PMS-CHP 2
PMS-CHP 2
Chapter 2
Performance management is the systematic process by which the Department of HR involves its
employees, as individuals and members of a group, in improving organizational effectiveness in
the accomplishment of agency mission and goals.
These goals are generally set both by the manager and their direct reports. Discussing and setting
goals together helps managers and their employees gain a better understanding of their current
performance and their future performance abilities.
Ongoing Communication
It is always good to follow up on what your direct reports are working on and how they are
managing to meet their goals. This keeps them motivated and as a manager, you can help them
improve themselves by giving them suggestions about their work, without having to wait till the
next performance review.
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Performance Review
This is the part where managers give their reviews about the performance of their direct reports.
These reviews are generally annual or quarterly. The general procedure of reviews is that the
employees are first allowed to rate themselves which counts as self-evaluation and the report is
sent to the manager. An important aspect of performance reviews that has changed recently is,
peer-evaluation: 360- degree feedback. 360 feedback and peer evaluations allow employees to
evaluate their managers and help them understand where they can improve themselves and how.
The process of rating one’s manager can be complicated but once it becomes a practice, the
overall team productivity increases.
Once the manager has evaluated the performance of their employees, they cannot just end the
review with either ‘Good work’ or ‘Needs improvement’. Giving proper feedback and
suggestions to improve performance is the next important component of a performance
management system. This component allows you to tell your employees exactly where they need
to improve and how to make it possible. Studies state that employees who receive frequent
feedback and proper suggestions to improve their performance are more likely to contribute to
the organizational success that their counterparts.
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Objectives of Performance Management
According to Lockett (1992), performance management aims at developing individuals with the
required commitment and competencies for working towards the shared meaningful objectives
within an organizational framework.
Performance management frameworks are designed with the objective of improving both
individual and organizational performance by identifying performance requirements, providing
regular feedback and assisting the employees in their career development.
Performance management aims at building a high performance culture for both the individuals
and the teams so that they jointly take the responsibility of improving the business processes on a
continuous basis and at the same time raise the competence bar by upgrading their own skills
within a leadership framework. Its focus is on enabling goal clarity for making people do the
right things in the right time. It may be said that the main objective of a performance
management system is to achieve the capacity of the employees to the full potential in favor of
both the employee and the organization, by defining the expectations in terms of roles,
responsibilities and accountabilities, required competencies and the expected behaviors.
The main goal of performance management is to ensure that the organization as a system and its
subsystems work together in an integrated fashion for accomplishing optimum results or
outcomes.
Concerned with the output (the results achieved), outcomes, processes required for
reaching the results and also the inputs (knowledge, skills and attitudes).
Concerned with measurement of results and review of progress in the achievement of set
targets.
Concerned with defining business plans in advance for shaping a successful future.
Striving for continuous improvement and continuous development by creating a learning
culture and an open system.
Concerned with establishing a culture of trust and mutual understanding that fosters free
flow of communication at all levels in matters such as clarification of expectations and
sharing of information on the core values of an organization which binds the team
together.
Concerned with the provision of procedural fairness and transparency in the process of
decision making.
The performance management approach has become an indispensable tool in the hands of the
corporates as it ensures that the people uphold the corporate values and tread in the path of
accomplishment of the ultimate corporate vision and mission. It is a forward looking process as
it involves both the supervisor and also the employee in a process of joint planning and goal
setting in the beginning of the year.
Improving Productivity
Productivity represents the measure of output increase over the amount of input. Management
must develop all team members in order to reach ever-increasing productivity goals. This
practice is much more cost efficient than firing and hiring new employees. The evaluation
process ensures that employees understand the components of given tasks and perform them
correctly in the specified amount of time.
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Employees receive periodic feedback on what is expected and how their work compares.
Management motivates team members to achieve completion in a timely manner, thus
accomplishing improvements in productivity overall. Most companies utilize the performance
management system annually for the purpose of determining annual raises. Those who perform
best or show the most improvement earn a raise, while others receive directions for
improvement.
Employee Growth
All employees develop strong skills in different areas and need encouragement or incentives
from business management to inspire growth. Periodic performance evaluations are a way to
ensure each team member receives the right amount of training and coaching in the needed areas
and to help decide when rewards such as raises are in order.
The management team leader will review all personal goals with individual team members and
evaluate what areas need improvement. This allows each employee a clear and specific time line
for focusing on improvement with guidelines for what is acceptable.
Time Management
Management savvy of the current capabilities of a staff best delegates tasks for optimum
productivity results. Knowledge of the weaknesses and strengths of team members is imperative
when working against tight deadlines or attempting to beat new goals by simply appointing the
right employee for every task. Delegating efficiently ensures tasks are completed as quickly as
possible and as accurately as possible. This strategy saves time without compromising quality.
Evaluating performance also makes it easier to accurately define the length of time a particular
task should take from start to finish. Once managers have decided upon the necessary time span
for each task, scheduling flows more smoothly.
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Key Features Of An Ideal Performance Management System
Employee performance management is one of the most important management tools that
influence employee growth and organizational development significantly.
Most organizations use performance management systems suitable to them based on factors
like the industry, the number of employees etc.
Is there an ideal performance management model, suitable for any kind of organization? Yes,
there are a few common characteristics of performance management suitable to organizations of
any industry. These features significantly improve the quality of the performance management
process.
Here’s the list of the key components of an ideal employee performance management system.
Performance Planning - Setting Clear Goals and Objectives : Setting proper goals for
employees is one of the initial steps that leads to increased employee productivity as well as
organizational productivity. It is important to define performance plans and objectives clearly.
Having plans that are open ended and unclear, creates a lack of interest in employees. At the
beginning of the year or at the beginning of the quarter, managers meet with their employees and
set clear goals and objectives for them. In this phase, managers plan on ‘how’ their employees
should fulfill their goals and accomplish results. These goals should be SMART and challenging.
It is to note that in this phase managers align employee goals with organizational goals.
The appraisals are normally performed twice in a year in an organization in the form of mid
reviews and annual reviews which is held in the end of the financial year. In this process, the
appraisee first offers the self filled up ratings in the self appraisal form and also describes his/her
achievements over a period of time in quantifiable terms. After the self appraisal, the final
ratings are provided by the appraiser for the quantifiable and measurable achievements of the
employee being appraised. The entire process of review seeks an active participation of both the
employee and the appraiser for analyzing the causes of loopholes in the performance and how it
can be overcome. This has been discussed in the performance feedback section.
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Feedback on the Performance followed by personal counseling and performance
facilitation: Feedback and counseling is given a lot of importance in the performance
management process. This is the stage in which the employee acquires awareness from the
appraiser about the areas of improvements and also information on whether the employee is
contributing the expected levels of performance or not. The employee receives an open and a
very transparent feedback and along with this the training and development needs of the
employee is also identified. The appraiser adopts all the possible steps to ensure that the
employee meets the expected outcomes for an organization through effective personal
counseling and guidance, mentoring and representing the employee in training programmes
which develop the competencies and improve the overall productivity.
Rewarding good performance: This is a very vital component as it will determine the work
motivation of an employee. During this stage, an employee is publicly recognized for good
performance and is rewarded. This stage is very sensitive for an employee as this may have a
direct influence on the self esteem and achievement orientation. Any contributions duly
recognized by an organization helps an employee in coping up with the failures successfully and
satisfies the need for affection.
Performance Improvement Plans: In this stage, fresh set of goals are established for an
employee and new deadline is provided for accomplishing those objectives. The employee is
clearly communicated about the areas in which the employee is expected to improve and a
stipulated deadline is also assigned within which the employee must show this improvement.
This plan is jointly developed by the appraisee and the appraiser and is mutually approved.
Potential Appraisal: Potential appraisal forms a basis for both lateral and vertical movement of
employees. By implementing competency mapping and various assessment techniques, potential
appraisal is performed. Potential appraisal provides crucial inputs for succession planning and
job rotation.
Every performance management system helps to improve the effectiveness of talent management
in an organization by monitoring and improving the performance of the employees, by engaging
them with continuous feedback, appreciation and rewards program. The performance
management includes ensuring organizational buy-in of the employees, creating an open
feedback culture and providing development opportunities to the employees.
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Goal-setting and management
Goals management is an integral part of an effective performance management system. Goals are
important because they challenge the employees and motivate them to perform better. Setting
goals would mean providing direction, priority and time frame for an employee to achieve the
objectives. Based on the business models, goals are set by the employees and approved by the
managers or set by the managers. However, the key factor is goals must be aligned with the
organization’s objectives. In general, organization set goals that are challenging yet attainable.
Clearly defined goals make employees understand what is expected of them and proceed with
clarity.
Performance Appraisals
Performance appraisals are the heart of the employee performance management system.
Feedback questionnaires are created for employees based on their goals and competencies. Self-
feedback, manager feedback and ratings are sought during the appraisal cycle. Performance
manager software automates the appraisal cycle. The automated reminders and notifications in
the software help reduce the manual follow-up efforts of HR to make the employees and
managers to complete the feedback process. It also helps to drastically reduce the appraisal
duration.
One - on- one appraisal meeting summary is captured in the system and final ratings and
recommendations are published for the employees. These ratings are then used to decide
compensation revisions. From creating appraisal feedback forms and workflows to appraisal
letter distribution the software helps to automate the entire performance appraisal process.
An ideal performance management system does not only stimulate feedback from the manager
but considers an overarching perspective of everyone who is involved in the business. This could
be the employee, or his colleagues and external stakeholders. So how do we bring in a system
where everyone is involved in the feedback process?
One way of doing this is by creating a survey or a rating mechanism where the employee can do
a self-evaluation, the colleagues can rate him, then the managers, customers, vendors, and HR
can give their feedback. This gives an overall perspective on the employee’s performance. You
can even make this creative by adding emoticons in the rating section.
With a 360-degree review mechanism, there is an upward feature through which employees can
give anonymous feedback to their managers. The managers will then be able to know how
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capable they are in terms of their leadership skills and team management. Through this,
employees can identify the perception gaps between the managers and the employees.
Employee engagement
One way of doing this is to have a software, that creates employee engagement surveys. The
survey can have various questions that measure employee engagement either qualitatively or
quantitatively. An example of a qualitative survey question could be, “How well are you being
able to contribute to the goals of the organization?” a quantitative question, on the other hand,
would either use a rating scale or yes or no questions.
From the beginning, we have been emphasizing one thing that is very significant for a successful
performance management system. It is a feedback mechanism that is continuous. When you have
a continuous feedback mechanism in your performance management system, all the other
processes will become easier. In one way, you could say that the continuous feedback
mechanism is a backbone to any performance management system. When you have a
continuous feedback mechanism in your performance management system, you could have
something like a wall or a portal, that could serve as a platform for employees and managers to
post their comments and feedback for employee performance. In a way, this digital wall could
become an employee performance evaluation tool. In a performance management system,
continuous feedback promotes healthy collaboration between all the employees and the
managers. The feedback that is provided is accurate and timely. This process is a lot more
convenient than those excel sheets that you send every year.You can even have a facility in
which you can send confidential comments to the employees by having a mobile app.
Performance Analytics
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because it helps managers understand the various trends in employee performance.
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Competency-based performance management system
For high-performing organizations, a competency-based performance management system is an
essential part of an overall competency management plan. With a competency-based
performance management system in place, you can better motivate staff, align training with
company goals, clearly define roles and the skills needed to perform each job well, as well as
optimize the hiring process. Here are seven key components to optimizing your competency-
based performance management plan.
1. Determine Goals
When it comes to performance management, determining goals should be step one. Having set
goals at all levels allows everyone involved to have something to strive toward, measure and be
accountable for. By planning out specific goals and setting expectations, you will motivate
employees to work effectively, help management to communicate clearly and allow tasks to be
completed in an efficient manner.
Whether you’re setting goals individually or at a team level, make sure they’re geared towards
developing the core competencies of the company and supporting your organization’s mission,
vision and values.
2. Communication
Why. Make sure the purpose is communicated clearly, and often. If employees don’t see the
point, they may not do their best to progress toward your goals.
What and When. It’s also important to set clear expectations. If you’re planning on setting
deadlines for individuals or teams to complete training or to give feedback, let staff know that
you’re expecting them to complete the activity at that time and it’s not just a suggestion.
How. Give staff clear steps toward any goals you have set. With a step-by-step guide, the
process will be as effortless and possible.
One great benefit of performance management is that the feedback gives HR better clarity when
recruiting, which saves time and resources. This is why it’s so important to clearly define each
job.
Great employees want to excel in their positions–and understand what is needed to move up.
Make it easier for them by outlining what skills are needed to perform to the best of their ability.
By understanding job responsibilities and expectations, employees can be more confident in their
position, as well as their future, within the company.
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In addition to your current employees, it’s also important to plan for the subsequent workforce.
With your organization’s core competencies in mind, define what job types you would like to
hire for in the future. Complete the communication loop by speaking with HR about these
decisions. This will help you hire the most competent people to fulfill needs within your
company.
Once you agree upon and outline the skills needed for each job type, you can better understand
where skill gaps exist. Whether it’s through surveys, interviews, performance reviews, or
coaching sessions, learning what your employees need to know in order to perform well in their
position is invaluable.
Additionally, by identifying skill gaps you can begin to see a clearer picture of where there may
be job-type holes in your workforce. There may be job types that you’ve never hired for
previously that would be the perfect addition to your team.
After you’re able to identify your skill gaps, the next step is to nurture staff and bring them up-
to-speed. Whether it’s by way of company-wide training days or simply management-to-team
member weekly one-on-ones, the best way to encourage continued learning is by setting up a
coaching development program.
With a coaching and development plan, your organization can accomplish multiple goals:
bridging skill gaps, vetting employees for future positions and putting them on track for a
planned career trajectory.
Three key elements of all successful evaluation programs are monitoring, documenting and
assessments.
While some feel that conventional, annual assessments are tiresome, anxiety-inducing and many
times, fruitless, it’s still important to have some kind of progress touchpoint in order to set up
your workforce for success. Move away from monthly or annual evaluations and toward a
process of continuous coaching and improvement. With actionable, constructive criticism, you
can position your workforce to perform to the best of their ability.
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For some organizations, creating a unique performance management system is in order.
Depending on your organization, a performance management program may mean you’ll have
frequent face-to-face evaluations or it could mean virtually zero. The more organized and
planned out your program is, the less face time will be required. We’re experts at mapping out
successful competency-based performance management plans. For more information on
developing a customized performance management plan, contact us.
With the data you gather through defining job types, evaluating skill gaps and the results of
continued learning activities, you can put together the evaluation program that works for your
company.
With feedback from management and staff, it’s important to regularly revise your performance
management plan. Be sure to:
Tie all activities back to reaching company goals and company core competencies,
Listen to management and staff feedback and make changes to the plan accordingly,
Motivate staff by putting an emphasis on career trajectory,
Give recognition and reward your workforce.
The most comprehensive performance management plan in the world won’t be effective if
everyone involved doesn’t have adequate access, can’t easily give feedback, and data can’t be
collected and viewed by leadership. In order to keep everything organized across the
organization, performance management software is a must.
While creating a competency-based performance management plan can sometimes feel like a
balancing act, performance management software can help keep you organized and on track to
meet your goals. Not only does performance management software help to identify, analyze and
manage skills gaps within your workforce, it provides an overview of progress, an opportunity to
compare continued learning techniques and the ability for leadership to analyze a large amount
of data in a comprehensive way.
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Performance Management System Checklist for Manager
Performance appraisals, performance reviews, appraisal forms, whatever you want to call them,
let's call them gone. As a stand-alone, annual assault, a performance appraisal is universally
disliked and avoided.
After all, how many people in your organization want to hear that they were less than perfect last
year? How many managers want to face the arguments and diminished morale that can result
from the performance appraisal process?
How many supervisors feel that their time is well-spent professionally to document and provide
proof to support their feedback—all year long? Plus, the most important outputs for the
performance appraisal, from each person's job, may not be defined or measurable in your current
work system. Make the appraisal system one step harder to manage and tie the employee's salary
increase to their numeric rating.
If the true goal of the performance appraisal is employee development and organizational
improvement, consider moving to a performance management system. Place the focus on what
you really want to create in your organization—employee performance management and
employee performance development.
As part of that system, you will want to use this checklist to guide your participation in the
performance management and development process. You can also use this checklist to help you
in a more traditional performance appraisal process. The checklist provides the steps you need to
succeed in any performance management system.
If you follow this checklist, you will offer a performance management and development system
that will significantly improve the appraisal process that you currently manage. Staff will feel
better about participating, discussing their contributions, and taking a look at ways to improve
their performance. The performance management system may even positively affect
performance—and that's your goal. Right?
Much work is invested, on the front end, to improve a traditional employee appraisal process. In
fact, managers can feel as if the new process is too time-consuming.
Once the foundation of developmental goals is in place, however, time to administer the system
decreases a lot. Each of these steps is taken with the participation and cooperation of the
employee, for the best results.
Schedule the Performance Development Planning (PDP) meeting and define pre-work
with the staff member to develop the performance development plan (PDP).
The staff member reviews personal performance, documents self-assessment comments
and gathers needed documentation, including 360-degree feedback results, when
available.
The supervisor prepares for the PDP meeting by collecting data including work records,
reports, and input from others familiar with the staff person’s work.
Both examine how the employee is performing against all criteria, and think about areas
for potential development.
Develop a plan for the PDP meeting which includes answers to all of the questions on the
performance development tool with examples, documentation and so on.
Establish a comfortable, private setting and rapport with the staff person.
Discuss and agree upon the objective of the meeting, to create a performance
development plan.
The staff member discusses the achievements and progress he has accomplished during
the quarter.
The staff member identifies ways in which he would like to further develop his
professional performance, including training, assignments, new challenges and so on.
The supervisor discusses performance for the quarter and suggests ways in which the
staff member might further develop his performance.
Add the supervisor's thoughts to the employee's selected areas of development and
improvement.
Discuss areas of agreement and disagreement, and reach consensus.
Examine job responsibilities for the coming quarter and in general.
Agree upon standards for performance for the key job responsibilities.
Set goals for the quarter.
Discuss how the goals support the accomplishment of the organization's business plan,
the department's objectives and so on.
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Agree upon a measurement for each goal.
Assuming performance is satisfactory, establish a development plan with the staff person,
that helps him grow professionally in ways important to him.
If performance is less than satisfactory, develop a written performance improvement
plan, and schedule more frequent feedback meetings. Remind the employee of the
consequences connected with continued poor performance.
The supervisor and employee discuss employee feedback and constructive suggestions
for the supervisor and the department.
Discuss anything else the supervisor or employee would like to discuss, hopefully,
maintaining the positive and constructive environment established thus far, during the
meeting.
Mutually sign the performance development tool to indicate the discussion has taken
place.
End the meeting in a positive and supportive manner. The supervisor expresses
confidence that the employee can accomplish the plan and that the supervisor is available
for support and assistance.
Set a time-frame for a formal follow-up, generally quarterly.
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Electronic Pperformance Management System
E-performance management is the planning, implementation, and application of
information technology in managing the PMS. E-performance management is a part
ofe-HRM or HR information system (HRIS) (Al-Raisi, Amin & Tahir, 2011). E-
Performance Management is a web-based tool, has been designed to make
performance reviews easier in organizations (Ravisha&Pakkeerappa, 2013).
Through IT enabled performance management systems (PMS), it is possible to
integrate strategies, policies, and practices of the organization with the performance
management process (Bhattacharyya, 2017). This enables for faster measurements
of indicators of performance and, therefore, leads to efficiency in the performance
appraisal process and provides permanent records which are transparent leading to
a motivated workforce and therefore increasing the performance of the employee.
This will provide accurate estimation of productivity which will help to establish
promotion plans and compensation programs.
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Electronic Performance support system (EPSS)
An electronic performance support system (EPSS) is any computer software program or
component that improves user performance.
EPSSs can help an organization to reduce the cost of training staff while increasing productivity
and performance. They can empower employees to perform tasks with a minimum amount of
external intervention or training. By using this type of system an employee, especially a new
employee, will often not only be able to complete his or her work more quickly and accurately,
but, as a secondary benefit, will also learn more about the job and the employer's business.
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