Performance is understood as achievement of the organization in relation with its set goals.

It includes
outcomes achieved, or accomplished through contribution of individuals or teams to the organization‘s
strategic goals. The term performance encompasses economic as well as behavioral outcomes.

Performance Management

Performance management is a way of systematically managing people for innovation, goal focus,
productivity and satisfaction. It is a goal congruent winwin strategy. Its main objective is to ensure
success to all managees i.e., all task teams who believe in its process, its approach and implementation
with sincerity and commitment. The managee‘s success is reflected in organisations‘ bottom line in
terms of achieving its planned goals.

About Performance Management

Performance Management (PM) is more than the end of the year appraisal. It’s about translating
goals into results. Performance Management focuses not only on individual employees, but also
on teams, programs, processes and the organization as a whole. A well developed PM
program addresses individual and organizational performance matters necessary to properly
create and sustain a healthy and effective results-oriented culture. Public agencies have a greater
challenge to define and measure results than private sector organizations, whose results are
almost exclusively tied to financial goals. Public agencies are also required to comply with
complex regulations that govern their performance management programs. Effective PM will
help your organization raise individual performance, foster ongoing employee and supervisor
development, and increase overall organizational effectiveness.
About Strategic Planning
Strategic planning is a critical step in the management of any organization, regardless of the
level. Changing and significantly increasing demands for programs, products, and services and
greater demands for accountability and good governance are several of the many reasons public
organizations have turned to strategic planning and strategic human capital planning. Strategic
planning is a disciplined effort to produce fundamental decisions and actions that shape and
guide what an organization is, what it does, and why it does it. The Government Performance
and Results Act of 1993 (Public Law 103-62) legislated that Federal agencies should develop
year strategic plans and now, almost all Federal agencies have a strategic plan of some sort. The
Modernization Act of 2010 (Public Law 111-352) has expanded the law to require agencies also
develop annual performance plans and identify performance improvement officers. Strategic
planning should not stop with a formal plan. Creating effective and results-oriented organizations
requires linking the strategic plan and annual performance plan goals to the PM program so that
organizational outcomes are tied to individual accountability.
How OPM Can Help
Drawing on our expertise across the HR spectrum and our nationwide network of professionals,
we can assist any federal, state, county or municipal agency. OPM provides a full range of
consulting services:

 Assessment of your current performance appraisal programs and practices

 Development of performance plans aligned with organizational goals
 Writing elements and standards that include credible measures of performance
 Design of performance rating metrics that effectively differentiate levels of performance
 Identification of critical job performance elements that define results to be achieved
 Design of reward systems linked to your performance appraisal program
 Assistance implementing pay-for-performance systems
 Technology solutions to streamline the performance management processes
 Integration of performance management with your agency’s strategic planning, rewards,
succession planning, and career development programs
 Workshops to train supervisors on performance management competencies such as
setting goals, reviewing performance, and delivering feedback
 Facilitate strategic planning offsites/retreats
 Assistance identifying organizational mission, vision, values, and/or strategic goals
 Development of an organizational performance program or strategic human capital plan
to implement strategic mission and goals
 Managerial and executive coaching
 Strategic consulting on organizational effectiveness issues
 Design of a tool to standardize the rating of generic core competencies

the building blocks of great performance

management: the three common goals
Before we hit that reboot button on our performance management programs, let’s get absolutely clear on
what performance management actually is… and why we should be doing it. As diverse as organizations
are (and as diverse as their PM solutions should be) it is helpful to anchor our thinking with a basic framework.
This framework represents the universal outcomes of strong performance programs, outcomes that I’ve come
to recognize as indicators of great organizational performance. Think of these three interrelated goals as the
essence of all performance programs and the basis from which each organization’s unique differences
evolve. More simply, consider them the fundamental building blocks for the design project ahead of
you.

In my experience, every high performing organization is ultimately using its performance management program
to:

1. develop people’s skills and capabilities

2. reward all employees equitably
3. drive overall organizational performance

How these goals are prioritized or emphasized—what “good” looks like related to each goal—will differ from
organization to organization. So, too, will the way in which each organization sets about making those goals a
reality. But any high-performing organization will have some combination of these three ingredients in its
performance management recipe.

Let’s get familiar with our ingredients.

Goal #1: Develop people

It seems obvious that the development of employees should be a key outcome of any performance solution.
After all, isn’t that what performance reviews and career discussions are all about? Well, yes, they should be.
But as we discussed earlier, this objective is often the one that loses out. And things get especially muddled
when we get hung up on our rewards and ratings processes. As they say, the road to hell is paved with good
intentions.

So let’s think about what a strong performance management solution truly focused on developing people might
look like. First, it would provide in-the-moment coaching, helping individuals to understand what went well and
what could be enhanced the next time around. We all know this intuitively, but many of us are so used to
stockpiling this feedback for the annual review that we don’t do this for our employees. Further, they’d receive
suggestions to support their growth in an environment that would allow them to absorb the suggestions without
feeling threatened or having something at risk (like their pay raise).

Next, individuals would also have information at their disposal that would provide insight into what is expected
in their current role and any future roles to which they hope to advance. Resources for development might
include mentors or coaches who are their advocates within the organization. There also could be self-
assessment and training tools that would link to their development plan, providing ideas and resources to
support their unique goals.

Goal #2: Reward Equitably

First, let’s be clear on what the word really means. ‘Equitable’ is defined by the Oxford Dictionary as ‘fair and
impartial.’ It’s important to note that ‘equally’ and ‘equitably’ are not the same thing. For example, let’s say you
worked for three weeks writing a strategy for a new business unit, and your peer had proofread it and tuned it
up for you over the past few days. I’d sure hope you’d want your peer to receive some recognition for her
support, but I doubt you’d be happy if her reward and recognition was equal to yours. Instead, you’d want the
recognition to be equitable, meaning each of you would get as much credit as you’d deserve.

When organizations speak of differentiated pay and rewards, then, they are looking for those rewards to be
distributed in an equitable manner – fairly, unbiased, and consistent with the level of contribution or impact. It’s
also important to note that rewarding equitably is not just about pay. We’re talking about total rewards:
compensation, formal and informal recognition, benefits, promotions, project assignments, you name it.

From an employee’s perspective, equity is all about fairness. While extrinsic rewards are rarely a driver of
human behavior, the belief that a system is unfair or biased is a significant driver in dissatisfaction. In other
words, confidence that the system is equitable makes for happy and engaged employees. In order to achieve
that sense of fairness, you need to get a clear view of what reward equitably means to your organization and
how you can best achieve that goal in your unique environment.

Goal #3: Drive Organizational Performance

There’s been plenty of research that has demonstrated the correlation between an employee’s connectedness
to the mission and vision of his or her company and the measurable performance of that organization. We now
understand how important it is to assure that teams and individuals are fully aligned to the goals of the
company.

I’m talking about individuals and teams feeling an emotional connection to the purpose of the organization. That
means they understand the vision, they believe in it, they want to be a part of it, and they see how their work
and roles contribute to the broader goal. Remember, however, that this connection also must translate into a
framework that helps each employee make good decisions and focus on the right work, day in and day out.

Drive organizational performance might sound like it has more to do with the organization than the employee,
but it doesn’t. Sure, organizations want their teams and employees aligned, doing the right work, and not
wasting time on efforts that are off-strategy. But we have to recognize that, as humans, we also crave the
feeling of being a part of something. Most people want to feel like the work they are doing is important and
purposeful. This connectedness is a vital part of an employee’s career satisfaction and overall performance,
and considering that career satisfaction is of value to both the organization and the individual, we have to find
ways to make it sure it happens.

As I’ve said, each organization is unique, with different levels of maturity, mixtures of employee demographics,
and diverse cultures and values. You will — and should — interpret and emphasize the Three Common Goals
in the way that makes the most sense for you and your strategic goals. But make sure you think long and hard
about each as you’re building your new solution. Ignore these important building blocks at your peril!

PERFORMANCE MANAGEMENT SYSTEM – OBJECTIVES, COMPONENTS AND

BENEFITS
In the current day and age, the role of HR has evolved and developed to new levels . the focus of HR now is largely on the development
of functional strategies to help in corporate strategy implementation. HR works in tandem with corporate strategies for optimum results,
to improve employee performance, to create a harmonious work environment and to involve employees in decision making and planning
for the corporate. It is the role of HR to provide these opportunities and hence it has climbed a notch higher from being just an passive
participant to an enabler and facilitator. Performance management system in HR is a key component to increase employee motivation
and drive high performance.

What is a Performance Management System?

Performance management systems set in line an organized and systematic way of progress review, goal setting, communication,
recognizing and rewarding achievement, providing feedback for better performance and implementing employee development programs.
It is a continuous process, which is carried out right from the time when an employee joins an organization till the time he or she leaves .
Performance management in HR is aimed at improving the overall corporate performance by enhancing individual performance within
the framework of a team. It pushes for optimum performance by setting the right expectations, communicating effectively, defining clear
roles, and setting achievable objectives.

Working of Corporate Performance Management

The following actions are included in corporate performance management systems:

 Development of precise job descriptions and creating detailed employee performance plans inclusive of their performance
indicators and key result areas (KRA).
 Setting up a strong selection process in lines with the company policies so that the right candidates are selected for the job.
 Discussing and setting performance standards to measure productivity and output set against benchmarks that have been
predefined.
 Giving the employee feedback and coaching on a continuous basis right through his performance delivery period.
 Catering to development and training needs by measuring productivity and performance quality.
 Having discussions on the employees’ quarterly performance and evaluating them based on the performance plan.
 Developing and implementing a set rewarding and compensation system for employees who exceed performance benchmarks
or those who excel in their jobs based on their performance plans.
 Facilitating guidance sessions, career development support and promotional discussions for employees on a regular basis.
  Holding comprehensive exit interviews to find out the reasons for an employee’s discontentment with the company and the
reason for his or her departure.

Components of an Effective Performance Management System

Performance planning: This is the basis of performance appraisals and it is a crucial component of a corporate performance
management system. Both the appraiser and the reviewee carry out performance planning at the start of a work session. KRA’s and
performance budgets are decided after mutual agreements between the employee and reporting officer.

Performance appraisal and reviewing: Organizations usually have mid-year and annual reviews in which the employees’ performance
is reviewed; based on achievements and fulfillment of his goals as well as overall performance, he/she is appraised. The process
combines both self-review as well as a review by the reporting officer. Measurable and quantifiable achievements are rated and causes
for loopholes are detected and analyzed.

Performance feedback and personal counseling: This is a very important step in which the appraiser and employee sit in discussion.
The appraiser talks to the employee about areas of improvement and about his levels of contribution, expected performance achievement,
etc. Along with transparent feedback, the need for training and development is also identified. The appraiser needs to adopt necessary
measures to ensure that the employee meets the company’s expectation levels and that he improves overall performance.

Rewarding good performance: The motivation of an employee is determined when his good performance is recognized and rewarded.
It could directly influence the self-esteem of a person. It is very sensitive in propelling his achievement orientation too. When an
organization recognizes an employee’s contribution and rewards him for it, he strives to do be better because of the motivation.

Performance improvement planning: This calls for setting of new goals and deadlines for employees. Key areas of improvement are
made aware to the employee and he is also assigned a stipulated deadline for the same. He must show improvement within the jointly
finalized and mutually accepted time-frame.
Potential Appraisal: The employee’s lateral and vertical movement is influenced by this factor. Competency mapping and assessment
techniques need to be carried out for successful appraisal. This needs to include crucial points such as job rotation and succession
planning.

Key benefits of Performance Management Systems

In short, successful implementation of corporate performance management systems can result in overall benefit of the organization, the
manager and the employee.

Organization

 It improves overall performance of the organization and increases employee loyalty and retention.
 It improves productivity of the company and also delivers cost advantages.
 It sets clear accountabilities and overcomes communication barriers in the organization.

Manager

 It saves on a lot of precious time and reduces conflicts within the team or department
 It increases efficiency levels of team members and motivates better, consistent high performance.

Employee

 It clarifies all the expectations of an employee including his exact role and KRA
 It gives him an opportunity for self review, assessment and introspection
 It directly contributes to enhanced performance and better productivity levels.
 Career paths are defined and it promotes job satisfaction and a positive mindset.

PERFORMANCE MANAGEMENT PROCESS

Performance management process - Quick Guide

Performance management process is a systematic process of managing and monitoring the

employee’s performance against their key performance parameters or goals. It is regarded as a
process for driving the individual and organizational performance management.
Preliminary, the process involved six steps which followed one after the. In short, it is termed as
continuous process in organization.

Stage 1: Pre- Requisitesal

then organization loose its objectivity . Therefore, it is necessitate defining the purpose Cleary
for existing and new employees/ staff, departments in order to make integrate all teams to meet
company’s target. There are three primary stages where the company defines their long term
and short term goals. The first stage is at the organization level, where the management
describes the holistic view and defines overall objective of formulation of the company, what are
their long term vision, what are the values on which they stands for, and what is the mission the
company is chasing. The second stage perquisites at department level, where the management
assign targets to each department to achieve overall organization objective. At this stage, the
management strategize the processes and allocate targets to each department.
The last stage is individual level, where the department further give targets to employees.
The above three stages are the foundation of performance management system of any
organization. Basis on these three levels, the management design, strategize and develop the
performance management system. It describes job descriptions, job specification, and job
design at each level and delegate targets to perform in order to achieve organization objective.

Stage 2: Performance Planning

There are three important attributes of performance planning:

i. Results
ii. Behaviours, &
iii. Development Plan

Results: the yardstick of performance management is used to measure employees and

department performance. It provides the information about the performance gaps and
achievements. Hence, it evaluates how well the individual employee has performance against
his assign targets

Behaviour: measuring the employees behaviours are one of the most challenging and difficult
task basis on performance standards. The human behaviour can only be measured through
observation and close monitoring by his supervisors or human resources department.
It is difficult to qualify the behaviour against his performance standards. There are lot of
subjectivity involved in this category. However, there are lot of phycomateric tools which
supports to define and indicate individual behaviour and attitude, but research has proven that
they are only indicators and not provide absolute answer and authenticate results. Hence, we
can define the expected behaviour in employee’s performance standards during the
performance planning and its measurement but cannot quantify it with data.

Development plan: development plan is the third stage of performance planning. At this
stage, we develop the plans to improve employees knowledge, skill and attitude (K, S, A). It
allows employee to take his professional standards to next level which the support of
development tools and plans

Stage 3: Performance Execution

Performance execution is considered as most important stage because the whole exercise of
creating performance management systems and building up standards would rely on it. The
primary responsibility and ownership of performance execution is with employee, which is
followed by department and then organization. Hence, it is considered as a chain or process, in
which the performance of individual employees would result department performance.
Therefore, the role and responsibility of supervisor or manager also increases which comprises
with following focus areas: Provide resources , tools and equipment’s to employees to make out
better results Provide regular feedback to subordinate about their performances and
improvement areas Motivate team members through different channels and tools Integrate
individual development plans with department’s goal Remain focus on development activities to
enhance individual knowledge and skills.
Stage 4: Performance Assessment

Performance assessment is the next stage followed by performance execution. In this phase,
the employee and manager both are responsible to measure and assess the performance of
employee against his targets. The process should comprise to the extent of individual targets,
behaviours or attitude and special achievements during the performance appraisal cycle.

Stage 5: Performance Review

The performance review stage is a platform where the subordinate and superior exchange
performance feedbacks and review performances against given targets or goals to individual.
To make the performance review successful, the involvement and exchange of dialogue are
equally essential between employee and his manager. Apart from performance review, they
also discuss about the development plans, trainings to improve skills and knowledge, next year
goals and targets and expectations of employee and manager both. Hence, this stage is
considered the base of next yearperformance appraisal cycle as well.

Stage 6: Performance Renewal and Reconstructing

The performance management process is an ongoing continuous process. Once the

performance has been reviewed and end, then the cycle starts for the next performance
appraisal. It should be again align with next year organization mission, goals and objective and
integrated with departments goals In facts, it is a process which starts all over again which
needs to be discuss, design, develop , executed and review again. This is necessitate because
the external environment of company like market, customers , competitors , suppliers etc. also
revolved and all subsequent changes has to prerequisites for performance planning and
setting with strategic objectives of organization.