Performance Planning

• Performance Planning: This is the first phase in performance

management process. Planning for performance includes
specifying organizational goals and performance outcomes
needed from groups and individuals in order to reinforce
their efforts for the attainment of desired goals.
• 1.Laying down strategic plans and yearly organizational goals.
• 2) Establishing employee's performance plan based on job
description
• 3) Identification of necessary organizational functions, which
is done through various ways like Key Result Areas (KRAs),
Key Performance Areas (KPAs), goal-setting exercises, task
and target identification, activity plans, e
 Performance Analysis
Performance Analysis: This is primarily concerned with
• analysis and understanding different factors that
contribute to performance over a given period of time.

1)Continuous monitoring and mapping of employee's

performance
2) Generating feedback in relation to tasks assigned
3) Setting performance standards and measuring results
against these
4) Identifying critical competencies required for performing
the task Standards.
5) Identifying causes for poor and good performance
Classifying the identified causes into motivational and suport
factors.
Process of performance management
Performance Appraisal
• Performance appraisal is also an important management
technique as it into facilitates maintenance of performance
records, achieving improved Com productivity through goal-
setting and provides an objective standard for laying down
compensation policy Therefore, performance appraisal can
be said as an objective measure for examining the relative
worth of an individual Or employee within the organisation
Performance Development
• In essence, therefore, performance development can be
understood as a process which aims at creating a corporate
culture characterized individual growth and learning.
Further, during this developmental process performance
development aims at achieving following two objectives:
• 1) Maintaining individual performance at a level which
meets performance standards.
• 2) Improving job related competencies, thereby making the
employee suitable for different positions within the
organisation
Performance Management Audit
• This is a unique process of assessing the relative importance
or value of the performance management system, keeping in
mind various organizational and policy changes. In this
attempt performance management audit seeks to:
• 1) Assess common principles and practices
• 2) Formulate different techniques of performance appraisal
• l3) Find ways for arriving at agreement between individual
and team goals
• 4) Develop relationship between performance and reward
system.
• 5) Develop system of training and coaching in consonance
with performance manageme
What is a Performance Management
System?
A performance management system is a tool used by HR teams to
measure and analyze employee performance. Organizations use this
system to help their workforce enhance productivity by improving their
performance over time.
Performance management systems typically cover performance
appraisals and employee development.
Benefits of Performance Management system
• Highlights training needs
• Introducing more frequent reviews, whether formal or informal, can
help to better understand the skillset of employees. Providing an open
forum for employees to share and discuss their roles regularly can help
to identify training needs before they have an impact on productivity.
Benefits of Performance Management system
• Boosts morale
• Everyone likes being told they’re doing a good job. Performance
reviews provide the perfect setting to formalise and document praise.
But reviews shouldn’t just be about setting objectives for the coming
quarter. It should also provide an environment for a line manager to
recognise individuals on their team.
Benefits of Performance Management system
• Helps with identifying the right employees for promotion
• Regular reviews are a great way to better understand the performance
of your employees and their suitability for promotion.
• All employees will be going through the same performance review
process. As such managers can better evaluate them for promotion,
salary increases or transfer in the same, consistent manner. Not only
will this help to ensure the right employee is chosen for promotion;
but will allow for more transparency and fairness in your selection
process.
Benefits of Performance Management system
• Helps define career paths
• Clearly defined, identifiable career paths provide employees with a
goal within the organisation, boosting motivation and significantly
reducing staff turnover.
Benefits of Performance Management system
• Supports workforce planning
• Frequent reviews with employees as part of a wider performance
management strategy can also help with workforce planning.
Discussing current and future workloads with employees can help to
identify any requirements for future staff.
Benefits of Performance Management system
• Increases employee retention
• Research by HR Daily Advisor earlier this year found that companies
who implement regular employee feedback have turnover rates that
are 14.9% lower than for employees who receive no feedback. High
staff turnover could have a major impact on your company. Not to
mention the impact on staff morale and simply getting things done.
Benefits of Performance Management system
• Delivers greater employee autonomy
• Once your employees are aware of the wider business’ objectives and
their contribution to those; they are relatively free to make their own
choices about how they go about their responsibilities. As a result,
employees are happier, more committed, more productive and more
loyal than those whose every action is dictated.
Benefits of Performance Management system
• Improves accountability
• Accountability plays an important role in the success of an
organisation, but ensuring effective accountability isn’t easy. Often,
accountability is equated to a culture of blame. This is not only wrong,
but highly detrimental to company culture and employee morale.
Effective accountability defines a company’s mission, values, and
goals, and ensure each individual understands their role within that.
Dimensions of Performance Management

1.Time Dimension
2. External Quality Dimension
3.Cost Dimension
4.Flexibility Dimension
5. Internal Quality Dimension
6. Result and Output
Dimension of Performance
Management
• Time Dimensions Lead time is the time it takes to
handle an entire case. Through the put time is the
time between the moment a task is completed and
the moment the next task is completed. Throughput
time is composed of service time, queue time, wait
time, move time, and set-up time.

• External quality Dimension is defined from the

customer's side, i.e., the person or organisation that
initiates the workflow and will receive the output.
 Dimension of Performance Management
• Internal Quality Dimension: Internal quality can be seen as
the quality of a workflow from an operator's perspective. In this
context, internal quality involves the working conditions. Task
design characteristics and social factors are very important. High
internal quality can result in high motivation, high job
satisfaction, high psychological well-being, high external quality,
and low absenteeism.

• Cost Dimension: Cost dimension is closely related to the other

dimensions. For example, long lead times can result in amorously
process, low quality can lead to expensive rework, and low
flexibility can also result in a more costly process execution)
 Dimension of Performance Management
• Flexibility Dimension: Flexibility is the least noted criterion to
measure the effect of a redesign effort. Flexibility can be
defined as "the ability to react to changes". It appears that
flexibility can be identified for individual resources, for
individual tasks, and for the

• Result and Output: Most acceptable and visible as well as

measurable dimension of performance is result or the output.
The sales figures, number of customers, financial targets., are all
stated in result form. They are called key result are.
Principles of Performance Management
1. Translation
2. Commitment
3. Management
4. Integration
5. Communication
6. Measurement
7. Feedback
8. Clarification
9. Shared Understanding
 • Translation: Is the Principle of Management translates
Corporational goals into Individual,team,Department divisional
goals

• Integration: It is an continuous process in for development of

individual and organizational performance

• Management: It provides effective and contextual

managements of external environment for over coming the
obstacle and improvise the managerial Performance.

• Commitment: It seeks commitment towards individual and

organizational Performance expectations
 • Clarification:The organizational goals need translated into
individual, team, and departmental/divisional goals.

• Measurement: It measures and assesses all

performance against jointly agreed goals

• Communication: It requires a management style that is

open and honest and encourages two-way communication
between superiors and subordinates. Measurement: It
measures and assesses all performance against jointly
agreed goals
• Feedback: Organisation must have a foolproof
feedback system manages/
individuals/departments` performance. It should
be monitored continuously and generate
feedback loops for better performance
management.

• Shared Understanding: It creates a shared

understanding of what is required to improve
performance and how it will be achieved Performance
management through the process of shared
understanding not only helps in achieving the
organizational
What Is Performance Excellence
Performance excellence provides the framework and an
assessment tool for understanding organizational strengths
and opportunities for improvement. Achieving excellence
is the result of high performance throughout the entire
organisation. Every process performed in an organisation
has an external or internal customer as its end result. If
only one process fails to deliver high performance results,
a customer
Attributes of Performance Excellence

• Bias for Action: This is about getting things done. There must be a free flow of
information and open communication. The open and informal organisation is
more flexible and is able to take quicker action to changes needed to keep up in
today's business world. Successful companies who want to get things done are not
afraid to try new things and experiment.

• Close to the Customer : Excellent companies really get close to their customers
and encourage them to help improve the product, quality, reliability and service
Attributes of Performance Excellence

• Autonomy and Entrepreneurship: They suggest that it is vital to

encourage the entrepreneurial spirit among staff and to encourage staff
to develop positive attitudes

• Productivity Through People: This means that everyone is respectful

and enthusiastic towards each other. This creates an atmosphere that
enables good work
Attributes of Performance Excellence

• Hands-On, Value-Driven: This is about company philosophy and values being

discussed openly. The right values, clearly expressed, will help to define an
organisation Leaders in the organisation are also positive role models.
• Stick to the Knitting: This is about the company focusing on doing what it does
best.
• Simple Form, Lean Staff: This can be hard particularly in large organizations.
But one needs to work at making things understandable for the tens, hundreds or
even thousands of people who are making things happen, i.e., the employees.
Also, authority is shared as much as possible between these employees
Attributes of Performance Excellence

• Simultaneous Loose-Tight Properties: This is about excellent companies

holding tight to their core values is about good planning and controlling that still
allows for worker autonomy and a less rigid atmosphere.
Pillars of Human Performance

Understanding the Context: implies employees'

reflective and critical understanding of the dynamic
business environment of their enterprise, It also implies
employees' comprehension of their company's vision and
strategy, business system design and profit model,
competitive logic and core value proposition. More
importantly, it implies employees' clarity of
understanding regarding their company's processes and
mechanisms for the creation, capture, and delivery of
value; and the nature and rationale of their own
individual and collective efforts towards realizing their
company's vision and strategy.
Pillars of Human Performance
• Ability to be Effective: The second pillar, i.e,
the ability to be effective, in the context of human capital,
implies employees abiding dedication to work excellence in
their broadly defined and non-rigid work roles. More
importantly, it implies employees 'sustained oorientation
towards learning, up gradation of skills, cultivation of new and
needed capabilities, expertise, creative thinking and use of
knowledge; for both problem-solving and innovation;
streamlining of process, procedures, and routines for
eliminating non-value-adding activities; and experimentation
and initiatives in search of opportunities. This is so, for the
concept of performance excellence, or effectiveness, is neither
static nor fixed
Pillars of Human Performance

• Motivation to Excel: The third pillar i.e., motivation to excel?

• implies an organisation-wide shared ethos of a high degree of
commitment to enterprise goals, and a high level of cooperation
among employees towards working together to achieve those goals in
turn imply a high level of trust and among employees Towards
working to achieve those goals.
Performance prism

• The Performance Prism (PP) is referred to by its Cranfield University

developers as a ‘second generation’ scorecard and management framework.
The distinguishing characteristic of the Performance Prism is that it uses as
its starting point all of an organisation’s stakeholders, including investors,
customers and intermediaries, employees, suppliers, regulators and
communities, rather than strategy.
• According to PP proponents, strategy should follow from stakeholder
analysis. The PP framework also focuses on the reciprocal relationship
between the organisation and its stakeholders, as opposed to just
stakeholder needs.
Performance prism

There are five ‘facets’ to the Performance Prism which lead to key questions for
strategy formulation and measurement design:

• Stakeholder Satisfaction: Who are our stakeholders and what do they want and
need?

• Strategies: What strategies do we need to satisfy these wants and needs?

Performance prism
• Processes: What processes do we need to
execute these strategies?

• Capabilities: What capabilities do we need to

operate our processes more effectively and
efficiently?

• Stakeholder Contribution: What do we want and

need from our stakeholders if we are to develop and
maintain these capabilities?
What benefits does the Performance Prism
provide?
The Performance Prism allows organisations to develop strategies, business
processes and measures geared to the specific needs of all important stakeholder
groups.
By taking a broad stakeholder perspective that includes regulators and business
communities, the PP enables an organisation to more directly address the risks and
opportunities in its business environment.
Using the PP to develop measures for each relevant stakeholder facilitates the
communication and implementation of strategy.
Expectancy Theory

• The expectancy performance management theory is a performance management

model that explains why some employees perform better than others. This theory
focuses on the beliefs that employees have about their abilities, their behaviour
and the outcomes of their actions. It focuses on three factors:
• Expectancy: An employee's belief that if they perform well, positive
consequences follow.
• Instrumentality: An employee's belief that positive consequences directly result
from their actions, such as the belief that doing good work leads to a raise.
• Valence: An employee's attitude towards the possible outcome, such as if an
employee enjoys undertaking more responsibilities.
Goal- Setting Theory

• The goal-setting theory is a performance management theory that involves

identifying specific goals and objectives for employees before setting up a system
that tracks their progress towards those goals.
• Such goals are usually quantitative so the employee can understand exactly how
they've progressed towards achieving them so far. The goal-setting theory often
applies to organisations that want to improve their employee's productivity levels.
• It typically works because it gives employees a clear picture of what their
manager requires of them and how their manager expects them to complete tasks,
which can motivate them to work harder and smarter.
Porter and Lawler Model
• Porter and Lawler extended Vroom's work by examining more closely
the traits and perceptions of the individual and the nature and impact
of rewards on motivation. The Porter and Lawler model is a process
model that explains the conditions and processes (contingencies) by
which motivation to work takes place
Equity Theory
• Equity theory is a motivation theory that says that employee
motivation is mostly determined by their sense of fairness at work.
Employees keep a mental record of their job's inputs and outputs, and
then utilise that record to compare their inputs and outputs to those of
others. Effort, performance, skills, education, and experience are
examples of inputs, whereas compensation, benefits, and promotions
are examples of results. Employees may feel demotivated and
unsatisfied with their jobs if they believe their input-to-output ratio is
not equal to that of their peers.
Emerging Trends and Practices of PMS in
Indian Organisation

• 1.Expect Job – Hopping

• 2. Work with Freelancers

• 3. Mobile Take Overs

• Remote working
 Competency-based performance management
System

Competency-based performance management measures

employee performance based on their improvements
since the last competency evaluation. In this type of
system, the employee is measured against his own past
performance, and he does not necessarily compete with
other employees on his competency skill levels
Types of Competencies
• Core Competencies :Analytical skills, critical thinking , Problem Solver
etc

• Cross Functional competencies: Computer proficiency, accounting

knowledge etc

• Functional Competencies: Subject knowledge, technical knowledge

etc
Types Of Competencies Based On Organisational Roles
Organisational competencies

Job Competencies

Technical competencies

Behavioural competencies

Personal competencies

Management Competencies

Leadership competencies
Process of Developing Competency –Based
PMS
• Identify Core Position Within The Organisation
• Identify Key Soft Skills & Competencies for the Positions
• Assess Current Skill/Competency Levels of Incumbents and Candidates with
Feedback Mechanisms
• Provide Training and Development in Necessary Competencies
• Conduct Behavioral Interviewing
• Performance Appraisal System Infrastructure Important/Reflect the
Competencies Required in Performance Appraisal
• Establish Competency Performance Expectations for Incumbents
• Provide On-Going Feedback, Coaching, Evaluation, and Recognition
Methods of Building Competency Models
• Job Competency Assessment Method
• Modified Job Competency Assessment Method
• Generic Model Overlay Method
• Customised Generic Model Method
• Flexible Job Competency- Based PMS
Benefits of Competency based performance
1) Increases personnel safety.
2) Increases protection of the environment.
3) Increases reliability of facility operation (throughput and product quality).
4) Increases operating life of equipment
5) Reduces operating/maintenance costs.
6) Ensures employees to achieve a high level of competence quickly and efficiently
7) Ensures employees can make effective decisions in response' to abnormalities.
8) Reduces employee dependency on other groups because of lack of knowledge and skills.
9) Improves communication and working relationships between groups.
10) Prevents potential litigation due to employees performing tasks they have not been
trained to do
Benefits for Employees
• Provides a systematic and flexible method for employees to acquire Ensures a safer
workplace for everyone new skills and knowledge.
• Provides clear direction for learning new job skills.
• Provides an opportunity for employees to train at their own pace.
• Reduces the employee's stress while learning new skills- the training system ensures
adequate training is provided before an employee assumes responsibility
• Reduces the supervisor’s stress -- the supervisor knows that an employee. Who is
responsible for a job has a proven level of competence
• Ensures accurate documentation of all acquired skills and knowledge.
• Ensures employees are trained in all safety-related aspects of their jobs.
• Provides a reference resource for day-to-day requirements
• Increases the, potential for job satisfaction.
E performance Management system

• is an electronic system designed with the goal to support management

to determine, monitor, measure and manage performance through
analysis for business processes efficiencies and results effectiveness
through informed decision making.
• E-performance management is the planning, implementation, and
application of information technology in managing the PMS. E-
performance management is a part of e-HRM or HR information
system (HRIS).
Features of E PMS
• Job-or individual-centred performance contracts
• 2 Uploading of performance criteria,
• 3)Secure online appraisal with password.
• 4)Automatic e-mail notification of completed appraisal to employee
and manager
• 5 Workflow system to monitor appraisal progress.
• 6) Archive retrieval possible for retrieval of previous period appraisals
• 7 Assigning different weighting protocols.
• 8) Viewing competency ratings
 Process of EPMS
Stage 1: Establish and Weight Criteria

Stage 2: Rate the Employee

Stage 3: Manager Sets a Formal Meeting with the Employee

Stage 4: Finalise Electronic Performance Documents for HR

Approval
 Benefits of E PMS
• Benefits to Organizations: It includes: I Electronic performance management
provides a flexible tool, to manage employee performance in organizations with
dynamic
• It allows employees to collaborate with one or many
performaneeTWTSappraisers t identify appropriate performance criteria on a
document by document basis. In' addition, both employees and appraisers may
nominate others in the organisation to participate in the review process via the
delivered multi-rater process
• Electronic performance management also helps in screening employees being
appraised against the skills and competencies that have been identified for key
positions. Moreover, as an employee's performance, skills or competencies
change, their ranking in the succession plan can be updated according to both their
individual performance and their performance relative too thier succession
candidates
Benefits of E PMS
• Performance management is a key part of an organisation’s integrated
human resource strategy
• Easy to drill-down through performance data for initiating root cause
analysis for marginal performers
• Getting instant feedback on performance with drill-down to individual
employee performance;
• No need to write performance contracts each year, simply upload, and
edit from a previous period; and
• Development needs emanating from performance discussions are
automatically fed into the individual development plan.
Potential Appraisal
• Potential appraisal is a future – oriented appraisal whose main
objective is to identify and evaluate the potential of the employees to
assume higher positions and responsibilities in the organizational
hierarchy. Many organisations consider and use potential appraisal as a
part of the performance appraisal processes
Benefits to HR Professionals
It includes:
i) Organisation-wide quality assurance of goals and key performance indicators
(KPIs).
ii)Progress of goal/KPI setting and appraisal is monitored and managed.
iii) Monitor appraisal bias within the organisation
iv) Paper-based forms are eliminated, making process management more
efficient and secure.
v) Managers are more likely to conduct effective goal/KPI setting and
appraisal, given ease-to use:
vi) Performance management more likely to become entrenched in Potential
appraisal
Benefits to HR Professionals
• Identify the abilities of an employee in order to evaluate
whether that employee is suitable for future assignments or
otherwise, and
• Occupy higher positions in the organizational hierarchy and
undertake higher responsibilities because past performance may
not be a good indicator for future and higher role.
• Inform employees about their future roles;
• Make suitable corrections in training efforts from time to time;
• Inform employees about they must do something for their
career prospects;
Techniques of Potential Appraisal
• Technique # 1. Self-Appraisals:
• A self-appraisal form is prepared, which is required to be filled
by the employee.
• Technique # 2. Peer Appraisals:
• The HR Head may design a form for peer appraisal or ask the
peers in confidence in small size companies, to take feedback on
the employee
Techniques of Potential Performance
• Technique # 3. Superior Appraisals:
• The superiors are always required to carry out appraisal in every
setup, which may be defined annual appraisals by way of
confidential reports or any other method
• Technique # 4. MBO:
• The use of management objectives was first widely advocated in
the 1950s by the noted management theorist Peter Drucker. MBO
(management by objectives) methods of performance appraisal are
results-oriented. That is, they seek to measure employee
performance by examining the extent to which predetermined
work objectives have been met.
Techniques of Potential Performance
• Technique # 5. Psychological and Psychometric Tests:
• Employment specialists use these tests to determine if someone is a
good fit for a job. For example, personality, intelligence, and aptitude
tests can be used to capture specific preferences and skills for
required tasks and responsibilities. Those preferences are then
matched by the employer to particular job functions.
• Technique # 6. Management Games like Role Playing:
• The company can also use team building games and exercises ideas
as ice-breakers and energizers to warm up meetings, workshops,
training, and conferences. Many of these group activities are also
effective in specialized training sessions and seminars.
Techniques of Potential Performance
• Technique # 7. Leadership Exercises:
• Team coaching programs have a lot of merit; one-on-one
leadership coaching can be a very fulfilling process. Having
some insight into the life of someone who has walked a similar
path can often be encouraging management/HR Head can give
the employee, specific leadership development activities where
employees learn to lead by leading.
 Potential Appraisal Performance Appraisal

• It is a future-oriented activity. • It's both past and future-oriented activity.

• The extent up to which an individual has
• Employees abilities are evaluated to judge
attained the targets or goals set by the
if those abilities are worthwhile in future organisation forms the basis of performance
functions and work accountabilities appraisal.
• The activity of appearing potential is • Performance appraisal activity is associated
associated with competencies with the key performance areas
• There are very fewer chances of • Appraiser has the previous data related to the
examining the appraisee in newer roles by employee performance for the performance
the appraisers as there no past records appraisal.
• The time period for appraising potential is • Performance appraisal is done after a fixed
uncertain period of time
Emerging Trends in Performance Appraisal
1. Move towards Strategic Alignment

2. Automated Performance Appraisal Systems

3. Focus on Achievement System

4. Team Performance Appraisal

Personal development planning is the process of creating an action plan
for current and future based on awareness, values, reflection, goal-
setting and investment in personal development within the context of a
career, education, relationship, and self-improvement.
Objectives of Development plan
• Improve Performance in Current Job
• Sustain Performance in Current Job
• Prepare Employees for Advancement
• Enrich the Employees‘s work Experience
• Optimal Results
• Makes Performance Management Process Objectives
• Facilities Organizational Success
Developmental Activities
• On the Job Training
• Self Guided reading
• Courses
• Mentoring
• Attending a conference
• Job Rotation
• Getting a degree
• Membership in professional or trade organisation
Preparing a Personal Development Plan
• Identify Developmental Needs
• Set Goals for Meeting these needs
• Prepare action plans for Meeting the Development Needs
• Implement the plans
• Evaluate