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Performance Management

By: Krestel S. Palanog, RN, MAN

Learning Objectives
1. To describe the performance management process and
show how organizations can manage both organizational
and employee performance
2. To explain the importance of performance
management in creating organizational effectiveness.
3. To demonstrate that performance management is a
strategic and integrated management process.
4. To describe the different techniques for measuring
5. To explain the importance of rewarding performance
6. To provide an example of performance management
in action through Miriam Colleges Performance
Management System.
1. Continuous Process of Identifying, Measuring, and
Developing. The performance of individuals and teams
2. Aligning performance with Strategic Goals of the
Performance management
- Is a critical human resources management tool.
- Performance should be managed, measured and
- Improves organizational effectiveness.
- Is a system that impacts and affects everyone in the
organization. It helps the organization achieve
business results and maintain its desired culture. It
enables employees to understand how they are
contributing to the organizations strategic priorities
and goals, what is expected of them, and how they
are doing as it focus on the employees growth and
I. Theoretical Bases
A. Performance Management: A strategic and
Integrated Management Process
Three perspectives are as follows:
1. Performance Management at the Organizational
2. Employee Performance Managements
3. Integrated Performance Management System
1. Performance Management at the Organizational

The focus is on the determination of the

organizations strategy, and the implementation of
the strategy through the organizations structure,
technology, business systems and procedures.
Employees are not the primary focus, although they
will be affected by changes in technology, structure
and operating systems (Williams, 1998)

Organizational perspective by Bredrup (1995) includes

the following activities
1. Performance Planning
- Formulation of vision and mission
- Meeting between employee and manager.
- Set SMART goals and measurement
2. Performance Improvement
- Business process re-engineering
3. Performance Review
- Embraces measurement and evaluation
2. Employee Performance Management
-The focus is on engaging employees on planning their
goals, managing their performance, reviewing their
progress and developing themselves. It emphasizes the
contributions of employees who meet their targets and
demonstrate exemplary behavior are rewarded.
Schneier, Beatty & Baird (1986) identified the following
elements in this perspective:
o Planning involves establishing performance
targets, identifying job behaviors, and identifying
performance measures.
o Managing involves monitoring behavior and
objectives, reinforcing desired behaviors and
objectives attainment, and redirecting inappropriate
o Appraising involves formal meeting of employees
and manager, performance plan documents, focus on
future and employees development and re-planning,
and new objective establishment.
3. Integrated Performance Management
It is strategic and integrative.
It is strategic because performance management
pushes the realization of the strategic goals of the
It is integrative because it aligns and links the
organizations strategic direction with individual

Integrate the organizational and employee

performance to support the overall goals by linking
the work of each individual for the overall mission
of the unit.
It is about directing and supporting employees to
work as effectively and efficiently as possible in line
with the needs of the organization.


A. Mixed Model or Total Performance

Management Approaches
B. The Balanced Scorecard
C. European Foundation for Quality Management
(EFQM) Excellence Model
D. Performance Prism
E. Investors in People (IIP)
Mixed Model or Total Performance Management
A performance management system that combines
planning, management, and appraisal of both
performance results and competency behaviors is called
a mixed model of performance management or total
performance management approach.
Components of Performance Management
1. Performance Planning - Planning & Goals
Clarify expectations
Establish annual goals
Plan professional development
2. Performance Monitoring, Coaching and review
Ongoing Review, Coaching and Feedback
Confirm areas for focus
Provide constructive feedback
3.Evaluation and Development Discussion
Summarize critical goals and achievements
Establish overall rating
The Balanced Scorecard
-An approached to performance measurement by
combining traditional financial measures with non
financial measures to provide managers with richer and
more relevant information about organizational
performance, particularly with regard to key strategic
-Four perspectives (financial, costumer, internal
processes and learning and growth)
-It aims to enable organizations to manage strategy

-It aims to achieve a balanced set of performance

measures and targets that allow managers to track
progress in key areas
European Foundation for Quality Management
(EFQM) Excellence Model
-Is a comprehensive organizational development and
improvement framework used for assessing strengths
and areas for improvement across the spectrum of the
organizations activity.
-The model comprises of nine criteria five enablers
and four results
-Five key enablers of excellence are leadership, policy
and strategy, people, partnerships and resources, and
-Four result: people results, and ultimately, key
performance results.
Performance Prism
-It is a stakeholder centric framework for performance
measurement and management.
-It does this in two ways: one, by considering the current
and future wants and needs of the stakeholders, and two
and more uniquely, by considering what the organization
wants and needs from its stakeholders.
Investors in People (IIP)
-Is the standard for improving organizational
performance by training and developing people to
achieve business goals.
Four key principles:
- Commitment to invest in people to achieve
business goals
- Planning how skills, individuals and teams
are to be develop to achieve this goals
- Action to develop and use necessary skills
- Evaluating outcomes of training and
development for individual progress towards
goals, the value achieved, and future needs.


Measurement is a focal point of performance
It is an assessment of progress against set performance
standards thru goals and objectives, which is expected to
be unbiased and quantifiable.
A. The need for performance measurement

A performance measurement system fulfills the following

purposes (Bredrup, 1995)
- Decision support
- Monitor effect of strategic plans
- Performance evaluation
- Diagnosis
- Management of a continuous improvement
- Motivation
- Comparison
- Record development
B. Performance measurement system
-Measures of performance are defined as the tools for
evaluating whether an organizations goals and
objectives are being achieved or not.
The following performance measurement systems are
quoted from the Performance Management Research
Report of the Organizational Systems International
(OSI, 2002)
1. Management by Objectives
2. Behaviorally Anchored Rating
3. Qualitatively Measurable Performance Criteria
4. 360 degree Feedback
Management by Objectives
-Is a systematic and organized approach that allows
management to focus on achievable goals and to attain
the best possible results from available resources.
Behavioral Anchored Rating Scales (BARS)
-Descriptions provided on appraisal forms and surveys
which describe a precise level of performance. It was
develop to improve raters accuracy by providing jobrelated behavioral anchors and alternating the format of
rating scales.
Qualitatively Measurable Performance Criteria
-It thought to be objective, reducing conflict between
the employee and the appraiser by restricting the focus
of the appraisal to items that can be measured by number
or quantity (e.g., increased production rate by the end of
the fiscal year, etc.)
360 degree Feedback
-Multiple rater and 360 degree feedback consist of
performance data generated and analyzed from a number
of sources: the employees immediate supervisor(s),

peers, and direct reports, suppliers, and internal and

external costumers.
-Means recognizing employees, individually and as
members of teams, for their performance, and
acknowledging their competencies and contributions to
realizing the organization's strategies goals.
-Good performance should be recognized and should be
-Incentives and rewards like cash awards, bonuses, merit
pay and other non-monetary types of incentives to
motivate employee to perform at their best
V. The Miriam Colleges Performance Management
A careful, deliberate and thoughtful process was initiated
towards improving its appraisal system. This system
eventually became the core management process of the
Miriam College is an exclusive womens college in the
Philippines with the vision of Forming Women Leaders
in Service.
Statement of the Human Resource Philosophy
Miriam College (MC) is committed to provide the
members of its community with continuing opportunities
to achieve and excel in ones field, profession or job; to
grow professionally and personally to their fullest
potentials; and to make a meaningful contribution to the
institutions vision and mission.
This requires twelve-month cycle of planning,
monitoring and reviewing which commences in April
and ends in March of each school year
- Align individual and organization
- Provide feedback on employees work progress and
- Provide information for planning, training and career
development programs.
- Provide structural basis for decisions on personal
- Encourage open communication and a supportive

The policy governs all non-teaching staff, referring to

administrators, professionals and administrative
Employees must have completed at least six month of
work before being given a performance review.
An objective and meaningful system of assessing
performance focus on:
- Contribution 60%
- Competencies 40%
Performance Planning
1. Expected Contributions and Achievements
2. Desired Competencies
Performance Monitoring and Coaching
Multiple Raters
Performance Planning
At the beginning of calendar year, all unit heads (to refer
to supervisor, manager, and administrator) will meet
individually with their staff and agree on employees
performance plan for one year period.
The plan includes specific targets that define the
employees' contribution.

Performance Monitoring and Coaching

- Throughout the performance cycle, it is the
responsibility of the rater (or the immediate supervisor)
to gather information about the work activities of the
employee, periodically checking on progress and quality
of output among others.
Performance Review
1. Performance Rating or Assessment
- This steps involves documenting and measuring
current performance against the targets or
standard that have been agreed on during the
performance planning.
2. Performance Discussion
- The second step involves a formal meeting
between rater and ratee giving them the
opportunity to discuss overall performance
Performance management time cycle
The PMS is implemented according to the following

Expected Contributions and Achievements
- Jobs defined goals
- Special Projects
- Improvement Targets
Desired Competencies
- The school sets standards of behaviors or core
competencies that, it believes, enable a person to
perform ones job or task successfully.

PM is a critical human resource management tool.

One effective approached to PM is Total Performance
Four key areas:
- Performance Planning
- Performance Monitoring and coaching
- Performance Evaluation and development
- Rewarding performance