Definition of Performance Management System

The Performance management system is developed mostly according to the needs, size and resource availability in an organisation. Lots of models of Performance Management Systems are developed all over the world. Generally speaking, the basic model of a Performance Management Systems comprises of four major components.

Setting of performance standards

Measuring or evaluating the performance

Quality Improvement process

Progress monitoring, reporting and rewarding

In other words, we can say, it is a cycle of

Planning

Performance

Reviewing and

Developing the employee’s performance as a continuous process.

Let us see the process in detail.

Performance Planning

Performance planning is the first crucial component of any performance management system. It is a mutual understanding over discussion between the reporting officer and the employee. The employee decides upon the targets and key performance areas which can be performed over the given period. The standards are set on the agreement of both superior and the employee.

Performance Period

During the period of performance, the employee and the superior faces with ups and downs of accomplishing certain tasks, and may not able to complete specific ones. Employee is encouraged and motivated by the superior to finish his task. Performance monitoring is maintained by the superior and the journal of work is maintained by the employee for a better review.

Performance Reviewing and Appraisal

The appraisals are normally performed twice in a year in an organisation 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 rates himself, called as self appraisal. Usually this comes as form to be filled in with given set of measurable variables. The achievements and obstacles may be filled in by the employee, apart from the regular duties.

As the next step, the employer or the appraiser provides ratings to the appraisee, the one who is appraised.

The entire process of review takes an active turn when both the employee and the superior discuss together the causes for gaps in the performance and how to bridge them effectively.

Feed back and Counseling Session

This is an important phase in the system of performance management. This is where, the entire result of the entire system, whether a success or failure, is determined. Because, we should understand, the purpose of evaluation is not to determine the flaws and errors of the employee. But, to identify them, and help him improve on those areas.

On the other hand, the evaluation may be used to identify the strong areas or key performance areas of the employee, and help him to be an expert, a master in that area.

Hence, this is the stage where the employee gets knowledge about the areas of improvements and also whether he is contributing the expected level of performance or not. When the employee gets a transparent feedback, he feels confident to face with his flaws, as there is no more need to hide them from his superior.

In this stage, the superior has to take all the possible steps to ensure that the employee meets the expected outcomes through personal counseling, mentoring, and training and development programmes.

Rewarding Good Performance

This step is to keep the fire alive. There is an old saying that “once you reach the destination, the motivation to walk disappears”. So, to keep walking, we should fix another destination and move on. Is it not? The same way, when an employee achieves his fixed targets for the period, he feels contended and happy. Next?The same target?ok. He may do, but the enthusiasm would be missing. Hence, demotivation.

To keep him motivated, rewarding helps. When the employee is publicly recognized for his good performance, it directly influences on the self esteem and he will become achievement oriented. Also, the contribu-tion duly recognized by the organisation helps and employee in coping up with any other failures and satisfies his need for affection and affiliation.

Performance Improvement Plans

A fresh set of goals are established for the employee and new time line for accomplishment of the objective is provided. The employee is clearly communicated about the areas in which the employees are expected to improve. Again, this plan is jointly developed by the superior and the employee together. Thus, a fresh cycle of performance period begins.

Performance Management Models

A performance management model is a method of stimulating the employees to adapt themselves to activities that will generate the desired output. It may not be always maximizing the productivity, but to any other desired output like team building, harmonious workplace, violence free environment, socially responsible work group, etc.

The important agenda of performance management model is efficiency. We know that the efficiency of machines can easily be raised by inventing a new technology, buying a new machine or even by overhauling the existing one. But, what we deal with here are humans, which is a lot more complicated. Employees may fall sick, may need rest, vacation, motivation and other innumerous things to raise the level of performance.

A performance management model tries to understand these variables and integrate them into one model. The traditional model creates a timeline and average production as a standard. The group of workers who comes under the category of accomplishing the task is aggregated. Once, the company has a group of performers, it becomes easier to simulate the same model to other groups, who are identified as under producers.

The group of over producers is taken for simulating the average production group. Hence, the bar can be pushed a little higher for each group over a period of time. Using the average as a baseline will effect employees. When people have a clear goal, they will often work to achieve the target. This keeps the employees focused.

The disadvantage of this traditional model is, the under producers when not able to meet the goal, gets frustrated, resentment grows and the group goes down, further lowering the productivity.

Model of Performance Management System

Models of Performance management system are created more often catering to the needs of the organisation. Let us see one model for our understanding.

The model given below is composed of three units, based on the level of influence on the employee performance.

Primary influence - Organisation (Most influential)

Secondary influence – Personality, attitude and behaviour (Second Level)

Tertiary influence - Work place (third level)

Let us see one by one in detail

Organisation - Primary Influence

The influential factors in an organisation are as follows:

Organisational structure

Employee Motivation

Work place and its implications like, work place privacy, workplace violence and harassments, workplace harmony and cleanliness

Management techniques and methods

Teams

Monitoring and control systems

Effective leadership

Performance evaluation systems

Reward System

Performance Counseling

Organizational culture and work climate

Personal Orientation

The factor that comprises the personality of an employee obviously effects the performance of the employee. The five factor model is used by many researchers of industrial psychology to categorize the dimensions of personality. They are

Emotional Stability

Agreeableness

Conscience

Openness to experience

Extraversion/ introversion

Apart from these, there are many other factors, what we commonly use in our business terms like,

Attitudes

Beliefs

Values

Knowledge and skills are also important factors that determine the employee’s performance.

John Campbell defines eight behavioural dimensions of Performance. They are

Job-specific task proficiency -how well an employee can do his job

Non-job-specific task proficiency – how well an employee can doother jobs, related to his job, in the organization

Communication – how well an employee can communicate, bothwritten and oral

Demonstrating effort – How well an employee can be committed andpersistent at his job

Maintaining personal discipline – how well an employee can avoidnegative behavior

Facilitating team and peer performance – how well an employeesupports his team and peers

Supervision – How well an employee influences his subordinates

Management and administration – How well and employee performsothers management functions such as organising, controlling etc.

Taking a good view of understanding in this side of the employee by both, employee himself and the employer will help in identifying the blockages in better performance. Making a note of these behavioural standards in the performance evaluations will create quantum leaps of better relationship between the appraisee and the appraiser. Usually, Performance Counseling method is used to stimulate and rectify the problem areas in this sector. We will be having a better view of performance counseling in the forth coming units.

Work Place and its Influence

Workplace is where the employee performs his job. The work place has a lot of implication over the performance of the employee. The major factors are

Relationship of Superior and the subordinate

Relationship among the peers and team mates

Work life balance

Quality of work life

Quality of work place

Workplace privacy

Workplace violence and harassments

Workplace harmony

Workplace stress

Morale level

Workplace environment

We would see these in detail in the forth coming units.