PERFORMANCE

MANAGEMENT
Facilitator
Ms. Aneeqa Suhail

What is
Performance
management?

Common Misconceptions
Performance Management
It has negative perception
It is all about appraisal
Pay is always decreased
Management favoritism
Demotivation
Disciplinary action
Termination ..

Performance Management
Continuous Process of
Identifying performance of individuals and teams
Measuring performance of individuals and teams
Developing performance of individuals and teams

and
Aligning performance with the strategic goals of the

organization
(Herman)

Performance Management
Goal-oriented process directed toward ensuring

organizational processes are in place to maximize

productivity of employees, teams, and organization.

With PM, training, appraisal, and rewards, is integrated and

linked for the purpose of continuous organizational

effectiveness
( Mondy, R. )

Performance Management
Performance management is the system through which
Organizations set work goals,
Determine performance standards,
Assign and evaluate work,
Provide performance feed back,
Determine training and development needs
Distribute rewards.

(Briscoe and Claus, 2008)

Performance Management
Achieve vision of organization

Helping individuals to achieve their

potentials

Recognizing their role in success

Performance Management systems typically

are:
What an employee should do for the next performance period?
Specific objectives for the period, backed up by a job description
A review of the personal development objectives
A review of remuneration/bonuses
Formally review performance quarterly, half yearly or annually
Fully automated - information is accessible to all participants
Content automated Performance Management system -

Performance Diary organized by line manager

Purpose of PM
Align Individual goals with organizational goals
To develop performance of individual teams and organization
Develop continuous process between supervisor and employee
Emphasis on continuous feedback besides formal feedback
Understand and manage performance within set framework
Shared Understanding

Purpose of PM
Strategic
Administrative
Informational
Developmental
Organizational maintenance
Documentation
.

Performance Management
Performance management incorporates processes like

MBO and Performance appraisal but the approach is

significantly different. Much more than just appraising
individuals.
Performance management is managing the business

(Mohrman, 1995)
A natural process of management, not an HR directed

annual procedure.
Integrated with other HR activities and helps to achieve

horizontal integration.

Short History
of
Performance Management

Early Times
Wei Dynasty

AD 221-65

Formal system of rating of Jesuit society

16 th century

Formal monitoring system by Frederick Taylor

US armed service rating

1920s

Merit ratings in UK and US.

1950s and 1960s

MBO and assessment techniques

Results oriented Performance appraisal
Performance management

before WWI

1960s and 1970s

1970s

end of 1970s

Merit Rating
Way to appraise performance
Assessing on personality traits and qualities.
Similar to classroom judgments by teachers.
Quantifications of subjective judgments.
Promotion on merit.

Merit Rating
Scotts efforts were developed into Graphic Rating Scale.
Rating on the basis of traits essential for success at work.

Some organizations use total merit score which is a

forced distribution for performance pay purposes.

Some organizations used Factorizing (taking average
scores)

Attacks on Merit Rating

Critique by McGregor
Emphasis should shift from appraisal to analysis.
Set realistic goals and performance check need to be on

actions relative to goals.

Superiors to acts as coaches to help reach company
targets.
Needs to be behavior focused not personality traits
focused.

Management by Objectives
MBO was coined by Peter Drucker in 1955.
Effective management must direct the vision and efforts of

all managers towards a common goal.

Integrated Individual and corporate objectives
Self control to achieve the set goals.
Integration and self control lead to effective management

of people

Management by Objectives
MBO description by John Humble;
Critical review of company strategy and plans.
Clarifying with each manager, expected performance
standards and their contribution.
Agreement with each manager on job improvement plan
and their realistic contribution to the organization
Providing conditions for achieving results
Using systematic performance reviews
Developing management training plans
Motivation of managers

Management by Objectives

Criticism on MBO
By Levinson (1970);
Organizations are social systems so it is not just about
objective standards.
By Fowler (1990);
Not a right choice for world of entrepreneurs.
Viewed as imposition by Line mangers
Once an year exercise
Over emphasis on quantifiable objectives.
Not future oriented

Performance Appraisal
Also called Result oriented appraisal as focus is on

agreement of objectives and assessment of the results

obtained against those objectives.
Traits & competency rating also included
An overall view of work contents, loads and volume to

look back what is achieved and plan for the future.

An annual event expressing the top down opinion by the

manager about performance.

Analyzing employee strengths and weaknesses.

Critique on Performance Appraisal

By Levinson (1976);
Ratings by different managers are not comparable
Delays in feedback for good performance frustrate

employees
Managers feeling of inadequacy make cause appraisals not

really effective.
Moreover performance appraisal is perceived as property of
HR department and line managers are non cooperative .
Appraisal are treated isolated and irrelevant.

Entering the phase of Performance Management

Features of Performance management by Malcom Warren (1972);

Expectation from the employers

Skills
Feedback
Resources
Reinforcement

Making performance management distinguished

It communicates strategic vision of the organization to all

employees.
It sets departmental than individual performance goals

that are related to organizational goals.

It conducts formal review of targets and goals.
It uses review and assessment to determine training,

development and rewards.

it motivates employees to achieve their potential.

Making performance management distinguished

Emphasis on both development and evaluation
Using profile defining employee strengths and weaknesses
Integration of results with means used to achieve those

results
Separation of development review from salary review.
Its an umbrella term including planning, review and appraisal

of performance.
Totality of day to day activities of all managers and not just a

technique.

Comparison of different approaches

Ideal PM

Congruent with organizational strategy

Thorough
Practical
Meaningful
Specific
Identifies effective and ineffective performance

Ideal PM

Valid & reliable

Open and Transparent ( no secrecy)

Inclusive and Correctable
Ethical
Integration with other Human Resources and

Development

Possible Outcomes from Effective Performance

Management
Clarifying job responsibilities and expectations.
Enhancing individual and group productivity.
Developing employee capabilities to their fullest extent through

effective feedback and coaching.

Driving behavior to align with the organizations core values,

goals and strategy.

Providing a basis for making operational human capital

decisions (e.g., pay).

Improving communication between employees and managers.

Strengths of PM
A well implemented performance management process is
beneficial to the company, its managers and employees. The
advantages being:

Integration
Open Communication
Improved Performance
Training and Development
Clarity of Standards/Requirements
Placement of Individuals
Increased Objectivity
Remuneration
Promotion
Career planning

Weakness of PM
Lowered self-esteem
Employee burnout and job dissatisfaction
Damaged relationships
Use of false or misleading information
Increased turnover
Decreased motivation to perform
Varying and unfair standards and ratings
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation

Whos Involved? What Are Their Needs?

Organization
Information
Documentation

Employee
Feedback
Support for career growth
Increased compensation

Supervisor
Documentation
Motivation

Human Resource
Make Smart Goals
Employee advocate
Honest and Unbiased
feedback

Factors affecting Performance Management

Organizational culture
Employee Relations
Structure
Size
Technology and Working Practices
External & internal environment

Concerns Of PM
Concern with output, process and Inputs
Concern with planning
Concern with Measurement and Reviews
Concern with continuous improvement
Concern with Continuous Development
Concern with Continuous communication
Concern for all stakeholders of organization
Concern for Fairness and transparency

Employee Concerns..
What is expected of me?
How will I be clear about what is expected of me in terms
of behavior and results?
How am I doing?
How can I utilize ongoing coaching, feedback and
motivation to know how I am doing and how I can improve?
What does it means for me?
How will my individual contribution, potential and aspiration
be recognized and rewarded?