INTRODUCTI
ON TO
PERFORMAN
CE
MANAGEMEN
T
INTRODUCTI
ON
Performance Management (PM) is a strategic
process that aligns individual and team objectives
with organizational goals, involving clear
expectations, progress monitoring, regular
feedback, and continuous improvement. Defined
by Armstrong and Baron (2005), PM enhances
individual and team management to achieve high
organizational performance, serving as both a
developmental and performance-oriented tool.
KEY OBJECTIVES OF
PERFORMANCE
1. MANAGEMENT
Aligning Individual
3. Fostering
Goals with
Accountability: Encouraging
Organizational Strategy:
employees to take ownership
Ensuring that employees'
of their roles and
tasks contribute to the
responsibilities (Buchner,
organization’s mission and
2007).
vision (Kaplan & Norton,
1996).
4. Enhancing
[Link] Organizational Agility:
Development: Providing Creating a feedback-driven
opportunities for employee environment that allows
KEY OBJECTIVES OF
PERFORMANCE
MANAGEMENT
Performance management goes beyond evaluating
outcomes, aiming to create a supportive environment
that motivates and empowers employees, as emphasized
by Pulakos (2009), who highlights the link between
performance feedback and employee development for
sustained success. This approach, focused on
communication, engagement, and alignment, has
become a cornerstone of modern human resource
practices and a key driver of organizational performance.
TYPES OF INTEGRATION IN
PERFOMANCE MANAGEMENT
[Link] Integration: Aligns individual performance objectives with the organization's strategic
goals, ensuring that all levels of the organization work cohesively towards common objectives.
[Link] Integration: Ensures that various departments or functions within the organization
collaborate effectively, aligning their processes and performance metrics to support overall
organizational goals.
[Link] Resource Integration: Integrates performance management with other HR
processes such as recruitment, onboarding, and training to ensure a cohesive approach to
managing and developing talent.
[Link] Integration: Involves setting clear, aligned goals across the organization, ensuring
that individual, team, and departmental objectives support the broader organizational
mission.
BASIC PRINCIPLES OF
1. Transparency
EFFECTIVE PERFORMANCE
Transparency in performance management
MANAGEMENT involves open communication about
expectations, evaluation criteria, and
performance outcomes. It fosters trust and
reduces confusion or ambiguity.
2. Employee Development and
Empowerment
This principle focuses on providing
employees with opportunities for growth
through skill development, training, and
autonomy. Empowerment encourages
employees to take initiative and contribute
meaningfully to organizational success.
BASIC 3. Values Alignment
PRINCIPLES Aligning individual and organizational values ensures that
OF employees are motivated to contribute towards common
EFFECTIVE goals. This principle fosters a sense of purpose and cohesion.
PERFORMA
4. Congenial Work Environment
NCE A positive workplace culture promotes collaboration,
MANAGEME creativity, and engagement, making employees feel
NT comfortable and supported.
5. External Environment Consideration
Organizations must remain agile and responsive to external
factors like market trends, economic changes, or regulatory
shifts that can impact performance.
FEATURES OF EFFECTIVE PERFORMANCE
MANAGEMENT
1. Continuous 3. Fair Evaluation
Feedback
Providing regular and
constructive feedback ensures
Fair performance evaluations
employees stay aligned with require unbiased and
organizational goals and consistent appraisal methods.
continuously improve their skills. Using multiple data sources
It encourages ongoing and clear criteria minimizes
communication between subjectivity and builds trust in
employees and managers, the evaluation process.
[Link]
Clear course corrections when
Objectives
needed. 4. Recognition and
Setting SMART (Specific, Reward
Measurable, Achievable, Acknowledging high
Relevant, Time-bound) goals performance motivates
provides employees with clarity employees and reinforces
about expectations and reduces desired behaviors. Rewards
ambiguity. Clear objectives also can be monetary (bonuses,
serve as benchmarks for raises) or non-monetary
evaluating performance.
(public recognition,
additional responsibilities).
THE PROCESS OF
PERFORMANCE
MANAGEMENT
1. Planning
Defining roles, responsibilities, and expectations ensures alignment between employees' tasks
and organizational goals.
2. Monitoring
Regularly tracking progress and offering feedback ensures that employees stay on course to
meet objectives.
3. Developing
Offering training and development opportunities helps employees acquire the skills needed for
current and future roles.
4. Rating
Performance assessments help determine whether employees meet, exceed, or fall short of
established standards.
KEYS TO HIGH PERFORMANCE
1. Building Trust 3. Measuring What Is
Important
Trust is the foundation of Identifying and focusing
strong employee- on key performance
manager relationships. indicators (KPIs) ensures
Open communication resources are allocated to
areas with the most
and consistent actions
significant impact.
build credibility.
2. Encouraging Why Measuring Organizational Performance
Change Measuring
Is Importantperformance helps organizations
Promoting adaptability understand the effectiveness of their
and openness to new strategies, make informed decisions, and
ideas ensures that identify areas for improvement. It also fosters
organizations and accountability and transparency within the
employees stay organization.
competitive in evolving
markets.
PARAMETERS TO MEASURE
ORGANIZATIONAL
PERFORMANCE
1. Financial Performance
Metrics such as profit margins, return on assets (ROA), and return on
investment (ROI) provide insight into the financial health of an
organization.
2. Product Market Performance
Indicators like sales volume, market share, and customer acquisition
rates gauge success in the competitive marketplace.
3. Shareholder Return
Metrics like total shareholder return (TSR) and economic value added
(EVA) reflect the value created for investors.
PARAMETERS TO MEASURE
ORGANIZATIONAL PERFORMANCE
4. Operational Efficiency
Metrics such as cost-efficiency, inventory turnover, and process
optimization measure resource utilization and productivity.
5. Employee Performance
Employee engagement, turnover rates, and productivity metrics
provide insight into workforce contributions to organizational
success.
6. Corporate Social Responsibility
Metrics like environmental impact, community involvement, and
ethical practices measure the organization’s social
contributions.
DSMC/ATI PERFORMANCE IMPROVEMENT MODEL
DSMC Model
[Link]: Identify performance gaps and
design improvement strategies.
[Link]: Choose the most effective solutions
based on feasibility and impact.
[Link]: Track progress using relevant
metrics.
[Link]: Maintain improvements by
implementing monitoring systems.
DSMC/ATI PERFORMANCE IMPROVEMENT MODEL
ATI Model
[Link]: Identify root causes of
performance issues.
[Link]: Experiment with potential solutions on
a small scale.
[Link]: Roll out successful solutions
organization-wide.
SOURCES 1. Peers
OF MULTI- Colleagues provide insights into collaboration and
SOURCE teamwork.
FEEDBACK 2. Managers
IN Supervisors assess performance against organizational
PERFORMA goals and responsibilities.
NCE 3. Subordinates
Employees evaluate managers on leadership and
MANAGEME
communication effectiveness.
NT
4. Customers
Customer feedback highlights service quality and
satisfaction.
5. Self-Assessment
Employees reflect on their achievements and areas for
WHO 1. Direct Managers
SHOULD DO Managers understand job responsibilities and individual
PERFORMA contributions.
NCE 2. Peers
EVALUATIO Peers provide insights into teamwork and collaboration.
N? 3. Subordinates
Subordinates evaluate leadership effectiveness and
communication.
4. External Stakeholders
Customers and clients assess service quality and
satisfaction.
5. Self-Assessment
Encourages employees to reflect on their achievements
THAN
K YOU
