CODE PERFORMANCE MANAGEMENT SYSTEM

786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

LESSON 1: PERFORMANCE MANAGEMENT – Decreases the time it takes to create strategic or

FRAMEWORK operational changes by communicating the
changes through a new set of goals
WHAT IS PERFORMANCE MANAGEMENT (PM)? B. Motivated workforce
– A process of ensuring that a set of activities outputs – Optimizes incentive plans to specific goals for over
meets an organization's goals in an effective and achievement, not just business as usual
efficient manner – Improves employee engagement because everyone
– A process of ensuring that a set of activities outputs understands how they are directly contributing to
meets an organization's goals in an effective and the organizations high level goals
efficient manner. – Create transparency in achievement of goals
– Focus on the performance of an organization, – High confidence in bonus payment process
department, employee or the processes in place to – Professional development programs are better
manage particular tasks. aligned directly to achieving business level goals
– Disseminating standards by senior leadership at an C. Improved management control
organization and by task owners. – Flexible, responsive to management needs
– It is necessary to outline the role of each individual in – Displays data relationships
the organization in terms of functions and – Helps audit/comply with legislative requirement
responsibilities to ensure that performance management – Simplifies communication of strategic
is successful. goals scenario planning
– Provides well documented and communicated
IMPORTANCE OF PERFORMANCE MANAGEMENT process documentation
– Alignment of objectives facilitates effective delivery of D. Employee development planning
strategic and operational goals. – Selection of the most appropriate and suitable
– It may deliver a significant return on investment through development intervention to improve employees'
a range of direct and indirect sales benefits, operational knowledge, skills and behaviour.
efficiency benefits and by unlocking the latent potential – Factual basis for compensation and rewards.
in every employees work day. – Factual basis in consideration with mobility factors
– To find out how well employees had performed relative - transfers and promotions
to performance targets or key performance – Keeping employees engaged
indicators (KPIs) during a specific performance period. – Retaining talents
– In companies, it results in less turnover and creates a – Developing leaders from within
better workplace environment
CONTROL FUNCTION OF MANAGEMENT
PURPOSE AND GOALS OF PERFORMANCE – It ensures that activities in an organization are performed
MANAGEMENT as per the plans.
– A clear and consistent system within which to that will – It safeguards that an organization’s resources are being
lead to increased productivity used effectively & efficiently for the achievement of
a. This system shows employees the pathway to predetermined goals.
success, allows for the measuring of performance – Controlling is a goal-oriented function of every manager.
coupled with feedback and offers training and – Controlling is a primary and pervasive function of every
development opportunities. manager.
b. Performance management allows management to
understand what their employees are doing and IMPORTANCE OF CONTROLLING ARE
track progress on company objectives while 1. Accomplish Organizational Goals
providing consistent feedback. – brings to light the deviations, & indicates corrective
action
OBJECTIVES OF PERFORMANCE MANAGEMENT 2. Judging Accuracy of Standards
A. Direct financial gain – helps in keeping careful and progress check on the
– Grow sales changes which help in taking the major place in the
– Reduce costs in the organization organization & in the environment
– Stop project overruns 3. Making Efficient use of Resources
– Aligns the organization directly behind the CEO's – each activity is performed in accordance with
goals predetermined standards and norms.
4. Improving Employee Motivation

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 CODE PERFORMANCE MANAGEMENT SYSTEM
786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

– each employee knows well in advance what they 2. Structural control

expect & what are the standards of performance on – focus on structure serving the intended aim
the basis of which they will be appraised. 3. Tactical control
5. Ensuring Order and Discipline – control deals with the departmental objectives
– keeps a close check on the activities of employees 4. Strategic control
and the company can be able to track and find out – determining whether the effectiveness of a
the dishonest employees corporate, business and functional strategies
6. Facilitating Coordination in Action are successful in helping organizations meet
– each department and employee is governed by pre- its goals.
determined standards and goals which are well d. On Basis of Responsibility
versed and coordinated with one another. 1. Internal control permits highly motivated people to
exercise self-discipline
PROCESS OF CONTROLLING 2. External control is in the hands of
1. Establishing of Standards managers/supervisors and exercised through
2. Measurement of Performance formal systems.
3. Comparison of Actual and Standard Performance
4. Taking Corrective Actions and Reinforcement successes REQUIREMENTS OF EFFECTIVE CONTROL
SYSTEM
MANAGEMENT CONTROL ALTERNATIVES AND 1. Focus on Objectives and Needs
THEIR EFFECTS 2. Immediate Warning and Timely Action
a. On Basis of TIMING 3. Indicative, Suggestive, Corrective
1. Feed forward of preliminary control 4. Understandable, Objective, and Economical
– anticipate the likely problems and to exercise 5. Focus on Functions and factors
control even before the activity has started or 6. Strategic Points Control
problem has occurred or been reported. 7. Flexibility
Example – preventive maintenance 8. Attention to Human Factor
2. Concurrent control 9. Suitability
– regulation of ongoing activities that are part
of transformation process to ensure that they CONTROL TECHNIQUES
conform to organizational standards 1. Financial Control
3. Feedback control a. Financial Statements
– corrective action is taken after analyzing b. Financial Audits
variances with the planned standards at the c. Ratio Analysis
end of the activity. d. Budgetary Controls
b. On Basis of Designing Systems e. Break-even Analysis
1. Market Control f. Accounting –
– based upon market mechanisms of i. Responsibility accounting
competitive activities in terms of price and ii. Cost accounting
market share iii. Standard cost approach
2. Bureaucratic Control iv. Direct costing
– focuses on authority rule and regulations, v. Marginal costing
procedures and policies. 2. Marketing Controls
a. Market Research – to assess customers’ needs,
expectations, delivery and competitive scenarios.
3. Clan Control b. Test Marketing – assess consumer acceptance of a
– based on work-related and performance new product.
measures. Control systems are designed in a c. Marketing Statistics
way that give way to an organizational 3. Human resource control
identity and culture. 4. Information Control – confidentiality
c. On Basis of Management Levels 5. Production Control – inventory control and quality
1. Operational control control
– focus is on the processes used by the 6. project Control - network analysis
organization for transforming the inputs
(resources) into outputs (products/services).

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 CODE PERFORMANCE MANAGEMENT SYSTEM
786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

2. To clarify the goals and objectives that need to be

LESSON 2: PERFORMANCE MANAGEMENT CYCLE achieved
3. To identify the competencies required for doing the job
4. To create appropriate performance and career
development plan for the individual or company

PERFORMANCE PLANNING PROCESS

1. Performance Planning – set the goals
2. Performance Monitoring – performance measures
3. Development plans – actions required to achieve desired
goals
4. Performance rating
5. Rewards and feedback – evaluation

IMPORTANCE OF PERFORMANCE PLANNING

1. It increases and improves communication between
leaders and staff – SMART objectives
 Specific - describes what the end result will look
like
 Measurable – expressed in quantifiable terms
 Achievable
ORGANIZATIONAL PERFORMANCE
MANAGEMENT CYCLE  Relevant
– includes three highly integrated phases:  Time-bound
1. Performance Planning 2. It improves performance – connect individual’s goals
a. Strategic planning to clarify the purpose, goals with the company goals
and strategies to achieve the goals 3. It improves employee development – things changes
b. Adopting the necessary structure as a strategy over time
to achieve the goals
c. Guiding the necessary organizational What information sources How are Performance
behavior, including the necessary nature of its are reviewed? Planned
leadership and management, as a strategy to Employee’s classification Task Analysis
achieve the goals specification
2. Performance Appraisal Performance Factors List Key Performance Areas
a. Organizational evaluations/diagnoses to Departmental goals for Key result areas
monitor progress toward the goals upcoming FY
3. Performance Improvement Unit or group level goals, Task and target
a. Organizational Changes to the achieve goals including supervisor’s identification
even better individual Performance
– Each of these significant activities is also a cycle of Goals
highly integrated activities. The way that a social system Previous year’s Activity/action plans
does an organizational cycle depends on its culture, its Performance Plan
current life cycle and the expertise of the leaders and Previous year’s Goal setting exercise
managers in the system. The same is true for an Performance Evaluation
individual, depending on his or her personality, maturity
and expertise in leading and managing oneself EXAMPLE OF PERFORMANCE PLANNING
Step 1: Obtain and Review the Appropriate Material
PERFORMANCE PLANNING
 Performance Management Resource Guide
– A systematic and structured approach to achieve desired
 Entity and Department Balanced Scorecards
organizational goals and the best way to reach them
 Staff Member's Job Description
PERFORMANCE PLANNING OBJECTIVES
 Expected Job Results Template
1. To agree on the individual or department’s job
responsibilities  Performance Planning and Review form
Step 2: Prepare for Performance Planning

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 CODE PERFORMANCE MANAGEMENT SYSTEM
786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

 Review entity and department balanced scorecards and results in terms of units of performance, that is, quantity,
strategies: quality, cost or timeliness.
o Obtain documents 2. Ensure the organization's action plans directly contribute
o Review and clarify with Next Level Supervisor to the organization's goals.
and others as appropriate. 3. Rank your preferred results
 Inform Staff Member of upcoming Performance 4. Identify key performance indicators that will suggest
Planning Session: whether you have successfully achieved the goals.
o Describe and discuss the overall performance 5. For each key performance indicator, identify standards
management process for evaluating how well the desired results were
o Review performance forms with Staff Member achieved, for example, "behind schedule", "on schedule"
o Describe objectives of performance planning or "ahead of schedule".
session 6. Integrate, align and reality check your action plans
o Provide background information and related 7. Integrate the action plans throughout the organization
materials as available and appropriate 8. Document a Performance Plan - including the desired
 Schedule Performance Planning Session: results, key performance indicators and standards. Some
o Encourage Staff Member to "rough draft" a few organizations might refer to this as a short-term (1-year)
important Expected Job Results and Behaviors or strategic plan or a capacity building plan
list job responsibilities ORGANIZATIONAL PERFORMANCE APPRAISAL
o Allow Staff Member at least one week to prepare PHASE
and plan. (The activities in this phase are much of what leaders and
 Prepare preliminary drafts of Staff Member Expected managers do during the year in an organization)
Job Results and Behaviors and review job description. 9. Conduct ongoing monitoring of the progress of the key
Step 3: Conduct Performance Planning Session performance indicators and action plans
 Confirm Staff Member's understanding of the 10. Exchange ongoing feedback about performance
performance management process 11. Conduct a performance appraisal (sometimes called
 Review balanced scorecards and strategies: performance review).
o Seek consensus on departmental goals and 12. If performance meets the desired performance standard,
strategies then reward for performance, for example, letter of
 Discuss Staff Member role and job responsibilities: recognition, increased compensation and/or a promotion
 Review job description and confirm job purposes ORGANIZATIONAL DEVELOPMENT
 Discuss relationship between job and department goals (IMPROVEMENT) PLANNING PHASE
and strategies 13. If performance does not meet the desired performance
o Review job description for clarity and agreement standards, then develop or update a Performance
o Establish Expected Job Results and Behaviors by Development Plan to address the performance gap
sharing preliminary draft and discussing areas of 14. Repeat phases 9 to 13 until performance is acceptable or
disagreement or need for clarification the standards are changed
o Record defined Expected Job Results and
Behaviors
o Determine resources and skills required to
complete the Professional Development Plan
 Distribute copies of the Performance Planning and
Review form:
o Copy to Staff Member
o Supervisor retains original

Another way to summarize the Organizational Performance

Management Cycle is to look into the activities in each phase

ORGANIZATIONAL PERFORMANCE PLANNING

PHASE
1. Review the organization's preferred goals for the next
year and, for each goal, specify preferred organizational

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 CODE PERFORMANCE MANAGEMENT SYSTEM
786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

needs. Create a plan to accomplish the required

and the desired learning and growth.
3. Take Action
– Provide ongoing and frequent direction and
support while the employee applies energy and
LESSON 3: CREATING PERFORMANCE focus toward accomplishing the goals
MANAGEMENT CULTURE
At this point we are done with the fundamental concepts
about performance management and have started the first 4. Assess Performance
phase of the process: Performance Planning. – Evaluate the progress being made toward the goals
A structured performance management process can strongly and provide ongoing feedback to the employee on
support ongoing efforts to build accountability into the a formal and informal basis
organizational culture. It helps to keep everyone aligned with 5. Provide Reward
the strategic goals, and it focuses people’s attention on what – Acknowledge and reward employees through
needs to get done. Without it, management can easily get off organizational programs, local recognition, and
track and forget to measure and reward everyone who is other approaches tailored to individual employees.
important. This may also involve consequences and
disciplinary action for poor performance
AN EFFECTIVE PERFORMANCE MANAGEMENT
SYSTEM SPECIFICALLY Performance management is a joint effort. Leaders,
 Communicates how individuals contribute to business managers and employees all have a role to play in creating
success and how they will be evaluated. performance excellence. Having an effective process in place,
 Aligns individual goals with key business priorities, coupled with the skills and abilities to conduct it effectively,
resulting in greater focus, more efficient use of to manage performance makes it easier for everyone to
resources, and less time wasted on non-value added perform well in their roles and to achieve your organization’s
activities strategic goals.
 Provides a comprehensive system for The next thing we are going to establish is a
recognizing what gets done and reinforcing how it is performance management culture.
achieved
 Creates a discipline of measuring progress against WHAT IS COMPANY CULTURE?
specific goals and making adjustments as necessary  It is the set of behaviors that determine how things get
done at your company
Performance management needs to be an ongoing activity,  It is both how and why things get done
not a one-time event, to achieve the desired results (i.e.,  When company cultures are particularly high-
improved accountability). It requires two-way conversations performing, they can impact all corners of your
between manager and employee so that both are working organization
from the same page in terms of what is being managed and  Increased engagement, productivity, and retention are
how it is being managed all outcomes of a high-performance work culture
– Every organization has a company culture. No matter
A GOOD PERFROMANCE MANAGEMENT PROCESS the business size, industry or location, every business
INVOLVES FIVE KEY STEPS: has an identity that reflects the goals and expectations of
1. Establish Goals the organization. However, not all company cultures are
– Start by linking what needs to get done to the created equal or reflect what its top leadership believes
strategic planning framework. Align the is their culture
competencies, skills and knowledge of the – Amidst the myriad tools that organizations have at their
employee to create specific action items that will fingertips, it is the culture of a company that often
guide the employee’s behavior going forward. makes the difference between a highly successful
2. Plan Development organization and an average organization. The reason
– Discuss short- and long-term development needs, that a performance management culture is so important
including agreement on how and when amidst the technological advantages that organizations
development will occur, as well as prioritization of have today is because it prioritizes people over results
development to support more immediate business

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 CODE PERFORMANCE MANAGEMENT SYSTEM
786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

KEY FEATURES OF PERFORMANCE 1. Collaboration: Employees cooperate, share, and work

MANAGEMENT CULTURE well together
1. It is dependent on the development of employee talent 2. Innovation: The Company encourages new ideas, and
and motivating an organization through a shared goal individuals are able to move ideas through the
2. Employees that feel valued within their organization are organization
more likely to report better physical and mental health, 3. Agility: The Company responds and adapts to
higher levels of engagement, motivation and career opportunities
satisfaction 4. Communication: Employees send, receive, and
3. Even if organizations demand the most out of their understand the necessary information
employees, they provide a creative, collaborative culture 5. Support: Employees provide each other with the
that stimulates innovation resources and guidance they need to be successful.
4. An ongoing strategy must take place all year long They’re confident in company leadership
6. Wellness: The Company has the policies and resources
STRATEGIES TO ENACT PERFORMANCE to help people maintain physical and mental health
MANAGEMENT CULTURE 7. Work Environment: The Company has a comfortable
1. Motivate Change workplace where people have the resources to be
 Assess the current culture of the organization and effective in their work
the roadblocks to cultural performance 8. Responsibility: Employees are accountable for their
 Organizational leaders must consistently act out actions and have the independence to make decisions
the organization’s mission and brand strategy regarding their work
 Leaders must review employee talent without 9. Performance Focus: Employees know what determines
outdated perceptions success in their role, and they are rewarded or
2. Create the Groundwork recognized for achievements
10. Mission and Value Alignment: Employees know,
 Introduce new concepts and expectations for both
understand, and believe in the company’s mission and
employees and managers.
values
 A performance management culture is established
through open, honest and clear communication for
OTHERS VIEW HIGH-ACHIEVING PERFORMANCE
employees to internalize and take ownership of the
CULTURE BY ADOPTING THE FOLLOWING STEPS:
goals of the organization
1. Determine the behavioral changes that will help you
3. Sustain Behavior
boost business performance. Pick specific behavioral
 Provide resources for employee motivation that
changes that will influence the results of your company
drive individual performance and sustainability
and communicate these behaviors to your employees in
 Employees must be given ongoing feedback in
a clear manner
both expectations and accomplishments
2. Reframe the mindsets of your employees. The
 Through the development of sustainable
mindsets that workers have tend to drive what they do
expectations, managers are able to delegate quicker
and should do at your company. Managers and
and more efficiently to employees who grow with
supervisors will need to reframe mindsets by paying
increased expectations and organizational goals
more attention to the cues they send out in order to
 Routine check-ins in employee performance gives create new behaviors. Changing underlying mindsets
employees a constant feed of information that will go a long way toward improving performance
stimulates professional growth and performance 3. Create significant business initiatives to better
4. Provide New Resources reinforce the preferred company culture. Workers
 Enable employee motivation through an evaluation tend to take cues from business leaders and managers in
of current skills and provide resources to improve order to develop new values among the workforce and
upon and gain new expertise change the company culture, model the right behaviors
 Employees that grow in various expertise and and mindsets to drive better results
skills are able to adapt more quickly to 4. Create opportunities for your workers to overcome
organizational demands as well as contribute to challenges in order to change their behaviors. Create
wiser and more engaging solutions to industry a tailored platform where employees can figure out what
problems drives their own personal behavior so that they can
overcome the challenges and barriers to change those
HOE DO I CREATE A HIGH-PERFORMANCE behaviors for the better
CULTURE?

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 CODE PERFORMANCE MANAGEMENT SYSTEM
786
school: UNIVERSITY OF SAINT LOUIS – TUGUEGARAO
department: SCHOOL OF ACCOUNTANCY BUSINESS & HOSPITALITY

5. Change work schedules and assignments to provide a

coherent experience. Creating a space where each of
the factors works well together will create a more
cohesive and coherent experience for your workers that
will reduce confusion
6. Focus on implementing employee-centric changes.
Often cultural changes at companies start at the top and
work their way down to the workers. Instead of focusing
on executives and managers, begin implementing an
employee-centric platform for cultural changes
7. Develop a plan of action. Set specific, measurable
goals and objectives every year. Carefully plan out your
goals and the exact schedule you will follow. In
addition, you will be required to concisely monitor your
results to ensure your plan of action succeeds
8. Recognize and communicate key data. Analytics tools
are a necessity when communicating relevant data and
monitoring metrics among your team members. The
right analytics tools can help you reach and engage your
employees in order for your workforce to exhibit high
performance
9. Provide Measurements to Drive High Performance.
Research shows that high-achieving employees seek out
metrics, results, and rewards. They crave feedback and
positive results in order to be provided with praise or
monetary rewards. This will drive high performance at
your company. In addition, when you hire a high
achieving individual, this tends to cause others on your
team to work harder
10. Hire the best people for the job. When interviewing
individuals for different positions, be sure to focus on
hiring employees who will help your company grow and
succeed especially those who are high achieving. This
will ensure your company obtains greater profit and
meets your goals

By building a performance management culture,

organizations better adapt to changing technologies, create
environments of creativity and collaboration, as well as
develop sustainable results. As technologies continue to
change and organizations utilize the vast resources for
industry advancement, the constant of human capital must
remain the same.
Creating a performance management culture impacts a
large amount of business success, which is why it is
important to utilize the best individuals to enact
organizational change. Analyzing employee talent and
understanding the core organizational needs allows
corporations to seamlessly improve upon existing strategies

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