement. The report analyzes performance management tools, models, and metrics to develop a proposed framework for Well Fit!'s performance measurement system.

1. WELL FIT! HEALTH AND FITNESS CLUBS
Performance Management System and Measurement Report
SUBMITTED BY: ABDUL BASIT (MBA HR)
SUBMITTED TO: SIR UMAR SHEIKH
DECEMBER 15, 2018

2. Acknowledgement
The accomplishment of this report benefits of the help and direction from my many people. We
students of University of Karachi (MBA) are extremely privileged to get it while the completion of our
‘Performance Management System project report on Well Fit! Health and Fitness Club currently
operating in UK.
We owedeep gratitudeto ourcourseguide, Mr.OmarSheikh forsuch supervision and assistance.Hetook
keen interest in our project work and guided us all along, till the completion of our project work by
providing all the necessary information for developing a good performance system understanding and
we’re thankful to all the people who provided us with the facilities being required and conductive
conditions for our MBA project.

3. Table of Contents
Introduction .....................................................................................................................................1
Performance Management.............................................................................................................1
Performance management tool ...............................................................................................3
Key performance Indicator (KPI)...............................................................................................3
Performance management tool ...............................................................................................3
Performance Management system ................................................................................................4
Performance measurement ............................................................................................................4
Existing performance measurement frameworks .......................................................................5
Criteria for performance measurement system design ...........................................................6
Proposed framework for performance measurement system .................................................6
Criteria for performance measurement system design ...........................................................6
Issue related to management of measure .....................................................................................4
Barriers to implementation success................................................................................................4

4. INTRODUCTION
Performance Management is a key process in any organization and should assist the management and staff
to focus on the key issues and business objectives to ensure sustainability.
Performance Management is therefore much more than merely telling a person what to do and “policing”
them until it is done. Rather, it is an integral part of the manager and the employee’s job – it is a joint
process. The bottom-line reality is that we all need to know what is expected in a specific role – if that is
lacking, uncertainty and frustration, resulting in demotivation and ineffectiveness, is created. This in turn
impacts negatively on company performance and long-term sustainability of the organization. To avoid
this, clear goals and objectives need to be defined and that is the crux of an effective Performance
Management system.
The report provides information all aspect of performance management of fitness and club industry .it
encompasses Performance management model, tool, key performance indicator and justification and
discussion range of relevant measurement and issue and challenges in measuring performance.

5. Performance Management
ProcurementExecutives’ Association (1999) defines performance management as: “the use of performance
measurement information to effect positive change in organizational culture, systems and processes, by
helping to set agreed-upon performance goals, allocating and prioritizing resources,informing managers to
either confirm or change current policy or program directions to meet those goals, and sharing results of
performance in pursuing those goals”. Organizations which do not integrate ongoing performance
measurement and feedback into their management development programs tend to experience lower than
expected performance improvements and higher dissatisfaction and turnover (longenecker & Fink, 2001).
Procurement Executives’ Association (1999), Guide to a Balanced Scorecard Performance Management
Methodology, Procurement Executives’ Association, .
Performance management Tool
1. Performance appraisals
When discussing the uses of performance appraisal, it is important to distinguish between organizational
goals, rater goals, and ratee goals. (Cleveland, Murphy, & Williams, 1989)described four types of uses of
performance appraisal: between person, within person, systems maintenance and documentation.
Between person uses are what have been referred to as administrative purposes, consisting of recognition
of individual’s performance to make decisions regarding salary administration, promotions, retention,
termination, layoffs, etc.
Within person uses are those identified in MBO, such as feedback on performance strengths and
weaknesses to identify training needs and determine assignments and transfers.
Performance appraisals also help in organizational goals, which are referred to as systems maintenance
uses. Examples of this type of purpose are workforce planning, determining organizational training needs,
evaluating goal achievement, identifying organizational developmental needs, assisting in goal
identification, evaluating the personnel system and reinforcing the authority structure.

6. Finally, documentation purposes are to meet the legal requirements by documenting personnel decisions
and conducting validation research on the performance appraisal tools. Organizations are attempting to
meet all these needs simultaneously while continuing to use tools that were designed for one type of
purpose. Thus, while organizations believe they need a performance appraisal system, they are unsatisfied
with the results. This dissatisfaction has historically motivated researchers to try to improve performance
appraisals and continue to do so
2. 360 Assessment
( hoffman, 1995)( p. 82) explains that 360° feedback is: an approach that gathers behavioral observations
from many layers within the organization and includes self-assessment. He points out that the feedback
recipient completes the same structured evaluation process that managers, direct reports, team members
and sometimes external clients use to evaluate his/her performance. (Lepsinger & Lucia, 1997) Indicate
that the 360° feedback process involves collecting perceptions about a person’s behavior and the impact of
that behavior from a number of rating sources. Therefore, a 360° feedback programme seeks to relay
feedbackto the recipient regarding his/her behavior in the workplace and how it affectsother organizational
members that work with that employee.
3. Dashboard
Dashboards are a particular type of Decision Support Systems (ARNOTT & PERVAN,2005) and can be
defined as “a visual and interactive performance management tool that displays on a single screen the most
important information neededto achieve one or severalindividual and/or organizational goals, allowing the
userto identify, explore, and communicate problem areasthatneed corrective action” ( (YIGITBASIOGLU
& VELCU , 2012)( p. 4). Dashboards incorporate visual and functional features, which in combination
help improve cognition and interpretation. (YIGITBASIOGLU & VELCU , 2012) .They may be used by
different users such as front-line workers to monitor inventory, by middle managers to analyze lagging
measures, and by executive managers to evaluate strategic performance against objectives.

7. Key Performance Indicator (KPI)
 Revenue per Client/Member
 Average Class Attendance
 Client Retention Rate
 Profit Margin
 Average Daily Attendance
Performance
Management System
After doing a lot of literature research,I noticed some similarities between certain models and theories.
Many of the models that I found had a similar content with similar steps – plan, act,monitor, review. Some
models had only had three steps without the ‘monitor’ step but some models had all of these steps or maybe
even few more (Smither & London, 2009) (Armstrong & Baron, 2005)
I chose to present the particular model of IiP’s because the three steps of plan, do, review have been
explained and divided into more steps which provides a better explanation to the model viewer (see figure
1). In comparison to the other similar models, it is easier to understand the phases in IiP’s model of
performance improvement process. According to severalauthors (Smither & London, 2009) (Armstrong &
Baron, 2005) .the first step ‘Plan’ is about developing different strategies and aligning organisational goals
with performance management. It is about e.g. creating a business strategy such as organisational goals and
values. It is also about creating a strategy for learning and development such as trainings or setting up a
people management strategy like establishing standards for expect ed behaviour (Smither & London, 2009)

8. However, all of these models concluded in one theory – plan, do, review. (Nickson, 2007), 149) has
introduced one of these models in his book which is the Investors in People (from here onwards abbreviated
as IiP) model for performance improvement process. (Nickson, 2007), 149
According to several authors (Smither & London, 2009) (Arm051) (Nic071), the next step ‘Do’ is about
taking action to improve the performance. The phase consists of performance appraisal, feedback and
rewarding, employee involvement in tasks and developing the employee’s performance by making an
action plan with the steps that need to be taken in order to develop the performance. According to some

9. authors (Arm051) there is another step called ‘Monitor’ between ‘Do’ and ‘Review’ which is about
monitoring the employee’s performance improvement and development after the feedback session.
However, IiP’s model only presents the step ‘Review’ as the last and third step which is about evaluating
the performance development with a review meeting or interview (Smither & London, 2009), (Boselie,
Paauwe, & Jansen, 2001) (Armstrong & Baron, 2005) (Nickson, 2007)
 Mabey has prescribed the model of performance management system in the form of ‘performance
managementcycle’.Thiscycle has5 elementswhichsuggesthow performance managementsystem
shouldbe implementedinanorganization.The elementsof performance managementsystem cycle
includes:
1. Setting of objectives.
2. Measuring the performance.
3. Feedback of performance results.
4. Reward system based on performance outcomes
5. And amendments to objectives and activities (Mabey et al, 1999).
(Aguinis, 2009) (Salaman, Storey, & Billsberry, 2005) (Mabey, Salaman, & Storey, 1999)

10.  After doing some research, I found a book by (Cardy & Leonard, 2011)where the authors have
described in detail their model of performance managementprocess(see figure 3). This model includes
the phases of the actualperformance,performance appraisal, feedback and performance improvement
for the future. Compared to the other approaches (see chapter 2.3.1 and 2.3.2), this model shows the
phases how to manage performance in detail which the other models were lacking. As mentioned in
chapter 1 of Introduction, my objective is to build a model that the hotel managers could use as a
framework with clear stages of employee performance management which would make it easier to
manage employee performance. Thus, I have used this model as the main framework for my thesis
and I will now provide the reader with a short description of the model.
The first step, performance, is about the achievements and outcomes that the employee has
accomplished with carrying out the job tasks. This phase focuses on three factors such as job
analysis, definition of performance and criteria. Job analysis is about indentifying what the job
consists of, such as the tasks, duty areas etc. The definition of performance focuses on determining

11. the approach that is used to measure the performance – behavioural or outcome approach. The
behavioural and outcome approaches will be explained further under chapter 2.4. Additionally, the
need for defined criteria and performance standards for measuring the performance will be
explained. (Cardy & Leonard, 2011) (40-48.)
The second step, diagnosis, deals with identifying the problem and solving it by trying to
understand why something occurred. This step focuses on the correct way of making a diagnosis
by observing the performance with an ‘observation cube’ and recording the data. The phase also
contains the causes of performance. Diagnosis is the source of curing performance problems, it
helps to influence evaluations in performance and helps to solve a conflict by analysing both parties
not only one and thus, gives a clearer overview and better explanation to the problem. Just like an
investigator, a manager has to make a diagnosis what might be the causes for the problem or the
death. Based on the authors, diagnosis must be made very carefully since a rushed conclusion can
create bigger conflicts between the employees and the manager. (Cardy & Leonard, 2011)(85-95.)
.
Evaluation, the third step, is about judging how poor or good the observed performance was. The
phase focuses on the correct way of evaluation, development methods and, evaluating results. Just
like a teacher has to evaluate the students by grading them, a manager has to determine the quality
of the work of the employees as well. Common evaluative standards and agreed-on criteria is a
must in order to evaluate the performance correctly and fairly. (Cardy & Leonard, 2011)(110-120)
.
The fourth step, feedback,focuses on the skill of giving effectively provided feedback since giving
a feedback to an employee can be challenging if it is not given carefully. The phase also focuses
on the fact that feedback must focus on the improvement of the performance not on the judgment
of the employee. The step also focuses on the timeliness and on the frequency of the feedback.
(Cardy & Leonard, 2011)(140-146.)
The fifth stage is dealing with feedback since the employee has to understand the message of the
feedback and deal with his or her emotional reactions that may occur. The phase also describes six
approaches to manage the influence of evaluator affect which can cause from liking the employee,
mood or other factors. The stage also brings out the possible emotional reactions to the feedback

12. and the actions to prevent the emotional reactions from the evaluator and the worker perspective.
(Cardy & Leonard, 2011)(169-183.)
The second last stage,improving performance,is focusing on the concrete steps that a manager can
take in order to improve the employees’ performance levels. The phase describes the two
performance causes – person and system, and brings out different approaches to improve
motivation such as goal setting. (Cardy & Leonard, 2011)(205-227.)
The last stage of future performance is about improving the performance in the future and starts the
process all over again. However, I will not take this step into my model because I will create my
model as a continuous circular cycle that already represents the continuance of the process in the
future. (Cardy& Leonard,2011)(6) they Have focused with their model on the processof managing
performance but have not included the pre-performance phase about the factors that can influence
the performance. Therefore,I will combine the model by Cardy and Leonard (2011, 5) with some
elements from the model by Jones and Lockwood (2002, 51) (Jones & Lockwood, 2002).in order
to make the managers aware of the whole process of performance management that starts already
before the actual work performance with setting the organizational goals and meeting the
expectations

13. Performance Measurement
Measurement provides the basis for an organization to assess how well it is progressing towards its
predetermined objectives, helps to identify areas of strengths and weaknesses, and decides on future
initiatives, with the goal of improving organizational performance. Measurement is not an end in itself, but
a tool for more effective management. Results of performance measurement indicated what happened, not
why it happened, or what to do about it. In order for anorganization to make effective use of its performance
measurement outcomes it must be able to make the transition from measurement to management. It must
also be able to anticipate needed changes in the strategic direction of the organization and have a
methodology in place for effecting strategic change. This concept is identified as performance management
in performance measurement literature. (longenecker & Fink, 2001)
Existing performance measurement frameworks
1. Performance pyramid system
This framework distinctly ties together the hierarchical view of business performance measurement with
the business processview ( (Kennerley & Neely,2001) this system monitors performance at different levels
of organization. It makes clear-cut difference between measures that are of interest to external parties –
customer satisfaction, quality and delivery, and measures that are primarily of interest within the business
– products, cycle time and waste. (Bond, 1999) Argues that direct personnel measures have not been
considered in this approach as well as in balanced scorecard approach. (Hudson & Smart, 2001) Outlined
the main problem with this approach. He identified that this approach fails to specify the detail relating to
the form of measures of performance or the process for developing them, with no apparent scope for lead
measures of performance.
2. Balanced scorecard framework
(Kaplan & Norton, 1992) Presented balanced scorecard framework for measuring performance of an
organization. The balanced scorecard approach allows the managers to look at a business from four

14. important perspectives – financial perspective, internal perspective, customer perspective and learning and
growth perspective (Neely, 2002). Identified that the strength of this framework is the way in which it
integrates different classesof organizational performance.. (Anthony & Govindorajan, 1998) Comprehend
that it is a tool for focusing an organization, improving communication, setting organizational objectives
and providing feedback on strategy. It also measures how employees performed in relation to corporate
strategy. The balanced scorecard is conceptually and intuitively appealing, however, the culture and needs
of an organization needs to be considered before designing a balanced scorecard.. The balanced scorecard
also shows a lack of consideration to the measurement of human resources, employee satisfaction, supplier
performance, product/service quality, and environmental/community perspective (Brown,1996) (Lingle
& Schiemann, 1996 march) (Maisel, 1992) . An additional deficiency outlined by (Smart, Bourne, &
Hudson, 2001) is the lack of integration between the top level, strategic scorecard and operational level
measures, which makes the execution of strategy problematic. Furthermore, it fails to specify a user
centereddevelopment process.Itis evident from the balanced scorecardthatsome reference ismade to lead
performance measures within the non-financial dimensions like innovation, learning, and customers.
Therefore, lead elements were present in this approach, but were not fully developed.
3. Performance prism
(Kennerley & Neely, 2001) Outlined that the performance prism is a multi-faceted framework, which
attempts to address the shortcomings of the frameworks that are currently available. (Neely, 2002) argues
that the performance prism can be considered asa second-generation performance management framework.
The framework has been deliberately designed as a highly flexible so that it can provide a broad as well as
narrow focus. The performance prism consists of five interrelated perspectives namely stakeholder
satisfaction, strategies, processes, capabilities and stakeholder contributions.
These five perspectives provide a comprehensive and an integrated framework for thinking about
organizational performance. (Neely, 2002) and Wivel, Senior Partner in the Danish Arm of Ernst and
Young, argued that “It will not be possible to create shareholder value without creating stakeholder value”.
The performance prism provides a broader view of stakeholders than the balanced scorecard,which makes
reference only to customersand shareholders.In the tomorrow’s company report,the Royal Society of Arts,
Manufacturer and Commerce (RSA) suggested that competitive success in future would depend on
management taking an inclusive approach in meeting the needs and indeed, requirements of all
stakeholders. The performance prism also considers both regulators and pressure groups that are
stakeholders with growing significance and power in the current dynamic business environment. The

15. performance prism enables to provide a balanced picture of the business, significantly highlighting external
and internal measures,as well as enabling financial and non-financial measures and measures of efficiency
and effectiveness.
Criteria for performance measurement system design
(Keegan, Eiler, & Jones, 1989) Outline three distinct steps for developing performance measurement
system: (1) defining strategic objectives of the firm and deciding how they can be translated into divisional
goals and individual management actions; (2) deciding what to measure; and (3) installing performance
measurement system into management thinking, possibly through the budgeting process.
(Wisner & Fawcett,1991) Suggested a nine-step processfor performance measurement system design. This
process is similar to that of the process suggested by (Keegan,Eiler, & Jones,1989) , but it makes explicit
that the systembe regularly reviewedand updated. Kaplan and Norton (1992) paid no attention to the design
of performance measurementsystem,but in 1993 they developed an eight-step process,which they believed
that it enables management to design balanced measurement systems.. (Beamon, 1999) Presents a set of
characteristics that are found in effective performance measurement systems, and can therefore be used in
evaluation of the measurement systems. These characteristics include: inclusiveness (measurement of all
pertinent aspects), universality (allow for comparison under various operating conditions), measurability
(data required are measurable), and consistency (measures consistent with organization goals). However,
the characteristics suggested by Beamon dose not consider applicability, i.e. the extent to which the
measurement system is applicable. The following characteristics may be considered for the evaluation of
the existing performance measurement systems: .
 Inclusiveness; .
 Universality; .
 Measurability; .
 consistency;
 Applicability.

16. Proposed framework for performance measurement system
Most of the existing performance measurement systems used in organizations lack the flexibility to change
as they focus on the past as opposed to the future. In today’s highly dynamic environment, it is not
appropriate to view the design and implementation of a performance measurement system as a sequential
process. The design, implementation and use of measurements should be a simultaneous and continuously
evolving process in which changes in the strategic direction and learning requirements of an organization
are constantly accounted for. It ensures a speedy and effective implementation of the formulated strategy).
(Feurer & Chaharbaghi, 1995)
A critical examination of above literatures suggest that a good system of performance measurement should
exhibit the following characteristics:
 Measure performance from a multi and interrelated perspective; .
 Be valid, reliable and easy to use; .
 Be linked to the organization’s value and strategy; .
 Being sensitive to changes in the external and internal environment of an organization i.e. contains
lead measures of performance; .
 enable comparisons to be made and progress to be monitored; and
 . be based on the critical success factors or performance drivers
(MacLean & Chelladurai, 1995) Supports that a fitness instructor’s evaluation field should include
knowledge of the subject, teaching efficiency, classroom management trainee’sactivity levels, use of voice,
a variety of activities and exercise, communication and administrative skills.
(Penman& Adams,1980) Counted the essentialprofessional possibilities and assessmentfields of a fitness
trainer as follows: a) Financial management regarding budgets, equipment and employees b)
communication skills c) public relations d) knowledge e) quality service f) personality g) organizational
management skills h) activities management i) equipment management j) knowledge and corporate culture
management
According to (Stiff, 1993) the important skills that a physical education instructor must hold are: high
module level, professionalism, excellent customer management, communications skills, first aid basic
skills, computer knowledge skills, marketing skills, skills of setting personal targets and appropriate dress
code., According to (Eickhoff, 2004) assessment criteria may include: a) quality indicators regarding the

17. warming up of the trainee, the gradual increase of intensity, adaptability at the trainee level b) Instructions,
feedback,interest for the trainee and c) issues, such as selecting and adjusting exercises, charisma, energy,
a variety of intensity control, security, use of music, etc.
Issue related to management of measure
No Performance Management System is absolute and error free one how so ever the best attempts are being
taken at strategic, tactical and operational levels. The execution of appraisal policy is an important
dimension of PMS.
 Poor judgment by the appraiser,
 lack of performance feedback
 inadequate resources,
 unrealistic expectations,
 failure to communicate the performance expectations,
 harassment,
 biasness in rating,
 Lack of attention, unfair treatment to employee/s are some o f t h e m a in p r o b le m a t i c
is s u e s in P MS. (Kohli & T, 2008)

18. Implementing organizational change initiatives
Changingindividual employeebehaviourliesatthe heartof organizational change programmes . (Porras
& Robertson,1992).Seniormanagementcanassume thatbecause theyare readyto pro-actively
embrace change,theiremployeeswillbe equallypro-active.However,imposingactiononemployees
whoare not preparedresultsinconflict (Deloitte &Touche,1996)
The kaleidoscope Change Kaleidoscope
The kaleidoscope ChangeKaleidoscope theorywasdevelopedbyHope Hailey&Balogunhasthree rings:
1. The outer ringrelaystothe broaderstrategicadjustmentcontext.
2. The central ring relaystospecificcontextual issuesthatneedtobe consideredwhenexpressing
a revolutionplan.
3. The internal circle givesasetof choicesof selectionsandinterferences,designselections
obtainable tochange.
 Time -Howrapidlyischange required?Isthe associationinemergencyorisitconcernedwith
longer-termvital improvement?

19.  Scope -What degree of change isneeded?Doesthe change affectthe wholeorganizationor
onlypart of it?
 Preservation -Whatauthoritativeresources,attributesandpracticesneedtobe keptupand
securedamidchange?
 Diversity -Are the diverse staff,expertgatheringsanddivisionsinsidethe associationgenerally
homogeneousormore variousasfar as qualities,standardsanddisposition?
 Capability -Whatisthe level of authoritative,administrativeandindividualcapacitytoexecute
change?Is there a needtoenhance thisabilitybefore the change methodologycanbe begun?
 Capacity -Howmuch assetcan orgnaisationINVESTinthe proposedchange asfar as money,
individualsandtime?
 Readinessforchange – Howpreparedforchange are the representativesinsidethe association?
Is itaccurate to say that theyare both mindful of the requirementforchange androusedto
conveychanges?
 Power-Where isthe force vestedinside the association?Whatamountof scope of carefulness
doesthe unitexpectingtochange andthe change pioneerhave?
Essays,UK. (November2013). The change kaleidoscope.Retrievedfrom (Balogun&Hope,1999)
Barriers to implementation success
Lack of senior managementcommitment
The implementation process within the company lacked active senior management support,
participation and leadership. Some senior managers attempted to undermine the acceptance of
the new system; others showed ambivalence towards it: Studies show the detrimental impact a
lack of management commitment can have on implementation of change initiatives (Hansson,
Backlund, & Lycke, 2003) (Trader-Leigh, 2002)
Employee resistance tochange
Employee commitment to change programmes is crucial given that they actually execute
implementation activities (Hansson, Backlund, & Lycke, 2003).Low employee commitment
could therefore obstruct acceptance of an implementation process (Saad & Siha, 2000)
Inadequatetrainingand support
Surprisingly, given the level of resources provided for the rollout of the new performance
management system, employees at every level of the organization appeared to lack the necessary
knowledge and skills required for their particular contribution to the system's implementation

20. Evaluation
(Armstrong & Barron, Performance Management,1998) suggest that evaluations yield useful findings and
insights on which an organization can act upon. From their knowledge and understanding they believe that
the following evaluation methodology provides an understanding of what is going well and the issues to be
addressed:
• A working group of people from within the organization should carry out the evaluation to ensure
credibility and acceptability.
• Those involved in the evaluation should be briefed to ensure they understand the philosophy behind the
scheme.
• Individual and group discussions with a cross section of the population should be conducted.
• A confidential survey should be carried out.
• The deliverables of the current scheme should be made in terms of assessing the quality of the process,
supporting documentation, performance ratings.
• The findings should be presented in a report.

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