Performance Management
Performance management (PM) is a goal-oriented process directed toward ensuring that organizational
processes are in place to maximize the productivity of employees, teams, and ultimately, the organization.
It is a major player in accomplishing organizational strategy in that it involves measuring and improving the
value of the workforce
Performance Appraisal
Performance appraisal is a method for management to make fair and impartial analysis of the value of
employees to the organization.
The systematic description of employee’s job relevant strength and weakness - Wayne Cascio
EFFECTIVE PERFORMANCE MANAGEMENT REQUIRES:
Identifying tasks and accountabilities
Defining competencies necessary to be successful in a position
Ensuring that team members have the required competencies
Having in place a system to develop competencies
Providing timely feedback on how effectively the team members are applying their respective competencies
to accomplish their tasks and achieve the goals
Rewarding and motivating effective performance
In the event that performance does not meet established requirements, the manager must understand the
Corrective processes and methods that can help improve employee performance.
CHALLENGES & FAILURES OF PERFORMANCE MANAGEMENT SYSTEM
MAJOR CHALLENGES IN MANAGING PERFORMANCE
1. Wrong Design
The performance management system and tools must fit with the specific needs of the organization. It cannot be
a duplication of a system designed and implemented in another organization, even an organization in the same
industry or the same business group. Intense consultation with various stakeholders and users of the system is
necessary. User trust is an absolute necessity for the success of the system. The design should be tried out on a
pilot basis before it is rolled out to the organization as a whole. All documents and forms must be in place. The
system should be fair and equitable. Performance management should be viewed as a continuous process and
not an activity conducted once or twice a year. The design should also include mechanisms for rewarding
performance and handling poor performers.
2. Absence of Integration
The performance management system has to be integrated with the strategic planning and human resource
management systems as well as with the organizational culture, structure and all other major organizational
systems and processes.
3. Lack of Leadership Commitment
Leadership commitment and support is a must for smooth implementation of the system. Leaders must drive the
process and make performance management an integral part of the management of the company. Leaders
contribute not only in setting the strategic direction and performance measures but also in monitoring and
reviewing performance across the organization. They also reinforce the performance cycle by recognizing and
rewarding performance.
4. Ignoring Change Management in System Implementation
Strategic management of change is a vital part of implementing the system. Driven by the top management, it
involves careful management of resistance. Communication would be a major intervention and a key tool in
managing the change. Implementation milestones and schedules must be followed. Proper documents must be
in place.
5. Incompetence
Competence to use the performance management system is necessary to ensure smooth implementation of the
system. Some of the major skills would include:
Defining strategic objectives, performance indicators, core competencies and performance contracts
Defining performance measures that correspond to the KPIs
Giving and taking feedback, conducting appraisal interviews, and active listening
Performance coaching
Shift from performance management systems to real time feedback systems (refer article in reference
material)
Rethinking Performance Management for Post-Pandemic Success (MIT Sloan School of Management
article)
