Performance Management

What Is Performance?

Performance means both behaviours and results

When managing performance both inputs (behaviour) and outputs (results) need to be considered

This is called the ‘Mixed Model’

What is Performance Management?

Performance management is: ‘The development of individuals with competence and commitment, working towards the achievement of shared meaningful objectives within an organization which supports and encourages their achievement’.

Performance management is: the process of ‘Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organization’ (Walters, 3).

‘Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors’ (Armstrong and Baron, 4).

to establish a high performance culture to focus people on doing the right things To align individual objectives to organizational

objectives to develop the capacity of people to meet and exceed

expectations Empowering, motivating and rewarding employees to

do their best

Characteristics of Performance Management

continuous and flexible process the primary elements are agreement,

measurement, feedback, positive reinforcement and dialogue.

based on the principle of management by contract and agreement rather than management by command

focuses on future performance planning

Concern with outputs, outcomes, process and inputs.

Concern with planning.

Concern with measurement and review.

Concern with continuous improvement.

Concern with continuous development.

Concern for communication.

Concern for stakeholders.

Concern for fairness and transparency.

Few Concepts

The meaning of alignment

Managing expectations

Discretionary behaviour

Performance Agreement

Performance Planning

Development Planning

Input

Output measures

Outcome Measures

Process Of Performance Management

The Management Cycle

PM Cycle

Performance Management Sequence

Performance Management in Action At

Halifax Bank of Scotland Retail (HBOS)

Essence Of performance Management

Aim

Principles

Key phrase - ‘Unleashing the performance of our people’

Performance Matrix

Performance Management in Action At

Standard Chartered Bank

PERFORMANCE MANAGEMENT AND NON-FINANCIALREWARDS

Performance management and recognition

Performance management and the provision of opportunities to achieve

Performance management and skills development

Performance management and career planning

Performance management and job engagement

Performance management and commitment

Performance Mgt Roles

Top Managers Line Managers Employees HR specialists

Top Managers

Communicate a clear sense of mission Clear line of sight Expectations are defined Everyone is kept informed of progress

Line Managers

Bring policies to life.

Employees

Top to bottom Pay and future is affected

HR role

Helping employees to develop skills Creates mentors and coaches. Conduct surveys Training events

PM Development programme Stage 1: Decide on the business case for introducing performance Management Stage 2: Determine objectives and guiding principles for performance

management Stage 3: Get the commitment and active participation of top management and

line managers Stage 4: Draw up guiding principles on how performance management should

work Stage 5: Define performance management processes and documentation Stage 6: Pilot-test Stage 7: Communicate Stage 8: Plan arrangements for training in performance Management Stage 9: Implement Stage 10: Evaluate

Evaluating performancemanagement

Evaluating performancemanagement

Performance agreement Objectives Feedback Review Motivation Development Ratings Performance Related pay Documentation Training

Performance Appraisal

Performance appraisal is a method of acquiring and processing the information needed to improve an individual employee’s performance and accomplishments.

Objectives Of Performance appraisal

 To judge the gap between the actual and the desired performance  Helps to strengthen the relationship and communication   To diagnose the strengths and weaknesses of the individuals   To provide feedback to the employees regarding their past

performance.

To determine who needs what training, and who will be promoted, demoted, retained, or fired.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

Purpose

Administrative purposesAdministrative purposes Working conditionsWorking conditions Promotions Promotions Termination RewardsRewards

Developmental purposesDevelopmental purposes Improving PerformanceImproving Performance Strengthening job skills Strengthening job skills Providing feedbackProviding feedback Counseling Counseling TrainingTraining

Setting Performanc

e standards

Taking correctivestandards

Comparing standards

Communicationstandards

Measuring standardsDiscussing

result

Challenges Of Performance Appraisal

Determining the evaluation criteria

Create a rating instrument

Lack of competence

Errors in rating & evaluation

Resistance

Methods of Performance Appraisal

Past Oriented Methods Checklist Forced Distribution Rating Scales Field review Paired-comparison Method Straight Ranking Method

Modern Methods of Performance Appraisal

Assessment Centre Behaviorally Anchored Rating Human Resource Accounting Method 360 – Degree- Performance- Appraisal

Method Management by Objectives (MBO)Method

Assessment Centre

Behaviorally Anchored Rating

Human Resource Accounting Method

360 – Degree- Performance- Appraisal Method

Management by Objectives (MBO)Method

Measuring performance at different levels

For top level management

Degree of organizational growth and expansion

Extent of achievement of organizational goals

Contribution towards the society

Profitability and return on capital employed

Measuring performance at different levels

For middle level managers Performance of the

departments or teams

Co-ordination with other departments

Optimal use of resources

Costs Vs. revenues for a given period of time

The communication with superiors and subordinates

Measuring performance at different levels

For front line supervisors Quantity of actual output

against the targets  Quality of output against

the targets

Number of accidents in a given period

Rate of employee absenteeism

Performance Appraisal as Employee Motivation Mechanism

Inaccurate performance Review Increase in salary Deceased Motivation

Performance Review No increase in salary Deceased Motivation

Accurate Performance Review Increase in salary Motivation

Difference Between Performance Management & Performance Appraisal

Performance management

Performance appraisal

Joint Process through dialogue

Continuous review with on or more formal interview

Ratings less common

Flexible Process

Top Down Assessment

Annual appraisal meeting

Use Of ratings

Monolithic process

Performance management

Performance appraisal

Focus On values & Behaviours as well as processes

Less likely to be a direct link to pay

Documentation Kept to a minimum

Owned by Line Managers

Focus On quantified Objectives

Often linked to pay

Bureaucratic-Complex paper work

Owned by HR department

Thank You