Unit – I

Performance management is defined as the process of continuous communication and

feedback between a manager and employee towards the achievement of organizational
objectives.

Performance management is about aligning individual objectives to organizational

objectives and ensuring that individuals hold the corporate core values. It provides for
expectations to be defined in terms of role responsibilities and accountabilities expected to
do, skills expected to have, and behavior expected to be.

The overall aim of performance management is to establish a good culture in which

individuals and teams take responsibility for the improvement of their own skills and their
organizations. Specifically, performance management is all about achieving the individual
objectives according to the organizational objectives and ensuring that every individual is
working towards it.

Another aim is to develop the capacity of individuals to meet the expectations of the
organization. Mainly, performance management is concerned with the support and
guidance for the people who need to develop.

The aims of performance managements are:

 Empowering, motivating and rewarding employees to perform their best for the
organization.
 Focusing on employees’ tasks, the right things and make them doing right. Aligning
everyone’s individual goals towards the goals of the organization.
 Proactively managing and resourcing performance against objectives of the
organizations.
 Linking job performance to the achievement of the council’s corporate strategy and
service plans.
 All individuals being clear about what they need to achieve and expected standards,
and how that contributes to the overall success of the organization; receiving
regular, fair, accurate feedback and coaching to stretch and motivate them to
achieve their best.
 To enable the employees towards achievement of superior standards of work
performance.
 To help the employees in identifying the knowledge and skills required for
performing the job efficiently as this would drive their focus towards performing
the right task in the right way.

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  Boosting the performance of the employees by encouraging employee
empowerment, motivation and implementation of an effective reward mechanism.
 Promoting a two way system of communication between the supervisors and the
employees for clarifying expectations about the roles and accountabilities,
communicating the functional and organizational goals, providing a regular and a
transparent feedback for improving employee performance and continuous
coaching.
 Identifying the barriers to effective performance and resolving those barriers
through constant monitoring, coaching and development interventions.
 Creating a basis for several administrative decisions strategic planning, succession
planning, promotions and performance based payment.
 Promoting personal growth and advancement in the career of the employees by
helping them in acquiring the desired knowledge and skills.

Purposes of Performance Management System

Performance management's goal is to create an environment where people can perform to

the best of their abilities and produce the highest-quality work most efficiently and
effectively.

A performance management system consists of the processes used to identify, encourage,

measure, evaluate, improve, and reward employee performance at work. Employees’ job
performance is an important issue for all employers. However, satisfactory performance
does not happen automatically; therefore, it is more likely with a good performance
management system.

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1. Feedback Mechanism:

Appraisals provide feedback to employees therefore serve as vehicles for personal and
career development. Performance appraisals must convey to employees how well they
have performed on established goals. It’s also desirable to have these goals and
performance measures mutually set between the employees and the supervisor. Without
proper two-way feedback about an employee’s effort and its effect on performance, we run
the risk of decreasing his or her motivation.

2. Development Concern:

Once the development needs of employees are identified, appraisals can help establish
objectives for training programs. It refers to those areas in which an employee has a
deficiency or weakness, or an area simply could be better through effort to enhance
performance for example suppose a college professor demonstrates extensive knowledge
in his or her field and conveys this knowledge to students in an adequate way. Although
this individual’s performance may be satisfactory, his or her peers may indicate that some
improvements could be made. In this case, then, development may include exposure to
different teaching methods, such as bringing into the classroom more experimental
exercises, real world applications, internet applications, case analysis, and so forth.

3. Documentation Concern:

The job related measure must be performance supported when a Human Resource
Management (HRM) decision affects current employees. For instance, suppose a supervisor
has decided to terminate an employee, a review of this employee’s recent performance
appraisals indicates that performance was evaluated as satisfactory for the past two review
periods. Accordingly, unless this employee’s performance significantly decreased,
personnel records do not support the supervisor’s decision. This assessment by HRM is
absolutely critical to ensure that employees are fairly treated and that the organization is
“protected”. Additionally in cases like sexual harassment, there is a need for employees to
keep copies of past performance appraisals. If retaliation such as termination or poor job
assignments occurs for refusing a supervisor’s advances existing documentation can show
that the personnel action inappropriate.

Because documentation issues are prevalent in today’s organizations, HRM must ensure
that the evaluation systems used support the legal needs of the organization.

4. Diagnoses of Organizational Problems:

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As a result of proper specifications of performance levels, appraisals can help diagnose
organizational problems. They do so by identifying training needs and the knowledge,
abilities, skills, and other characteristics to consider in hiring, and they also provide a basis
for distinguishing between effective and ineffective performers. Appraisal therefore
represents the beginning of a process, rather than an end product.

5. Employment Decisions:

Appraisals provide legal and formal organizational justification for employment decisions
to promote outstanding performers; to weed out marginal or low performers; to train,
transfer, or discipline others; to justify merit increases ( or no increases); and as one basis
for reducing the size of the workforce. In short, appraisals serve as a key input for
administering a formal organizational reward and punishment system.

The crossroads between performance management and employee engagement

Performance management and employee engagement are two critical aspects of the
workplace that are also closely connected. While performance management focuses on
setting and achieving goals and targets, employee engagement is about creating a positive
and fulfilling work environment.

The best way to understand the relationship between the two is to consider that
performance management and employee engagement activities have a symbiotic
relationship — and a manager’s job is to ensure both feed into the other for the better.

What is performance management?

Performance management is a structured process that helps managers and employees set
and achieve goals and targets together.

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When done well, the benefits of performance management are vast and include better team
alignment, increased task and goal completion, and stronger relationships and trust. The
pros not only influence individual performance, but have a ripple effect on the success of
the business as a whole, ultimately helping a company improve their bottom line.

The performance management process typically involves 4 stages:

Stage 1: Goal setting

It’s important to use a goal-setting framework such as objectives and key results (OKRs) or
SMART goals, when defining goals with employees. There are many out there, so use the
one that best meets your needs.

Take it to the next level! While it’s a manager’s job to guide and oversee performance
management, always encourage employees to suggest and create their own goals that align
with company objectives as a way to encourage participation in the process and help them
feel empowered in their own performance.

Stage 2: Performance feedback

Make sure to provide feedback constructively and regularly, focusing on specific behaviors
and outcomes rather than personal characteristics. Feedback goes both ways, so asking
employees for their perspectives on performance and solutions can be enlightening!

Stage 3: Performance evaluation

Use objective criteria and data to evaluate performance, and remember that evaluations
are best used as a basis for career development discussions, rather than solely for the
purpose of salary and promotions.

Stage 4: Performance improvement

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Provide additional resources and support for improvement, especially if employees look to
level-up. The performance journey is an ongoing and agile cycle, so monitoring progress,
providing support, and adjusting plans as needed should be done on a continual basis.

The connection between performance management and employee engagement

There is an undeniable link between performance management and employee engagement.

Engaged employees are likely to perform at a higher level, achieve their goals, and do so
with less stress. This inverse is also true; effective performance management practices help
improve engagement and keep the virtuous cycle going.

What does effective performance management look like?

Giving regular performance feedback to employees based on their progress towards their
goals, which also helps create a sense of purpose and direction.

Encouraging employee participation in the goal-setting process, ensuring that they have a
sense of ownership over their work.

Providing opportunities for growth and development, such as training and mentoring, to
help employees feel valued and invested in their work.

Why is engagement critical for high performance?

Engaged employees are critical for high performance: they are more productive, better
collaborators, and likely to stay with the company longer. In contrast, disengaged
employees can lead to decreased productivity, lower morale, and higher turnover rates.
Hence why focusing on employee engagement is non-negotiable to achieve high
performance.

Enlist employee commitment from the whole team. Look out for these 5 key traits of high-
performing teams and make them your north star.

Improving engagement through effective performance management

To improve employee engagement through performance management best practices, we’ve

got helpful tips any manager can apply to their day-to-day.

Before we dive into things, it’s important to understand the bigger picture of employee
engagement. Read about the 10 key factors of employee engagement and how they can help
you raise the baseline.

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Schedule regular meetings and performance reviews

Regular, one-on-one meetings and performance reviews provide employees with feedback
on their progress, offer opportunities for improvement, and help managers identify any
roadblocks. You can use these opportunities to recognize and celebrate employee
achievements, offer constructive feedback, and set clear goals and expectations. Make sure
to create the perfect one-on-one formula for less formal touch-bases, and have a thoughtful
performance review structure to get the most out of these meetings.

Scrap the conventional and discover how business leaders are changing the game of
performance reviews by leaving behind traditional performance reviews and other archaic
processes.

Set clear goals and expectations

When employees understand what is expected of them, they are more likely to feel
motivated and engaged. Managers can ensure clear communication by setting goals and
communicating expectations clearly — adjusting along the course. Make goals sweet and to
the point with these 9 employee goal setting tips for every manager.

Give feedback, often

Feedback helps employees understand where they stand, what they are doing well, and
what they need to improve. You can and should provide feedback regularly, offering both
positive and constructive feedback that is actionable and specific.

Deliver feedback in an empathetic and motivating way with these 22 constructive feedback
examples and tips for managers.

Recognize achievements and efforts

Everyone needs to feel valued and seen. When employees feel appreciated, they are more
likely to be engaged and motivated. You can recognize employee achievements through
simple gestures like private thank-you notes and company shout-outs.

Modern employees want to be appreciated and valued. Move towards a culture of

recognition with these 8 tips to increase recognition in your workplace.

Nurture employee development

Nobody looks to stay stagnant in their career, and employee development provides
employees with opportunities to grow and develop their skills, and feel proud in their own
progression. You can support employee development by providing key development goals

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as well as relevant training, mentoring, coaching, shadowing and other opportunities for
growth.

Set and track performance metrics (OKRs)

Performance metrics like OKRs are an excellent way to measure progress and ensure
alignment. Managers can use performance metrics to set clear goals, measure progress, and
provide employees with feedback on their performance.

You really don’t have to start from scratch. Try using our goals and OKR tool to make your
life easier and personalize your plans so they contribute to both employee performance
and your organization’s growth.

Using performance management to improve employee engagement in different

scenarios

Different scenarios at work require a different performance management approach. Here

are best practices and examples of what to say for the 4 most common scenarios you might
find yourself in as a manager.

Scenario #1: New hires

Provide clear onboarding and training, set achievable goals, and regularly check in to give
timely feedback and support. This will help new hires feel welcomed and valued, and set
them up for success.

Welcome to the team! We’re excited to have you on board. To make sure you have a smooth
transition, we’ve set up an onboarding plan for you, which includes training sessions,
shadowing opportunities, and regular check-ins with your supervisor. We’ll also set
achievable goals for you to work towards in your first few weeks. Don’t hesitate to ask any
questions or reach out for support.

Scenario #2: Underperforming employees

Use performance management to identify the root causes of poor performance, provide
feedback, and create development plans to help the employee improve. By doing so, you
can show that you care about the employee’s growth and development, and help them
become a more productive member of the team.

I’ve noticed that you’ve been struggling to meet the expectations we’ve set for your role.
Let’s have a chat about what might be causing this and how we can support you. I’ll make
sure to provide feedback on specific areas to focus on, and we can work together to create a

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development plan that outlines clear steps to help you achieve your goals. Regular check-
ins will help us track your progress and make any necessary adjustments, so I’ll make sure
we have those scheduled too.

Scenario #3: High-performing employees

Provide employees with opportunities for growth and development, recognize and reward
their contributions, and seek their feedback on how to improve the performance
management process. This will help keep high-performers engaged and motivated, and set
them up for continued success.

You’ve been doing an excellent job, and I wanted to take a moment to recognize and thank
you for your hard work. I’m committed to supporting your continued growth and
development in this role, so I would like your feedback on how we can improve the
performance management process. I’ll also provide opportunities for you to take on new
challenges and responsibilities that align with your career goals.

Scenario #4: Remote employees

Use video conferencing and collaboration tools to facilitate regular check-ins and feedback,
provide clear goals and expectations, and create opportunities for virtual team-building
and recognition. By doing so, you can help remote employees feel engaged and connected,
despite being physically distant.

Since we’re working remotely, I want to make sure we’re still able to communicate
effectively and that you feel supported. We’ll use video conferencing and collaboration
tools to check in regularly and provide feedback. I’ll set clear goals and expectations for you
to work towards, and we’ll create opportunities for virtual team-building and recognition.
Let me know if you have any suggestions on how we can improve our communication and
collaboration as a remote team.

Performance management and employee engagement are key to success

Employee performance management and engagement are not only important for the
success of individual employees, but also for the overall success of a company. And as a
manager, you can feel empowered knowing you play a big role in boosting productivity,
reducing turnover, and improving collaboration by prioritizing employee engagement in
your performance management process.

By focusing on engagement, you can help your employees thrive and achieve their full
potential, which can enhance overall team performance and contribute to better business
outcomes.

Principles of Performance Management

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1- Be honest and open

Good performance management relies on a good relationship.

2- Keep it simple

Keep the emphasis on development and performance, and keep the paper work and
process simple.

3- Keep in touch

Use mini-reviews to build towards a performance review.

4- Make goals interesting, challenging and engaging

This is what really motivates people to achieve.

5- Pull together

Align individual’s goals with team and organizational goals.

6- Build on strengths more than correcting weaknesses

Nobody is good at everything.

7- Get the mix right

Focus on complementary skills within your team.

8- People like to perform!

Believe it or not but people like to work, achieve, be praised, and know that their
contributions are valued.

9- Give praise

Recognize and acknowledge good performance as soon as it happens.

10- Let people know how they are doing

Give regular, timely feedback, either motivational, formative, or both.

11- Get the right tools for the job

Make sure that the resources are in place to help you run the process, and to enable people
to demonstrate performance improvement.

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12- They perform, you perform

Remember, as a manager your performance depends on your team, when they perform
well, it’s easier for you to perform well.

13- Be an example

So, set the standard by example. To motivate others be motivated yourself, it’s infectious!
Strive to be a better manager.

14- Motivate, motivate, motivate

The missing element from most performance management processes? People will only
achieve superior performance if they want to.

15- Use PERFORM to outperform

The PERFORM model has been designed to help you create the conditions that will
motivate people to superior performance.

Performance Management Overview

Performance management is the systematic process by which an agency involves its

employees, as individuals and members of a group, in improving organizational
effectiveness in the accomplishment of agency mission and goals. Employee performance
management includes:

 Planning work and setting expectations

 Continually monitoring performance
 Developing the capacity to perform
 Periodically rating performance in a summary fashion
 Rewarding good performance.

In effective organizations, managers and employees have been practicing good performance
management naturally all their lives, executing each key component process well. Goals are set and
work is planned routinely. Progress toward those goals is measured and employees get feedback.
High standards are set, but care is also taken to develop the skills needed to reach them. Formal and
informal rewards are used to recognize the behavior and results that accomplish the mission. All
five component processes (i.e., planning, monitoring, developing, rating, rewarding) work together
and support each other, resulting in natural, effective performance management.

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Planning

In an effective organization, work is planned out in advance. Planning means setting performance
expectations and goals for groups and individuals to channel their efforts toward achieving
organizational objectives. Getting employees involved in the planning process helps them
understand the goals of the organization, what needs to be done, why it needs to be done, and the
level of effort or responsibility required.

The regulatory requirements for planning employees’ performance include establishing the
elements and standards of their performance appraisal plans. Performance elements and
standards should be measurable, understandable, verifiable, equitable, and achievable.
Through critical elements, employees are held accountable as individuals for work
assignments or responsibilities. Employee performance plans should be flexible so they can
be adjusted for changing program objectives and work requirements. When used
effectively, these plans can be beneficial working documents that are discussed often, and
not merely paperwork filed in a drawer and seen only when ratings of record are required.

Monitoring

In an effective organization, assignments and projects are monitored continually.

Monitoring well means consistently measuring performance and providing ongoing
feedback to employees and work groups on their progress toward reaching their goals.

Regulatory requirements for monitoring performance include conducting progress reviews

with employees in which their performance is compared against their elements and
standards. Ongoing monitoring provides the opportunity to check how well employees are
meeting predetermined standards and to make changes to unrealistic or problematic
standards. Unacceptable performance can be identified at any time during the appraisal
period and assistance provided to address such performance rather than waiting until the
end of the period when summary rating levels are assigned.

Developing

In an effective organization, employee developmental needs are evaluated and addressed.

Developing in this instance means increasing the capacity to perform through training,
giving assignments that introduce new skills or higher levels of responsibility, improving
work processes, or using other developmental methods. Providing employees with training
and developmental opportunities encourages good performance, strengthens job-related
skills and competencies, and helps employees keep up with changes in the workplace, such
as the introduction of new technology.

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Carrying out the processes of performance management provides an excellent opportunity
to identify developmental needs. During planning and monitoring of work, deficiencies in
performance become evident and can be addressed. Areas for improving good performance
also stand out, and action can be taken to help successful employees improve even further.

Rating

From time to time, organizations find it useful to summarize employee performance. This
can be helpful for looking at and comparing performance over time or among various
employees. Organizations need to know who their best performers are.

Within the context of formal performance appraisal regulatory requirements, rating means
evaluating employee performance against the elements and standards in an employee’s
performance plan and assigning a summary rating of record. The rating of record is
assigned according to procedures included in the organization’s appraisal program. It is
based on work performed during an entire appraisal period. The rating of record has a
bearing on various other personnel actions, such as granting within-grade pay increases
and determining additional retention service credit in a reduction in force.

Rewarding

In an effective organization, rewards are used well. Rewarding means recognizing

employees, individually and as members of groups, for their performance and
acknowledging their contributions to the agency’s mission. A basic principle of effective
management is all behavior is controlled by its consequences. Those consequences can and
should be both formal and informal and both positive and negative.

Good performance is recognized without waiting for nominations for formal awards to be
solicited. Recognition is an ongoing, natural part of day-to-day experience. A lot of the
actions that reward good performance—like saying “Thank you”—don’t require a specific
regulatory authority. Nonetheless, awards regulations provide a broad range of forms that
more formal rewards can take, such as cash, time off, and many nonmonetary items. The
regulations also cover a variety of contributions that can be rewarded, from suggestions to
group accomplishments.

Performance dimensions that apply in most, if not all, jobs – from entry level right to
CEO level.

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They provide a great way to look at the top 10 critical dimensions of almost every job and
provide a great framework to guide and develop people in their roles.

These include:

1. Quantity of work i.e. the quantity or amount of work produced or the sheer volume of
work completed by employees – recognizes hard-working employees

2. Timeliness of work i.e. timely delivery of work in terms of schedules, meeting deadlines,
etc. – recognizes employees who produce work on-time and meet deadlines

3. Quality of work i.e. the quality of work produced in terms of standards, errors, waste and
rework – recognizes employees who produce quality work, work which meets standards
and work with few errors or mistakes

4. Use of Resources/Efficiency i.e. produces work in an efficient way in terms of using time,
money, materials and other people’s time well – recognizes employees who come in on
budget with efficient use of time, materials and people

5. Customer (External & Internal) Impact/Value Add i.e. work produced meets the
expectations of customers (external or internal) – recognizes employees who do work that
meets/exceeds internal or external customer standards and expectations

6. Self-Reliance i.e. recognizes employees who produce work without the need for
extensive supervision – requires a reasonable level of support

7. Department Contribution – the employee is helpful to others in the department in getting

work done and sets a tone of co-operation

8. Productive Work Habits – the employee has an overall work style which is effective and
productive in terms of time management, setting priorities and following-up on
commitments

9. Adding Skills & Capabilities – the employee is continuously adding new capabilities in
terms of skills, knowledge, and attitude to get work done in new/better ways and building
for the future

10. Alignment & Compliance – the employee behaves in a way that is aligned with the
values, culture and mission of the organization as well as common organizational practices
and procedures.

This is a very useful way to consider performance and incorporating the 10 dimensions
really adds value to the performance management process.

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