PERFORMANCE MANAGEMENT

1. PERFORMANCE
MANAGEMENT

2. UNIT- 1
• Overview of HRM Capital and performance
appraisal
• Evolution of concept of performance
management
• Concept and perspectives of performance
management
• Meaning, Nature and scope of Performance
Management.

3. • The term performance management gained its
popularity in early 1980’s when total quality
management programs received utmost
importance for achievement of superior
standards and quality performance

4. Definition
• Performance management involves thinking
through various facets of performance,
identifying critical dimensions of performance,
planning, reviewing, and developing &
enhancing performance & related competencies.
• (Dr. T.V. Rao)

5. Evolution of Performance Management
• First Phase: The origin of performance
management can be traced in the early 1960’s
when the performance appraisal systems were in
practice. . During this period, Annual
Confidential Reports (ACR’s) was also known
as Employee service Records were maintained
for controlling the behaviors of the employees
and these reports provided substantial
information on the performance of the employees

6. • Second Phase: This phase continued from late
1960’s till early 1970’s, and the key hallmark of
this phase was that whatever adverse remarks
were incorporated in the performance reports
were communicated to the employees so that
they could take corrective actions for overcoming
such deficiencies

7. • Third Phase: In this phase the term ACR was
replaced by performance appraisal. One of the
key changes that were introduced in this stage
was that the employees were permitted to
describe their accomplishments in the
confidential performance reports, several new
components were considered by many
organizations which could measure the
productivity and performance of an employee in
quantifiable terms such as targets achieved, etc.

8. •
• Fourth Phase: This phase started in mid 1970’s
and its origin was in India as great business
tycoons like Larsen & Toubro, followed by State
Bank of India.

9. •
• Fifth Phase: This phase was characterized by
maturity in approach of handling people’s issues.
It was more performance driven and emphasis on
development, planning and improvement.
Utmost importance was given to culture building,
team appraisals and quality circles were
established for assessing the improvement in the
overall employee productivity

10. Conceptual evolution of PM
From To
System Process
Appraisal Joint Review
Output Output/Input
Reward oriented Development Oriented
Rating common Less rating
Top down 360 degree feedback
Directive Supportive
Monolithic Flexible
Owned by HR Owned by users
Cadre based Service based

11. OBJECTIVES OF PERFORMANCE
MANAGEMENT
• To enable the employees towards achievement of
superior standards of work performance.
• To help the employees in identifying the
knowledge and skills required for performing the
job efficiently as this would drive their focus
towards performing the right task in the right
way.
• Boosting the performance of the employees by
encouraging employee empowerment,
motivation and implementation of an effective
reward mechanism.

12. • Promoting a two way system of communication
between the supervisors and the employees for
providing a regular and a transparent feedback for
improving employee performance and continuous
coaching
• Identifying the barriers to effective performance and
resolving those barriers through constant monitoring,
coaching and development interventions.
• Creating a basis for several administrative decisions
strategic planning, succession planning, promotions
and performance based payment
•

13. Pre-requisites of performance
management
• Organizational philosophies
• Attitudes & skills of those responsible for its
implementation
• Acceptance, commitment & ownership of managers &
employees
• Endorsement of the notions of “procedural fairness”
& “Distributive Justice”
• Top management commitment & involvement
• Adequacy of pay level or compensation package
• Availability or access to resources, tools, & skills to
employees to do their job

14. • Scope for managers to have the power to make
decisions & plan on the basis of needs
• Familiarity of managers & employees with
planning tools such as targets setting &
achievement monitoring
• A culture of accountability & openness prevails
• Financial requirements of the organizations
• Decentralization
• Customer’s pressure & quality assurance

15. Characteristics of Performance
Management
• The organization has a shared vision & ethical
values that is being communicated to all
employees for seeking employee commitment.
• Employee performance target is a result of inter-
linkage between work unit objectives with
organizational goals & strategy
• Establishing performance criteria against which
individual & work unit achievements can be
measured.
• Tracking of employee’s progress towards
performance criteria is regular with feedback
provided to the employees

16. • Reviewing of progress employees results in
identification of areas of competency
improvement
• Measuring performance of employees is linked to
rewards outcome
• Continuous enhancing of performance
• The evaluation of the effectiveness of
performance management process s that change
& improvement can be made.

17. Purpose of PM system
• It serves the strategic purpose of the org.
• Provide information for reward system
• Facilitates HR decisions
• Enabling employees to learn about their performance
as against org expectations
• It serves as a developmental purpose
• Serves org maintenance purpose
• Support HR decision to meet legal requirements
•

18. Is performance Mgt & performance
appraisal same?
• Both are different concepts.
• PM is a broader term & includes appraisal as a
part of the performance system.
• Performance appraisal is the systematic
description of an employee’s strengths and
weakness.
• Thus, performance appraisal is an important
component of performance management

19. Contributions of Performance
management to an organization
• Motivation to perform is increased
• Increases self esteem
• Managers gain insight about subordinates
• Jobs are simplified
• Organizational goals are clear
• Employees become more competent
• Differentiation between good & poor performance
• Performances are communicated
• Change can be possible

20. Characteristics of an ideal PM system
• Strategic congruence
• Thoroughness
• Practicality
• Meaningfulness
• Specificity
• Reliability
• Validity
• Acceptability
• Inclusiveness
• Openness
• Correct ability
• Standardization
• Ethicality
• Identification of effective & ineffective performance

21. Principles of performance
management
• It translates organizational objectives into work
units, departmental, team, as individual goals.
• It provides clarity of goals & objectives of the
organization to all the employees & managers.
• It is a continuous & integrated process for
developing organizational team & individual
performance.
• It seeks to build commitment towards
organizational, team & individual performance
expectations.
• It empowers individual employees to find
avenues for improving performance.

22. • It requires an organizational culture that fosters
corporate values of openness, mutuality, trust fairness &
respect paving the way for two-way communication.
• It creates a system of regular feedback with positive
reinforcement of employees behavior & action
• It provides for evaluation of employees of employees
performance against jointly agreed performance criteria
in a congenial work environment.
• It provides for an effective & contextual management of
external environment for overcoming obstacles &
impediments in the way of effective managerial
performance.
• It is more of a developmental tool rather than
administration of financial rewards.

23. Imperatives of Performance Management
• New developments
• Cost containment
• Performance improvement
• Innovation
• Continuous assessment

24. Antecedents, of Performance
Management
•
• Careful consideration of determinants of job
performance
• Assessing the impact of individual personality on
job performance

25. Determinants of Job Performance
• Knowledge & Skills
• Motivation
• Feedback
• Leadership
• Personality

26. Elements of Performance Management of
Performance Management
• Process
• People management capability
• Motivation
• Measurement & rewards
• Role of HR professionals
• Learning organization
• Culture & clarity of purpose

27. • 0-18 month----trustfullness
• 18-3
• 3-5 initiativeness
• 5-12
• 12-18
• 18-40
• 40-65
• 65+

28. Personality & job performance

29. Challenges in implementing
Performance Management
• Linking reward system to performance management
• Measurement organizational & employee results
• Using competencies in a performance management
system
• Using a performance management tools to improve
organizational effectiveness
• Supporting organizational culture with performance
management
• Developing & implementing performance management
• Aligning employees with organizational objectives &
strategy

30. plan
Do
Check
Act

31. Org goal
dept
employee
Direct
(monitor,
mentoring)
assessing
reward