Performance Management System and Process

The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process.

Today, all the major activities of HR are driven towards development of high performance leaders and fostering employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a facilitator and an enabler.

Performance management is the current buzzword and is the need in the current times of cut throat competition and the organizational battle for leadership. Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programmes and rewarding achievements.

The process of performance management starts with the joining of a new incumbent in a system and ends when an employee quits the organization.

Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting superior performance by communicating expectations, defining roles within a required competence framework and establishing achievable benchmarks.

According to Armstrong and Baron (1998), Performance Management is both a strategic and an integrated approach to delivering successful results in organizations by improving the performance and developing the capabilities of teams and individuals.

The term performance management gained its popularity in early 1980’s when total quality management programs received utmost importance for achievement of superior standards and quality performance. Tools such as job design, leadership development, training and reward system received an equal impetus along with the traditional performance appraisal process in the new comprehensive and a much wider framework. Performance management is an ongoing communication process which is carried between the supervisors and the employees through out the year. The process is very much cyclical and continuous in nature. A performance management system includes the following actions.

• Developing clear job descriptions and employee performance plans which includes the key result areas (KRA') and performance indicators.
• Selection of right set of people by implementing an appropriate selection process.
• Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks.
• Providing continuous coaching and feedback during the period of delivery of performance.
• Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement.
• Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans.
• Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks.
• Providing promotional/career development support and guidance to the employees.
• Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization.

A performance management process sets the platform for rewarding excellence by aligning individual employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear performance expectations which includes results, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.

To conclude, performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. It’s about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance.

How to Develop a Performance Management System
Performance management involves more than simply providing an annual review for each employee. It is about working together with that employee to identify strengths and weaknesses in their performance and how to help them be a more productive and effective worker. Learn how to develop a performance management system so that you can help everyone in your organization work to their full potential.

1. Evaluate your current performance appraisal process. Look at what type of feedback you are providing to your employees. Determine if there is anything you need to change or add to the evaluation itself. You may decide to build on what you already have or to develop a new system altogether.
2. Identify organizational goals. Performance management systems help rally staff members around your organization's goals because they help staff know how they are to be involved in reaching that goal. Take the time to clarify what your goals are for the next year as a company.
• Identify processes or procedures that could be simplified or done more effectively.
• Declare your sales goals for the next year or new products you would like to develop.
• Share your hope for better communication between departments and staff members.
3. Set performance expectations. As you sit down with each employee, clearly lay out your expectations for them.
• Acknowledge what they are already doing well. Use this to encourage them.
• Share some weaknesses that you have observed in them and in their work habits, and how overcoming those would help their performance in the company.
• Identify specific things you would like them to accomplish over the next year, or whatever time frame works best for you. Prioritize these so the staff member knows which is most important and make sure to give them a deadline for each task.
4. Monitor and develop their performance throughout the year. As employees begin to work on their performance, keep an eye on how they are doing. If they appear to be struggling to meet performance expectations, talk with them and see if you can offer any support or coaching.
5. Evaluate their performance. At each performance review, let the employee know how they are doing. It is often helpful to assign a numeric value on a scale, rating the employee from "not meeting expectations" to "meets expectations" to "exceeds expectations."
• Provide feedback on their performance. Be as specific as possible, noting key examples of when they demonstrated a certain quality.
• Talk about the consequences or rewards of their performance. Let them know if they are on probation, are getting a raise in pay, changes in vacation days, or any other relevant action.
• Discuss any problems they may be having. Listen to their concerns or worries as you talk through potential solutions.
6. Set new performance expectations for the next year. Some items may be the same. However, since these are also based on organizational goals, you will need to re-examine your goals for the upcoming year.

Performance Reviews:

Review of performance once or twice in a year provides an objective or a sense of focus on the key performance or development issues. Performance review meetings form the basis for enabling both the managers and the individuals to positively explore ways for improving the performance in the near future and to identify solutions for resolving the issues which come in the way of attainment of predetermined performance standards.

Some of the crucial objectives of performance reviews are as follows:

• Performance planning
• Employee motivation and empowerment
• Learning and Development
• Acts as a two way channel for communication for discussing the roles, expectations, relationships and work problems.

Performance review meetings should focus on two major areas: Firstly on performance improvement measures and secondly, the meeting should be forward looking in nature rather than backward looking. The main problems which normally arise during the period of performance reviews are:

• Identification of performance measures and the criterions for evaluating performance.
• Problems in collection of genuine performance related evidences.
• Manager’s bias.
• Conflicts between the reviewers and the people being reviewed.
• Defensive behavior from the people under review as a response to some criticisms.