PERFORMANCE MEASUREMENT SYSTEM [HR Paper 2] Module 2.pdf

Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
RASHTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY
MBA
SEMESTER: 3
SPECIALIZATION
HR
SUBJECT
PERFORMANCE MEASUREMENT SYSTEM
MODULE NO : 2
PROCESS OF PERFORMANCE MANAGEMENT
- Jayanti R Pande
DGICM College, Nagpur

Q1. Discuss various phases of Performance Management 0R Explain the process of Performance Management.
The Performance Management process typically comprises several phases or steps designed to optimize employee
performance, align it with organizational goals, and foster continuous improvement.
PERFORMANCE MANAGEMENT PROCESS
Phase 1: Performance Planning
This phase involves setting the stage for effective performance. It includes:
• Establishing organizational goals and objectives.
• Creating employee performance plans based on job descriptions.
• Defining Key Result Areas (KRAs), Key Performance Areas (KPAs), setting goals, identifying tasks, and creating activity plans.
• Setting performance standards to measure success.
PERFORMANCE MANAGEMENT
PROCESS
1 PERFORMANCE
PLANNING
2 PERFORMANCE
ANALYSIS
3 PERFORMANCE
APPRAISAL
4 PERFORMANCE
DEVELOPMENT
5 PERFORMANCE
MANAGEMENT
AUDIT

Phase 2: Performance Analysis
This phase aims to analyze factors influencing performance and identify areas for improvement. It involves:
• Continuously monitoring employee performance.
• Providing feedback on assigned tasks.
• Measuring performance against set standards.
• Identifying competencies needed for better performance.
• Analyzing the causes of both poor and good performance, distinguishing between motivational and support factors.
Phase 3: Performance Appraisal
This involves a formal assessment of an employee's performance over a specific period. It includes:
• Manager-employee discussions about performance against standards.
• Maintaining performance records for productivity improvement and as a basis for compensation decisions.
• Providing an objective basis for evaluating an employee's worth within the organization.
Phase 4: Performance Development
Focused on enhancing employee skills, knowledge, and experience, this phase involves:
• Ensuring employees meet performance standards.
• Improving job-related competencies to make employees versatile within the organization.
• Encouraging a culture of individual growth and learning.
Phase 5: Performance Management Audit
This phase involves an external evaluation of the effectiveness of the Performance Management System (PMS). It includes:
• Assessing the significance and effectiveness of the PMS.
• Evaluating organizational policies and their alignment with performance management.
• Reviewing appraisal techniques, goal alignment, reward systems, and training/coaching programs.

Q2. Define Performance planning. Describe characteristics & need of performance planning.
Performance planning involves setting objectives, goals, targets, and performance standards to ensure that an employee's
performance aligns with organizational requirements.
Here are the characteristics and needs associated with performance planning:
CHARACTERISTICS OF PERFORMANCE PLANNING
• Integral to Performance Management: Foundation of effective performance management involving both employees and
managers.
• Starts with Organizational Goals: Begins by aligning individual objectives with organizational goals.
• Ends with Performance Standards: Concludes by setting clear performance standards for measurement.
• Reflects Commitment to Goals: Demonstrates dedication towards achieving organizational objectives.
• Enhances Employee Performance: Aids in improving employee competencies and efforts for meaningful results.
• Supports Employee Development: Provides a structure for ongoing employee development and growth.
• Determines Resource Needs: Identifies resources required for effective output.
• Defines Effectiveness Measurement: Establishes criteria to measure work effectiveness.
• Recognizes Exceptional Performance: Encourages recognition and rewards for outstanding achievements.
• Promotes Continuous Communication: Fosters ongoing dialogue for clarity and goal alignment.

NEEDS FOR PERFORMANCE PLANNING
• Strategy Execution: Facilitates productive execution of organizational strategies.
• Efficient Focus on Performance: Ensures efficient management and focus on employee performance.
• Goal Achievement: Aids in achieving organizational objectives by aligning individual efforts.
• Managing Complexity: Essential in navigating increased complexity in work environments.
• Enhancing Organizational Performance: Contributes to overall organizational performance improvement.
• Meeting Skilled Workforce Needs: Addresses the need for skilled and qualified workers through structured planning
and development.

Q3. Explain process of performance planning. State Importance & barriers of performance planning.
Process of Performance Planning
1 Business Planning:
• Analyzing internal and external environments, including products, people, processes, markets, technology, etc.
• Assessing factors like risks, available resources, and work systems.
2 Key Success Factors:
• Identifying critical success areas such as total output, productivity, quality, branding, etc., to focus organizational resources
effectively.
3 Departmental Objectives & Strategies:
• Establishing departmental goals derived from broad strategies, then simplifying them into individual job objectives.
4 Individual Objectives & Action Plan:
• Defining critical elements that describe an employee's required performance, duties, and responsibilities.
5 Individual Performance Expectations:
• Setting performance standards for each employee, ensuring clarity about expected performance levels.
1. BUSINESS PLANNING
2. KEY SUCCESS FACTOR
3. DEPARTMENTAL OBJECTIVES & STRATEGIES
4. INDIVIDUAL OBJECTIVES & ACTION PLAN
5. INDIVIDUAL PERFORMANCE EXPECTATIONS

IMPORTANCE OF PERFORMANCE PLANNING
1. Integration of Factors: Combines internal and external factors with individual efforts for optimal performance.
2. Enhanced Objectivity & Accountability: Increases objectivity and accountability within the performance management
process.
3. Clarity in Roles & Responsibilities: Assists employees in understanding their roles, responsibilities, and performance
expectations.
4. Organizational Excellence: Contributes to organizational excellence by aligning managerial insights, employee efforts, and
resource utilization.
5. Focus on Improvement Areas: Helps concentrate efforts, time, and resources on areas needing attention for improvement.
BARRIERS OF PERFORMANCE PLANNING
Organizational Barrier:
• Many traditional organizations undervalue performance planning, perceiving it as yielding no tangible results or wasting
resources.
• Some organizations believe their execution strategy is far superior, especially in marketing and sales strategies.
Individual Barriers:
• Lack of willingness from both employees and managers to align with organizational goals.
• Avoidance of responsibilities, minimal efforts, influenced by inappropriate workplace culture, politics, or interpersonal
conflicts.

Q4. How to plan individual performance?
PLANNING
INDIVIDUAL
PERFORMANCE
2
PERFORMANCE
TARGETS
3
KRAs
4
GOAL
SETTING
EXERCISE
5
ACTION
PLANS
6
TASK OR
ACTIVITY ANALYSIS
1
KPAs

1 Key Performance Areas (KPAs):
•Crucial areas for project success and refined organizational performance.
•Vital in candidate nominations, varying for different roles.
•Encompasses major duties and responsibilities, ensuring fairness in ratings and providing role clarity and guidance.
2 Performance Targets:
•Qualitative or quantitative objectives associated with KPAs.
•Specifies work performance required within a given timeframe, including feedback and discussions on achievements.
3 Key Result Areas (KRAs):
•Focuses on accomplishing targets within fundamental areas rather than specific job tasks.
•Includes basic duties, responsibilities, and fundamental areas relevant to an individual's role. Limited to a maximum of 6 areas
for clarity and focus.
4 Goal Setting Exercises:
•Guides individuals in realizing long-term goals and supports their growth.
•Facilitates success by setting clear goals for both individuals and teams.
5 Action Plans:
•Outlines necessary actions, including methods, resources, timelines, and budget allocation for achieving goals.
•Includes details on training, resources, and specific skills required for success.
6 Task/Activity Analysis:
•Scrutinizes activities, sets performance standards, identifies necessary competencies, and addresses inconsistencies.
•Involves understanding the organization's framework, dividing jobs into activities, grouping them to support organizational
goals, and recognizing required skills for tasks.

Q5. Explain mechanism of Performance Management Execution along with its importance.
Performance Execution is the vital process of implementing the performance management plan. It's the chain of actions where
individual performances collectively contribute to the divisional or organizational performance.
RESPONSIBILITIES OF MANAGERS IN PERFORMANCE EXECUTION PLAN
1.Updating Objectives as Conditions Change: Managers must regularly monitor and update goals based on changing conditions
and organizational needs.
2.Maintaining Performance Records: It's crucial for managers to observe and maintain records of office personnel to assess their
performance levels.
3.Providing Development Exercises & Opportunities: Managers play a key role in introducing conditions that encourage employee
learning, development, and progress.
4.Conducting a Mid-Term Review: To ensure that employees remain focused and aligned with organizational goals, mid-term
reviews are conducted.
5.Providing Feedback & Coaching for Success: Managers are responsible for offering feedback and coaching sessions to help
employees understand the expectations and improve their performance.
IMPORTANCE OF PERFORMANCE EXECUTION
•Individual-Organizational Alignment: It ensures that individual efforts contribute effectively to overall organizational
performance.
•Continuous Improvement: Facilitates a culture of continuous improvement by monitoring, updating, and coaching employees.
•Goal Relevance: Regular reviews and feedback sessions ensure that goals remain relevant and aligned with the organization's
needs.
•Employee Development: Offers opportunities for employee growth and development through feedback and coaching.

Q6. Explain in detail about designing a performance management process
Ans
DESIGNING PERFORMANCE MANAGEMENT PROCESS
 Process of designing performance management ensures that the system created is appropriate for intended purpose
 It ensures system will be acceptable to all those who are expected to work & achieve benefits from it .
 Designing of performance management process enhances the chances of goal achievement by employees.
PREREQUISITES
• Designing & executing a PMS [ performance management system ] is a repetitive process.
• Participative approach should be used while designing, this helps in gaining acceptance of all & identifying interests of all.
• All people having interests should be precisely identified.
• Analytical framework should be used to evaluate the present situation.
• A broad objective should be laid down but not too many objectives.
• For monitoring, a Checklist should be maintained

CHECKLIST FOR DESIGNING PERFORMANCE MANAGEMENT PROCESS
1. GENERAL – What are aims for conducting performance management?
2. PERFORMANCE AGREEMENT – Whether performance management is based on some contract, plan or agreement?
3. OBJECTIVES – How does org define objectives?
4. PERFORMANCE MEASURES OR INDICATORS – Does org consider input output as factors affecting performance in
performance evaluation?
5. ATTRIBUTES & COMPETENCIES – What is the scope for developing competencies?
6. PERFORMANCE & DEVELOPMENT PLANS – How organisation integrate training & development plans
with business plans ?
7. MANAGING PERFORMNACE THROUGHOUT THE YEAR – How to ensure managers are conscious of their
duties over the year & carry them sincerely?
8. PERFORMANCE REVIEWS – What are extent of integration of self, peer & upward assessment in review
process?
9. PERFORMAANCE RATING – Does org needs performance rating?

10. DOCUMENTATION – What principles are needed in written forms for managers & employees?
11. EXISTING ARRANGEMENTS – Which [parts of existing arrangements considered during
performance appraisal process?
12. PERFORMANCE MANAGEMENT FOR TEAMS – Does org need to emphasise the imp of
integrating teams with performance management process ?
13. PERFORMANCE RELATED PAY – What preventive measures should be taken to motivate &
develop PMS by performance related pay?
14. REACTION & BEHAVIOUR OF MANAGERS & EMPLOYEES – How can org create performance
management ownership by line managers? What are ways to make employees understand & accept
performance management?
15. TRAINING & BRIEFING – Is it required to train both the managers & the subordinates?

Q7. Write short notes on following :
1.Performance Planning: Performance planning involves setting objectives, goals, and expectations for employees in
alignment with organizational objectives. It includes defining roles, responsibilities, and outlining the desired outcomes or
results expected from employees within a specific timeframe. This phase focuses on establishing clear expectations, discussing
job responsibilities, and setting measurable goals to guide employees towards achieving their targets.
2.Key Performance Area (KPA): KPAs are specific areas or domains critical to an individual's role or job function within an
organization. They represent the primary areas where an employee's efforts, skills, and contributions are evaluated. KPAs help
in defining and prioritizing the key aspects of an employee's job performance that directly contribute to organizational
success.
3.Performance Target: Performance targets are quantifiable and measurable objectives or benchmarks that individuals or
teams are expected to achieve within a specified period. They are usually set during the performance planning phase and
serve as yardsticks to evaluate an employee's performance. Performance targets should be specific, achievable, relevant, time-
bound (SMART), and aligned with the overall organizational goals.
4.Task Analysis: Task analysis involves a systematic examination of the steps, processes, or activities involved in performing a
specific job or task. It aims to understand the components of a job, including its requirements, resources, skills, and
challenges. Task analysis helps in identifying the essential elements of a job, which aids in setting performance standards,
training programs, and evaluating employee performance based on the tasks performed.

IMPORTANT DEFINITIONS IN THIS MODULE
1 Performance Planning:
Performance planning involves setting goals and defining expectations for employees to achieve desired outcomes.
2 Performance Analysis:
Performance analysis is the process of assessing and evaluating individual or organizational performance to identify
strengths, weaknesses, and areas for improvement.
3 Performance Appraisal:
Performance appraisal is a structured assessment of an individual's job performance, typically conducted annually, to
provide feedback and make decisions regarding rewards, promotions, or development opportunities.
4 Performance Management Audit:
Performance management audit is a systematic review or assessment of the effectiveness and efficiency of an
organization's performance management processes, procedures, and systems.

Copyright © 2023 Jayanti Rajdevendra Pande.
All rights reserved.
This content may be printed for personal use only. It may not be copied, distributed, or used for any other
purpose without the express written permission of the copyright owner.
This content is protected by copyright law. Any unauthorized use of the content may violate copyright laws and
other applicable laws.
For any further queries contact on email: jayantipande17@gmail.com

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