Unit1

LearningOutcomes•  Explaintheconceptofperformancemanagement•  Dis6nguishbetweenperformancemanagementandperformanceappraisal

•  Illustratebymeansofadiagramtheperformancemanagementprocess

•  Outlinetheaimandroleofperformancemanagementintheorganisa6on

•  Explainthecontribu6onsaperformancemanagementsystemcanmakeinthe

organisa6on

Learningoutcome1Explaintheconceptofperformancemanagement

PerformanceManagementcanbedefinedas:“A con2nuous process of iden2fying, measuring & developing the performance ofindividuals&teams,&aligningperformancewiththestrategicgoalsoftheorganisa2on”Thisdefini6onisthuscomposedof2maincomponents:•  Con2nuousProcess:ItinvolvesaneverendingprocessofseGnggoalsandobjec6ves,observingperformanceandreceivingongoingcoachingandfeedback. Oncetheendoftheprocessisreacheditstartsalloveragain.•  AlignmentwithStrategicgoals:Requiresmanagers toensure thatemployees’ac6vi6esandoutputarecongruentwiththe organisa6on’s goals and consequently help the organisa6on gain compe66veadvantage.Createsadirectlinkbetweenemployeeperformanceandorganisa6onalgoalsand makes the employee’s contribu6on to the organisa6on explicit. Performancemanagement systems that do not make explicit the employee’s contribu6on to theorganisa6onalgoalsarenottrueperformancemanagementsystems.

PerformanceManagementischaracterized

withthefollowingquali6es:

Performancemanagementisanongoingprocess

Organisa6onalgoalsshouldbelinkedwithindividuals’goals

Performanceshouldbemonitoredandreviewed,and

feedbackprovided

Employeedevelopmentiscrucialtoensure

improvementinemployeeperformance

Learningoutcome1Explaintheconceptofperformancemanagement

ThePerformanceManagementProcessincludesthefollowingsteps

Prerequisites

PerformancePlanning

PerformanceExecu6on

PerformanceAssessment

PerformanceReview

PerformanceRenewalandRe‐contrac6ng

Learningoutcome1Explaintheconceptofperformancemanagement

Performancemanagementisaforward‐lookingprocess,takingfrequentmeasuresasworkoccursandrespondingtosmallstepsforward,whileperformanceappraisalisabackward‐lookingprocessofperformance,measuringwhathappenedinthepast.

•  Performanceappraisalreferstoasystemthatinvolvesemployeeevalua6ononceayearwithoutanyefforttoprovidefeedbackandcoachingsothatperformancecanbeimproved.

•  Itisasystema6cdescrip6onofanemployee’sstrengthsandweaknesses.•  Performancemanagementismorethanjustevalua6ngemployeeperformance.•  Performancemanagementisanongoingprocessratherthanaone‐offeventtaking

place,forinstance,annuallyorbiannually.Itisacomprehensive,con6nuousandflexibleapproachtothemanagementoforganisa6ons,teamsandindividualswhichinvolvethemaximumamountofdialoguebetweenthoseconcerned.

ComparisonsbetweenPerformanceManagementandPerformanceAppraisalsystem:

Learningoutcome2

Dis6nguishbetweenperformancemanagementandperformanceappraisal

Comparison

sbetweenPe

rformanceM

anagem

enta

ndPerform

anceApp

raisa

lsystem:

Learningoutcome2

Dis6nguishbetweenpe

rformancem

anagem

enta

ndperform

anceapp

raisa

l

Learningoutcome3

Illustratebymeansofadiagramtheperformancemanagementprocess

5 - Performance Review

6 - Performance Renewal

& recontracting

Meeting to review assessment (appraisal), employee

received feedback on performance

Final stage and identical to Performance Planning

(Stage 1)

Employee strives to produce the results and display

the behaiviour agreed upon and to work on the

developmental needs

Both employee and manager evaluate the extent oto

which the desired behaiviour, development plan &

results have been displayed and achieved

3 - Performance

Execution

4 - Performance

Assessment

1 - Prerequisites

2 - Performance Planning

Knowledge of org's mission & strategic goals

Knowledge of the job in question

Meeting between supervisor and employee at the

beginning of PM cycle to discuss & agree process and

what needs to be done & how + results & behaviours

and developmental plan

Learningoutcome4

Outlinetheaimandroleofperformancemanagementintheorganisa6on

PerformanceManagementismostfrequentlyusedfor:

SalaryAdministra6on

PerformanceFeedback

Iden6fica6onofEmployeesStrengthsandWeaknesses

Learningoutcome4

Outlinetheaimandroleofperformancemanagementintheorganisa6on

PerformanceManagementcanservethefollowing6purposes:

StrategicPurpose

Administra2vePurpose

Informa2onalPurpose

DevelopmentalPurpose

Organisa2onalMaintenance

Purpose

Documenta2onalpurpose

Learningoutcome4

Outlinetheaimandroleofperformancemanagementintheorganisa6on

PerformanceManagementcanservethefollowing6purposes:

StrategicPurpose:• Thefirstpurposeoftheperformancemanagementsystemistohelptopmanagementachievestrategicbusinessobjec6ves.Bylinkingtheorganisa6onalgoalswithindividualgoals,theperformancemanagementsystemreinforcesbehaviourconsistentwiththea\ainmentoforganisa6onalgoals.Moreover,evenifforsomereasonindividualgoalsarenotachieved,linkingindividualgoalswithorganisa6onalgoalsservesasawaytocommunicatewhatthemostcrucialbusinessstrategicini6a6vesare.

Administra2vePurpose:• Asecondfunc6onoftheperformancemanagementsystemistofurnishvalidandusefulinforma6onformakingadministra6vedecisionsaboutemployees.Theseadministra6vedecisionsincludesalaryadjustments,promo6ons,employeereten6onortermina6onofservice,recogni6onofsuperiorindividualperformance,iden6fica6onofpoorperformers,layoffsandmeritincreases.Therefore,theimplementa6onofrewardsystemsbasedoninforma6onprovidedbytheperformancemanagementsystemfallswithintheadministra6vepurpose.

Informa2onalPurpose:• Performancemanagementservesasanimportantcommunica6ondevice.First,itinformsemployeesabouthowtheyaredoingandprovidesthemwithinforma6ononspecificareaswheretheymayneedimprovement.Secondly,relatedtothestrategicpurpose,itprovidesinforma6onontheorganisa6on’sandsupervisor’sexpecta6onsandwhataspectsofworkthesupervisorbelievesaremostimportant.

DevelopmentalPurpose:• Managerscanuseinforma6ongatheredduringtheperformancemanagementsystem,feedbackspecifically,tocoachemployeesandimproveperformanceonanongoingbasis.Thisfeedbackallowsfortheiden6fica6onofstrengthsandweaknessesaswellasthecausesforperformancedeficiencies(whichcouldbeduetoindividual,group,orcontextualfactors)

Organisa2onalMaintenancePurpose:• ThePMSprovidesinfotobeusedinworkforceplanning(setofsystemsthatalloworganisa6onstoan6cipate&respondtoneedsemergingwithinandoutsidetheorganisa6on,todeterminepriori6esandtoallocateHRmosteffec6vely).Importantcomponentofanyworkforceplanningeffortistalentinventory,infooncurrentresources(egskills,abili6es,promo6onalpoten6alandassignmenthistoryofcurrentemployees).PMSPrimarymeansthroughwhichaccuratetalentinventoriescanbeassembled,Assessingfuturetrainingneeds,evalua6ngperformanceachievementsatorganisa6onallevel&evalua6ngeffec6venessofHRinterven6ons(egwhetheremployeesperformathigherlevelsaaerpar6cipa6nginatrainingprogramme).Bymanagingperformancetheorganisa6oncantrackdownthetalentithasandtheonesits6llhastosearchfor.Reten6oninthemean6me.

Documenta2onalpurpose:• Finally,performancemanagementsystemsalloworganisa6onstocollectusefulinforma6onthatcanbeusedforseveraldocumenta6onpurposes.Firstly,performancedatacanbeusedtovalidatenewlyproposedselec6oninstruments.Forexample,anewlydevelopedtestofcomputerliteracycanbeadministeredtoalladministra6vepersonnel.Scoresonthetestcanbepairedwithscorescollectedthroughtheperformancemanagementsystem.Ifscoresonthetestandontheperformancemeasurearecorrelated,thetestcanbeusedwithfutureapplicantsfortheadministra6veposi6ons.Secondly,theperformancemanagementsystemallowsforthedocumenta6onofimportantadministra6vedecisions.Thisinforma6oncanbeespeciallyusefulincourtcases.Thisdocumentwillalsoassistorganisa6onsinapplyingconsistencytoitsdecisionmaking.

Learningoutcome5

Explainthecontribu6onsaperformancemanagementsystemcanmakeintheorganisa6on

Theadvantagesassociatedwiththeimplementa2onofaPerformanceManagementsystemareasfollows:

Mo2va2ontoperformisincreased: Self‐esteemisraised Managersgaininsight

intosubordinates

Self‐insightanddevelopmentare

enhanced

Administra2veac2onsaremorefairand

appropriateOrganisa2onalgoals

aremadeclearEmployeesbecomemorecompetent

AnThereisbeMerprotec2onfromcourt

cases

BeMerand2melierdifferen2a2on

betweengoodandpoorPerformers

Manager’sviewofperformanceis

communicatedmoreclearly

Organisa2onalchangeisfacilitated

Mo2va2on,commitmentand

inten2ontostayintheorganisa2onare

enhanced

Learningoutcome5

Explainthecontribu6onsaperformancemanagementsystemcanmakeintheorganisa6on

Theadvantagesassociatedwiththeimplementa2onofaPerformanceManagementsystemareasfollows:

• Receivingfeedbackaboutyourperformanceincreasesmo6va6onforfutureperformance.Knowledgeabouthowyouaredoingandrecogni6onaboutyourpastsuccessesprovidesthefuelforfutureaccomplishments.

Mo6va6ontoperformisincreased:

• Receivingfeedbackaboutyourperformancefulfilsabasicneedtoberecognisedandvaluedatwork.Thisislikelytoraiseyourself‐esteem.Self‐esteemisraised:

• Gainingnewinsightsintoperson’sperformance&personalitywillhelpmanagerbuildbe\errela6onship.Supervisorsgainbe\erunderstandingofeachindividual’scontribu6on.Usefulfordirectsupervisors&supervisorsonceremoved.Thejobofthepersonbeingappraisedmaybeclarified/definedmoreclearly:Employeesgainbe\erunderstandingofbehaviour&resultsrequiredintheirspecificposi6ons.

Managersgaininsightintosubordinates:

• Thepar6cipantsinthesystemarelikelytodevelopabe\erunderstandingofthemselvesandofthekindofdevelopmentac6vi6esthatareofvaluetothemastheyprogressthroughtheorganisa6on.Self‐insightanddevelopment

areenhanced:• Performancemanagementsystemsprovidevalidinforma6onaboutperformancethatcanbeusedforadministra6veac6onssuchasmeritincreases,promo6ons,transfersandtermina6ons.Ingeneral,aperformancemanagementsystemhelpsensurethatrewardsaredistributedonafairandcrediblebasis.

Administra6veac6onsaremorefairandappropriate:

• Thegoalsoftheunitandtheorganisa6onaremadeclear,andtheemployeesunderstandthelinkbetweenwhattheydoandtheorganisa6onalsuccess.Organisa6onalgoalsaremade

clear:

Learningoutcome5

Explainthecontribu6onsaperformancemanagementsystemcanmakeintheorganisa6on

Theadvantagesassociatedwiththeimplementa2onofaPerformanceManagementsystemareasfollows:

• Anobviouscontribu6onisthatemployeeperformanceisimproved.Inaddi6on,thereisasolidfounda6onforhelpingemployeesbecomemoresuccessfulbyestablishingdevelopmentalplans.Employeesbecomemorecompetent:

• 4Datacollectedthroughtheperformancemanagementsystemcanhelpdocumentcompliancewithregula6ons(egequaltreatmentofallemployeesregardlessofgender,race,ethnicgroup).Thereisbe\erprotec6onfromcourt

cases:

• Theperformancemanagementsystemallowsforaquickeriden6fica6onofgoodandpoorperformers.Italsoforcesmanagerstofaceuptoperformanceproblemsingood6me(i.e.beforetheproblembecomessoentrenchedthatitcannotberemediedeasily).

Be\erand6melierdifferen6a6onbetweengoodandpoorPerformers:

• Theperformancemanagementsystemallowsmanagerstocommunicatetotheirsubordinatestheirjudgmentsregardingperformance.Manager’sviewofperformanceis

communicatedmoreclearly:

• Incaseswhereanorganisa6onwantstochangetheorganisa6onalculture,thisini6a6vecanbeaddedtotheemployees’listofresponsibili6esandbesubjectedtoreview,togetherwithotherperformanceareas.Organisa6onalchangeisfacilitated:

• Whenemployeesaresa6sfiedwiththeirorganisa6on’sperformancemanagementsystem,theyaremorelikelytobemo6vatedtoperformwell,tobecommi\edtotheirorganisa6onandnottrytoleavetheorganisa6on.

Mo6va6on,commitmentandinten6ontostayintheorganisa6onareenhanced:

Learningoutcome5

Explainthecontribu6onsaperformancemanagementsystemcanmakeintheorganisa6on

Condi6onsforthesuccessfulimplementa6onPM:

Conveyreasonsforsuchasystemtoall

par6cipants

Ensuretopmanagement’s

commitmenttothesystem

Allpar6cipantsshouldtakepartinthedevelopmentandimplementa6on

Organisa6onalcultureshouldhaveafocuson

deliveryoutputs

AllmanagersshouldbeproperlytrainedinapplyingthePM

system

PMshouldnotbeimplementedin

isola6on,otherHRsystemsshouldallowforthePMsystem