Helpful for finance students

1. UNIT NO: 3
INTRODUCTION TO
PERFORMANCE MANAGEMENT

2. MEANING
 Performance Appraisals is the assessment of individual’s
performance in a systematic way.
 It is a developmental tool used for all round development of
the employee and the organization.
 The performance is measured against such factors as job
knowledge, quality and quantity of output, initiative,
leadership abilities, supervision, dependability, co-operation,
judgment, versatility and health.
 Assessment should be confined to past as well as potential
performance also.

3. Definition 1:
“It is a systematic evaluation of an individual with respect to
performance on the job and individual’s potential for
development.”
Definition 2:
“It is formal, structured system of measuring, evaluating job
related behaviors and outcomes to discover reasons of
performance and how to perform effectively in future so
that employee, organization and society all benefits.”

4. Benefits of Performance Management
1. Highlights training needs
2. Boosts morale
3.Helps with identifying the right employees for promotion
4. Helps define career paths
5. Supports workforce planning
6. Increases employee retention
8. Improves accountability

5. COMPETENCY MAPPING AND
PERFORMANCE DEVELOPMENT
1. It provides a systematic approach to planning of training of people
2. It helps to customizes training delivery to the individual or organization as
a whole
3. It helps to evaluates suitability of training programs to promote job
competence
4. It provides the employees with a detailed job description
5. It helps in selection to right personnel for the organisation
6. It helps in performance appraisals of the employees
7. It helps to develop and targets training to those skills that require
development

6. 8. It helps to gives due credit to prior knowledge and experience
9. It helps focus on performance improvement
10. It promotes a culture of continuous employee performance and
their development
11. It helps to identify employee readiness for promotion
12. It guides career development of employees
13. It helps to develop modular training curriculum that can be
clustered as needed
14. It helps to develop learning program

7. LINKAGE OF PERFORMANCE MANAGEMENT TO OTHER HR
PROCESSES
1. Recruitment management forecast performance
2. Training management improves performance
3. Performance management evaluation performance
4. Compensation management provides reward and returns to
employees for the efforts put

8. AIMS
Typically performance management would cover the following
set of activities.
1. Planning work and setting expectations from employee
2. Continuous monitoring of performance
3. Development of the capacity of high performance in people
4. Periodic rating of the performance in a summary fashion
5. Rewarding good performance
6. Correcting poor performance

9. AIMS
 Setting of goals to fulfill organizational objectives
 Developing a culture of performance
 Encouraging Employee Empowerment
 Promoting Improved Communication Between Teams
 Identifying Areas for Development
 Setting Appropriate Expectations forBoth Managers and
Employees
 Establishing Positive Incentives forGood Work

10. Principles of Performance Management
 Transparency
 Employee development and empowerment
 Values
 Congenial work environment
 External environment