The performance management process

The Performance
Management
Process
Chapter # 02

Course: Performance Management Chapter# 02: The PerformanceManagementProcess
Page 2 of 6
THE PERFORMANCE MANAGEMENT PROCESS
A textbook performance management system (PMS), as conceived by Bevan and Thompson (1991),
exhibitsthe followingfeatures:
 It has a shared vision of its objectives, or a mission statement, which it communicates to all its
employees;
 It sets individual performance management targets, which are related both to operating-unit and
widerorganizationalobjectives;
 It conductsregular,formal reviewsof progresstowardsthese targets;
 It usesthe reviewprocesstoidentifytraining,developmentand rewardoutcomes;
 It evaluates the effectiveness of the whole process and its contribution to overall performance to
allowchangesandimprovementstobe made.
But Bevan and Thompson suggested that this textbook definition placed too much emphasis on a top-
down approach (particularly in objective setting), which can underplay the extent to which training,
development and reward systems are driven from the bottom up: This in turn, raises questions about
how easily corporate objectives can be integrated with individual goals, and the extent to which reward
systems which are introduced to support a PMS can frustrate the training and development objectives of
the process. They also criticized the belief that a PMS model can fit all situations and suggested that many
processissuesinvolvedinmakingperformancemanagementworkwere underemphasized.
A BASIC, PRACTICAL MODEL
Research conducted by Fletcher and Williams (1992) indicated that the majority of organizations that
they looked at were a long way from operating a sophisticated PMS. For most of them, PMS was
synonymouswithperformance appraisal,orwith performance-relatedpay(PRP) orboth.
But, as Fletcher commented: There is, of course, much more to it than that. The real concept of
performance management is associated with an approach to creating a shared vision of the purpose and
aims of the organization, helping each individual employee understand and recognize their part in
contributing to them, and in so doing manage and enhance the performance of both individuals and the
organization.
Fletcher and Williams’s research suggested four underlying principles of effective performance
management,namelythat:
i. it isownedanddrivenbyline managementandnotby the HR department;
ii. There isan emphasisonsharedcorporate goalsand values;
iii. Performance management is not a packaged solution but something that has to be developed
specificallyandindividuallyforeachparticularorganization;
iv. It shouldapplytoall staff,notjust part of the managerial group.
To this can be added a fifth principle, namely that some businesses have found it beneficial to apply
different processes to different parts of their organization. This can work, provided that the processes
operate within the same overall framework and are linked by explicit and shared corporate goals and
values.

Page 3 of 6
PERFORMANCEMANAGEMENT AS A PROCESS
Probably the main criticism that has rightly been made about the application of performance
management is that it has been introduced as a top-down, imposed and rigid system that seeks easy
solutions to complex problems, which it will inevitably fail to deliver. It is much better to regard
performance management as a flexible process, not as a system. The use of the term system implies a
rigid, standardized and possibly bureaucratic approach that is inconsistent with the concept of
performance management as a flexible and evolutionary process applied by managers working with their
staff in accordance with the circumstances in which they are working. As such, it involves managers and
those whom they manage operating as partners, but within a framework that sets out how they can best
work together. This framework has to reduce the degree to which performance management is a top-
down affair, and it has to be congruent with the way in which any particular organization functions.
Performance management has to fit process-based and flexible organizations. In these circumstances
which are increasingly the norm it has to replace the type of appraisal system that only fits a hierarchical
and bureaucraticorganization.
Overall, performance management needs to encourage a balanced approach with the following features,
as describedbyVickyWrightandLiz Brading(1992):
 Less focus on retrospective performance assessment and more concentration on future performance
planningandimprovement;
 Identification and recognition of the skills and capabilities associated with higher levels of
performance;
 Identification and recognition of outputs that are defined in qualitative and not just quantitative
terms;
 A freer,upwardlymanagedprocess;
 A more coachingand counsellingstyle of appraisal,withlessemphasisoncriticism;
 More focus on an individual s contribution to the success of the team as a whole, with some
objectivesdefinedintheseterms;
 Concernfor improvinganindividualsperformance asmuchas assessingit;
 No forceddistributionof performanceratings(andsonowinlose scenarios);
 Possiblynoformal ratingsgiven.
Although every organization wanting to introduce performance management should develop its own
version to suit its needs, it is useful to have a conceptual framework within which appropriate processes
can be developed and operated. This framework will help in deciding the approach to be adapted and,
when the decision has been made, it will provide guidance to managers, as well as the individuals and the
teamstheymanage,onwhat performance managementactivitiestheywill be expectedtocarryout.
Performance management can be described as a continuous self-renewing cycle, as illustrated in Figure
2.1.The mainactivitiesare:
i. Role definitioninwhichthe key resultareasandcapabilityrequirementsare agreed.
ii. The performance agreement (or contract) which defines expectations: what an individual has to
achieve in the form of objectives, how performance will be measured and the capabilities needed to
deliverthe requiredresults.Thiscouldbe describedasthe performance planningstage.

Page 4 of 6
iii. The personal development plan which sets out the actions people intend to take to develop
themselves in order to extend their knowledge and skills, increase their levels of capability, and
improve theirperformanceinspecifiedareas.Thisisthe performance developmentstage.
iv. Managing performance throughout the year which is the stage in which action is taken to
implement the performance agreement and personal development plan as individuals carry on
with their day-to-day work and their planned learning activities. It includes a continuous process
of providing feedback on performance, conducting informal progress reviews, updating
objectivesand,wherenecessary,dealingwithperformanceproblems.
v. Performance review which is the formal evaluation stage when a review of performance over a
period takes place, covering achievements, progress and problems, as the basis for a revised
performance agreementandpersonal development plan.Itcanalsolead to performance ratings.
ROLEDEFINITION
The role definitionprovidesthe frameworkforperformance management.Itsetsoutthree things.
The first is the purpose of the role, which summarizes the overall aim namely what the role holder is
expectedtodoand providesafoundationforthe performance agreement.
The second is the key result areas or principal accountabilities, which define the main output areas of the
role and provide the headingsagainstwhichobjectivesandperformance standardsare agreed.
The third aspect is key capabilities, which indicate what the role holder has to be able to do and the
behaviour required to perform the role effectively. These provide the basis for drawing up personal
development plans and for assessing the input aspect of performance what the individual brings to the
role. This in turn constitutes the capability profile for the role, which may refer to organizational core

Page 5 of 6
capabilities as well as generic capability, or capability profiles developed for similar roles. It may also
incorporate capabilitiesthatare specifictothe role.
PerformanceAgreements
Performance agreements, also known as performance contracts, define expectations the results to be
achievedandthe capabilitiesrequiredto attainthese results.Agreementscoverthe followingpoints:
 Objectives and standards of performance the results to be achieved, defined in terms of targets and
standards;
 Capabilityprofile the capabilitiesrequiredtocarryout the role effectively;
 Performance measures and indicators to assess the extent to which objectives and standards of
performance have been achieved;
 Capability assessment how levels of capability will be assessed, including discussions to clarify
expectations by reference to the capability profile in the role definition and agreements on the sort
of evidencethatwill be useful inassessingcapability.
 Core values or operational requirements the performance agreement may also refer to the core
values of the organization for quality, customer service, team working, employee development, etc.
that individualsare expectedtoupholdincarryingouttheirwork.
Certain general operational requirements may also be specified in such areas as health and safety,
budgetarycontrol,cost reduction andsecurity.
Managing Performance
Perhaps one of the most important concepts of performance management is that it is a continuous
process that reflects normal good management practices of setting direction, monitoring and measuring
performance, and taking action accordingly. Performance management should not be imposed on
managers as something special they have to do; it should be treated as a natural process that all good
managersfollow.
The sequence of performance management activities as described in this chapter does no more than
provide a framework within which managers, individuals and teams work together in whatever ways best
suit them in order to gain better understanding of what is to be done, how it is to be done and what has
been achieved. This framework and the philosophy that supports it can form the basis for training newly
appointed or would-be managers in this key area of their responsibilities. It can also helpin improving the
performance of managerswhoare not up to standardin thisrespect.
PerformanceReviews
Performance review discussions enable a perspective to be obtained on past performance as a basis for
making plans for the future. An overall view is taken of progress made. Examples are used to illustrate
that overview, and the analysis of performance concentrates not only on what has happened but also on
why it has happened, so that data are obtained for planning purposes. Obtaining a historical perspective
through analysis is a necessary part of a performance review, but reaching agreement about what should
be done inthe future iswhatreallymatters.
Performance and development reviews provide those involved with the opportunity to reflect on past
performance as a basis for making development and improvement plans. The purpose of performance
and development reviews is to enable those concerned to get together so that they can engage in a
dialogue about the individual s performance and development and the support provided by the manager
and such support is an essential part of performance management. They are not occasions for top-down
appraisals, although some feedback will be provided. Neither are they interviews in which one person

Page 6 of 6
asks the questions and the other provides the answers. They should be more like free-flowing, open
meetings where views are exchanged so that agreed conclusions can be reached. A performance and
development review should be regarded as a conversation with a purpose, which is to reach firm and
agreed conclusions about the individual s development, and, if applicable, any areas for improvement
and howsuch improvementswill be achieved.
Organizational and individual contributions Performance management operates as a partnership
between the organization and each individual working in it, as shown in Figure 2.2 in which both parties
contribute to the definition of objectives, tasks, standards, and performance measures, monitoring
progressanddevelopingperformance.

The performance management process

More Related Content

What's hot

Similar to The performance management process

More from Osama Yousaf

Recently uploaded

The performance management process