The document outlines the components and functions of a performance management system (PMS), emphasizing a continuous cycle of planning, performance, reviewing, and development. It discusses the importance of feedback, employee engagement, and setting clear performance standards, with various models such as Deming's cycle and the Torrington & Hall model highlighting effective practices. Additionally, it emphasizes the role of transformational leadership and 360-degree feedback in improving organizational performance and fostering employee growth.

1. ,
Characteristics of Healthy Organizations, 360 Degree
Feedback and its relevance, Steps in giving a
Constructive Feedback Levels of Performance Feedback,
Performance Goal Setting – Setting of Objectives.
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2. Performance Management System
 The Performance management system is developed mostly according to
the needs, size and resource availability in an organisation.
 Lots of models of Performance Management Systems are developed all
over the world.
 Generally speaking, the basic model of a Performance Management
Systems comprises of four major components.
1. Setting of performance standards
2. Measuring or evaluating the performance
3. Quality Improvement process
4. Progress monitoring, reporting and rewarding
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4.  In other words, we can say, it is a cycle of
1. Planning
2. Performance
3. Reviewing and
4. Developing the employee’s performance as a continuous process.
Performance Planning
 Performance planning is the first crucial component of any performance
management system.
 It is a mutual understanding over discussion between the reporting officer and the
employee.
 The employee decides upon the targets and key performance areas which can be
performed over the given period. The standards are set on the agreement of both
superior and the employee. 4

5. Performance Period
 During the period of performance, the employee and the superior faces with ups and
downs of accomplishing certain tasks, and may not able to complete specific ones.
 Employee is encouraged and motivated by the superior to finish his task.
 Performance monitoring is maintained by the superior and the journal of work is
maintained by the employee for a better review.
Performance Reviewing and Appraisal
 Normally performed twice in a year in an organisation in the form of mid reviews and annual
reviews which is held in the end of the financial year.
 In this process, the appraisee first rates himself, called as self appraisal. Usually this comes
as form to be filled in with given set of measurable variables.
 The achievements and obstacles may be filled in by the employee, apart from the regular
duties. As the next step, the employer or the appraiser provides ratings to the appraisee, the
one who is appraised.
 The entire process of review takes an active turn when both the employee and the superior
discuss together the causes for gaps in the performance and how to bridge them effectively.
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6. Functions of Performance Management
System
1. Helps in clarifying the mission, vision, strategy, and values of the
organization to the employees in order to enable them achieve the same
2. Helps in improving various business processes as the deficiencies are
highlighted.
3. Helps in attracting and retaining talents in the organization and helps in
establishing a robust talent review system.
4. Facilitates competency mapping, training and development needs
identification, and implementation as part of the performance development
tool (employees have the competencies to met both the present and
emerging requirements of the organization)
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7. 5. Assists management in validating their recruitment and selection process and
techniques.
6. Helps employees attain their full potential and attain a balance between
work and personal life.
7. Improves organization’s ability to change faster by highlighting the gap
between potential capabilities and present ability.
8. Helps in making a shift from industrial relations to individual relations with a
focus for employee growth an development
9. Enables sustainable organizational competitiveness, innovation, and low
employee turnover by helping in reviewing organization structure and plan
succession.
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8. 8

9. objectives of PMS:
1. To leverage the performance of organisation, given that goals are complex
2. To ensure role, clarity performance objectives at all the levels of organisation
3. To encourage high performance work culture
4. To encourage team building in the organisation
5. Employee development by systematically identifying training and development needs
6. To improve relationship between manager and employees through a two way
communication process
7. To focus on process rather than on format
8. To encourage performance based rewards and recognitions in the organisation
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10. Deming’s Model
 In every organisation, the need for improving business performance should be
the driving force behind the action that most leaders take. Within the business
world, if you are not consistently improving performance within your
organisation you are stagnating.
 Therefore, the ability to continually improve performance should be a never-
ending goal. The Deming Cycle is one of the most straight forward ways of
being able to accurately plan for continual improvement. The Deming Cycle
can also help increase productivity as well as improve performance in general.
 The Deming Cycle was developed by W. Edwards Deming (1986)
 He put forward four logical steps that loop continually to help drive better
performance.
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11.  The Deming cycle, also known as the PDCA or PDSA cycle
 PDCA model is a useful approach for organizing and operating a PM system.
 The PDCA model not only can support system development and implementation, but can also
drive results-based culture change throughout the organization.
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12.  PLAN
In the planning stage, the organisation must establish what objectives are
needed to be met to create the desired goals. It is in this stage where the
organisation must analyse their current position accurately to be able to
correctly measure where they are, compared to where they want to be.
 DO
This stage of the cycle requires the organisation begin to implement their
plan and start the processes of behaviour changes. At this point, the
implementation of the plan should only be carried out within a small section
of the overall business. The organisation should also be collecting data to
help them evaluate the process in the next steps.
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13.  CHECK
The ‘Check’ stage is when the data collected from the ‘Do’ stage is measured and
compared against the expected goals within the ‘Plan’ stage. It is at this stage
when you should be looking for any differences between what has happened and
what the original goals were within the ‘Plan’ section. You should also be able to
identify if there were any deviations from your plan and what was implemented,
as this could account for lack of success in the ‘Do’ stage. This should lead to the
understanding of whether or not the goals set in the ‘Plan’ section are attainable.
If they cannot be reached, the process may need to end here and started again.
 ACT
Within this stage the organisation first needs to identify that all the other stages
were carried out correctly, i.e. the ‘Check’ stage identified that the ‘Plan’ stage
was correctly implemented within the ‘Do’ stage. Secondly, it needs to be
confirmed that the outcomes have resulted in improvements on what had come
before. If so, the process can then implemented throughout the whole
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14. The Torrington& Hall Model,
 The model developed by Torrington and Hall, in 1995, emphasises the point that
the performance management process is continuous, rather than static.
 The key is that when the first set of expectations are reviewed, more targets are set,
based on the current level of performance. This means employees and their managers
never stand still and are always working towards their next goal. This maintains
productivity and creates a learning environment where employees are always developing
new skills and striving for better performance.
 Mainly includes 4 steps
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17. Performance Feedback
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24. Role of transformational Leaders
 According to Kevin Ford, there are three effective leadership
styles:
• Tactical leaders focus on solving straightforward problems with
operations-oriented expertise.
• Strategic leaders are very future-focused with an ability to
maintain a specific vision while forecasting industry and market
trends.
• Transformational leaders focus less on making decisions or
establishing strategic plans, and more on facilitating
organizational collaboration that can help drive a vision forward.
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26. 4 I’s of transformational leadership
• Individualized consideration — Transformational leaders listen to
employees’ concerns and needs so they can provide adequate support.
They operate from the understanding that what motivates one person
may not motivate someone else. As a result, they’re able to adapt their
management styles to accommodate various individuals on their team.
• Inspirational motivation — Transformational leaders are able to articulate
a unified vision that encourages team members to exceed expectations.
They understand that the most motivated employees are the ones who
have a strong sense of purpose. These leaders are not afraid to challenge
employees. They remain optimistic about future goals and are skilled at
giving meaning to the tasks at hand.
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27.  Idealized influence — Transformational leaders model ethical
behavior. Their moral conduct earns a necessary level of respect and
trust. This can help leaders steer decision-making that works to
improve the entire organization.
 Intellectual stimulation — Transformational leaders regularly challenge
assumptions, take risks and solicit team members’ input and ideas.
They don’t fear failure, and instead foster an environment where it’s
safe to have conversations, be creative and voice diverse perspectives.
This empowers employees to ask questions, practice a greater level of
autonomy and ultimately determine more effective ways to execute
their tasks.
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29. Transformational leadership
encompasses several different aspects
• Emphasizing intrinsic motivation(actns driven by internal rewards) and
positive development of followers
• Raising awareness of moral standards
• Highlighting important priorities
• Fostering higher moral maturity in followers
• Creating an ethical climate (share values, high ethical standards)
• Encouraging followers to look beyond self-interests to the common good
• Promoting cooperation and harmony
• Using authentic, consistent means
• Using persuasive appeals based on reason
• Providing individual coaching and mentoring for followers
• Appealing to the ideals of followers
• Allowing freedom of choice for followers 29

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31. Conducting Performance Reviews
The performance review meeting/ Appraisal meeting/Evaluation Interview
 The performance review meeting is the basis for assessing the three key
elements of performance ( the three Cs ), namely contribution, capability
and continuous development.
 Such meetings are also the means through which the five primary
performance management elements measurement, feedback, positive
reinforcement, exchange of views, and agreement can be put to good use.
 A performance review should be rooted in the reality of the employees
performance
 It is necessary to communicate effectively with each employee his
performance.
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32.  It allows managers and individuals to take a positive look together at how
performance can become even better in the future and how any problems
in meeting performance standards and achieving objectives can be
resolved.
 Individuals should be encouraged to assess their own performance and
become active agents for change in improving their results.
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33. Michael Beer (1981) has identified three main sources of difficulty in
conducting performance reviews:
 the quality of the relationship between the manager and the
individual unless there is mutual trust and understanding, both
parties will see the performance review as a daunting experience
in which hostility and resistance are likely to emerge
 the manner and the skill with which the interview is conducted;
 the review process itself its purpose, methodology and
documentation.
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34. Objectives of performance reviews
1. Motivation to provide positive feedback, recognition, praise and
opportunities for growth; to clarify expectations; to empower people
by encouraging them to take control over their own performance and
development.
2. Development to provide a basis for developing and broadening
capabilities relevant both to the current role and any future role that
the employee may have the potential to carry out.
3. Communication to serve as a two-way channel for communication
about roles, expectations (objectives and capability
requirements), relationships, work problems and aspirations.
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35.  To let subordinates know where they stand.
 To recognise their good work.
 To point out how and where they can improve.
 To develop them on their present job.
 To develop and train them for higher jobs.
 To let them know how they may progress in the company.
 To serve as a record for assessing the department or unit
as a whole, showing where each person fits into the larger
picture.
 To warn some employees that they must do better.
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36. Some practical problems
The main problems that arise in conducting
performance reviews are fourfold:
1 Identifying performance measures and criteria
for evaluating performance.
2 Collecting factual evidence about performance.
3 Resolving conflict between reviewers and the
people they review.
4 Defensive behaviour exhibited by individuals in
response to criticism.
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37. Conducting a performance review meeting
 There are ten golden rules for conducting performance review meetings.
1. Be prepared.
Managers should prepare by referring to a list of agreed objectives and their notes
on performance throughout the year.
They should form views about the reasons for success or failure and decide where to
give praise, which performance problems should be mentioned, and what steps
might be undertaken to overcome them.
Some thought should also be given to any changes that have taken place or are
contemplated in the individual s roles, and to work and personal objectives for the
next period.
Individuals should also prepare in order to identify achievements and problems, and
to be ready to assess their own performance at the meeting. They should also note
any points they wish to raise about their work and prospects. 37

38. 2. Create the right atmosphere.
A successful meeting depends on creating an informal environment in
which a full, frank but friendly exchange of views can take place. It is
best to start with a fairly general discussion before getting into any
detail.
3. Work to a clear structure.
The meeting should be planned to cover all the points identified during
preparation. But time should be allowed for the individual to express his
or her views fully.
4 Use praise.
If possible, managers should begin with praise for some specific
achievement, but this should be sincere and deserved. Praise helps
people to relax everyone needs encouragement and appreciation
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39. 5 Let individuals do most of the talking.
This enables them to get things off their chest and helps them to feel that they
are getting a fair hearing. Use open-ended questions (ie questions that invite the
individual to think about what to reply rather than indicating the expected
answer). This is to encourage people to expand their views on topics.
6 Invite self-appraisal.
Self-appraisal aims to help individuals see how things look from their own point
of view and to provide a basis for discussion. Many people underestimate
themselves. Ask questions such as:
How well do you feel you have done?
What do you feel are your strengths?
What do you like most/least about your job?
Why do you think that project went well?
Why do you think you didn t meet that target?
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40. 7 Discuss performance, not personality.
Discussions on performance should be based on factual evidence, not
opinion. Always refer to actual events or behaviour and to results
compared with agreed performance measures. Individuals should be given
plenty of scope to explain why something did or did not happen.
8 Encourage analysis of performance.
Dont just hand out praise or blame. Analyse jointly and objectively why
things went well or badly and what can be done to maintain a high
standard or to avoid problems in the future.
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41. 9 Don t deliver unexpected criticisms.
There should be no surprises. The discussion should only be concerned
with events or behaviours that have been noted at the time they took
place. Feedback on performance should be immediate. It should not
wait until the end of the year. The purpose of the formal review is to
reflect briefly on experiences during the review period and on this basis
to look ahead.
10 Agree measurable objectives and a plan of action.
The aim should be to end the review meeting on a positive note
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43. How to Conduct an Effective
Performance Review
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44. Principles of Effective Feedback
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47. 360 Degree Feedback and its relevance
 360-degree feedback has been defined by Ward (1997) as :The
systematic collection and feedback of performance data on an
individual or group derived from a number of the stakeholders on their
performance.
 Collecting perceptions about a person’s performance & behavior from
the person’s:
1. Boss or Bosses
2. Direct Reports
3. Colleagues
4. Fellow members in the project team
5. Internal & external customers
6. Suppliers
7. Customers etc.
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48.  360-degree feedback is also referred to as multisource assessment or multirater
feedback
 The information is collected through questionaires and the feedback is given.
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53. USE OF 360-DEGREE FEEDBACK
 support learning and development.
 support a number of HR processes such as appraisal, resourcing and
succession planning.
 To support pay decisions.
360-degree feedback can become a powerful organizational intervention to
increase awareness of the importance of aligning leader behaviour, work
unit results, and customer expectations, as well as increasing employee
participation in leadership development and work unit effectiveness.
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54. DEVELOPMENT AND IMPLEMENTATION
 To develop and implement 360-degree feedback the following steps need to be taken:
1. Define objectives – it is important to define exactly what 360-degree
feedback is expected to achieve. It will be necessary to spell out the extent to
which it is concerned with personal development, appraisal or pay.
2. Decide on recipients – who is to be at the receiving end of feedback. This may
be an indication of who will eventually be covered after a pilot scheme.
3. Decide on who will give the feedback – the individual’s manager, direct
reports, team members, other colleagues, internal and external customers. A
decision will also have to be made on whether HR staff or outside consultants
should take part in helping managers to make use of the feedback. A further
decision will need to be made on whether or not the feedback should be
anonymous (it usually is).
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55. 4. Decide on the areas of work and behaviour on which feedback will be
given – this may be in line with an existing competency model or it may
take the form of a list of headings for development. Clearly, the model
should fit the culture, values and type of work carried out in the
organization. But it might be decided that a list of headings or questions in
a software package would be acceptable, at least to start with.
5. Decide on the method of collecting the data – the questionnaire could
be designed in-house, or a consultant’s or software provider’s
questionnaire could be adopted, with the possible option of amending it
later to produce a better fit.
6. Decide on data analysis and presentation – again, the decision is on
developing the software in-house or using a package. Most organizations
installing 360-degree feedback do, in fact, purchase a package from a
consultancy or software house. But the aim should be to keep it as simple
as possible.
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56. 7. Plan the initial implementation programme – it is desirable to pilot the
process, preferably at top level or with all the managers in a function or
department. The pilot scheme will need to be launched with
communications to those involved about the purpose of 360-degree
feedback, how it will work and the part they will play. The aim is to spell
out the benefits and, as far as possible, allay any fears. Training in giving
and receiving feedback will also be necessary.
8. Analyse the outcome of the pilot scheme – the reactions of those taking
part in a pilot scheme should be analysed and necessary changes made to
the process, the communication package and the training.
9. Plan and implement the full programme – this should include briefing,
communicating, training and support from HR and, possibly, the external
consultants.
10. Monitor and evaluate – maintain a particularly close watch on the initial
implementation of feedback but monitoring should continue. This is a
process that can cause anxiety and stress, or produce little practical gain in
terms of development and improved performance for a lot of effort.
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57. 360-DEGREE FEEDBACK – ADVANTAGES AND
DISADVANTAGES
 ADVANTAGES
 Individuals get a broader perspective of how they are perceived by
others than previously possible.
 Increased awareness of and relevance of competencies.
 Increased awareness by senior management that they too have
development needs.
 More reliable feedback to senior managers about their performance. l
Gaining acceptance of the principle of multiple stakeholders as a
measure of performance.
 Encouraging more open feedback – new insights.
 Reinforcing the desired competencies of the business.
 Provided a clearer picture to senior management of individual’s real
worth
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58.  Opens up feedback and gives people a more rounded view of performance
than they had previously.
 Identifying key development areas for the individual, a department and the
organization as a whole.
 Identifying strengths that can be used to the best advantage of the
business.
 A rounded view of the individual’s/team’s/organization’s performance and
what the strengths and weaknesses are.
 Raised the self-awareness of people managers of how they personally
impact upon others – positively and negatively.
 Supporting a climate of continuous improvement.
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59. DISADVANTAGES
But there may be problems. These include:
 people not giving frank or honest feedback;
 people being put under stress in receiving or giving
feedback;
 lack of action following feedback;
 over-reliance on technology;
 too much bureaucracy.
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