Performance management



This means the integration of employee development with results based assessment. It encompasses performance appraisal, objective setting for individuals and departments, appropriate training programmes and performance related pay. Performance management emphasis development and the initiation of self-managed learning plans as well as the integration of individual and corporate objectives.

Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.

Performance is a record of outcomes achieved. Performance management is a means of getting better results from the organization, teams and individuals by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements.

It is a process of establishing shared understanding about what is to be achieved, and an approach to managing and developing people in a way that increases the probability that it will be achieved in the short and longer term.

Performance management is a broad process that requires managers to define, facilitate and encourage performance by providing timely feedback and constantly focusing everyone’s attention on the ultimate objectives.

Principles Of Performance Management

  1. It translates corporate goals into individual, team, department and divisional goals
  2. It helps to clarify corporate goals
  3. It is a continuous and evolutionary process in which performances improves over time
  4. It relies on consensus and cooperation rather than control or coercion
  5. It encourages self-management of individual performance
  6. It requires management style that is open and honest and encourages two-way communication between superiors and subordinates
  7. It requires continuous feedback
  8. Feed back loops enable the experience and knowledge gained on the job and individuals to modify corporate objectives
  9. It measures and assess all performance against jointly agreed goals
  10. It should apply to all staff; and it is not primarily concerned with linking performance to financial rewards.


Concerns of Performance

  1. Performance management is concerned with performance improvement in order to achieve organizational, team and individual effectiveness
  2. Performance management is concerned with employee development. Performance improvement is not achievable unless there are effectiveness process of continuous development
  • Performance management is concerned with satisfying the needs and expectations of all the organizations stakes holders –owners, management, employees, customers, suppliers and the general public
  1. Performance management is concerned with communication and involvement. It may contribute to the development of a high-involvement organization by getting teams and individuals to participate in defining their objectives and the means to achieve them.

Aims of Performance Management.

  • Improve organisational effectiveness
  • Motivate employees
  • Improve training and development.
  • Set objectives and targets of work
  • Provide feedback on performance.
  • Change the organisational culture.

At a general level, the broad process of performance management requires managers to do three things well:

  1. Define performance
  2. Facilitate performance
  3. Encourage performance.


Define Performance:

Ensure that individual employees or teams know what is expected of them, and that they stay focused on effective performance.  The manager does this by staying focused to goals, measures and assessment (performance appraisal).


Facilitate performance

Managers must facilitate performance – eliminate roadblocks to successful performance, provide adequate resources to get a job done right and on time, and pay careful attention to selecting employees.  Obstacles that can inhibit performance include; poorly-maintained equipment, delays in receiving supplies, inefficient design of work spaces and ineffective work methods

Encourage Performance.

To encourage, especially repeated good performance, it is important to do the following well; a) provide a sufficient amount of rewards that employees really value, b) in a timely and c) fair manner.

Performance Management Process

Performance management is concerned with improving individual and team performance. Performance management is a continuous self-renewing cycle. Its main activities are:-

  1. Role definition – in which the key result areas and competence requirements are agreed. The role definition provides the framework for P.M. It sets out: –
    1. The purpose of the role, which summarizes its overall aim-what the job holder, is expected to do.
    2. The key result areas or principal accountabilities – which define the main output areas of the role.
    3. The key competencies, which indicate what the role holder has to be able to do and the behaviour, required performing the role effectively. They provide the basis for drawing up personal development plans.
  2. The performance agreement / contract – this defines expectations (what is to be achieved, how will performance be measured, the competencies needed to deliver the required results. This is the performance planning stage.

Performance agreements, also known as performance contracts, define expectations i.e. the results to be achieved and the competences required to attain these results.

Agreements cover the following points.

  • Objectives and standards of performance – results to be achieved defined as targets and standards
  • Performance measures and indicators to assess the extent to which objectives and standards of performance have been achieved.
  • Competency assessment
  • Core value or operational requirements – refers to the core values of the organizations for quality, customer service, team working employee development etc. certain general operational requirements may also be specified – health and safety, budgetary control, cost reduction, security.

Guidelines that define performance measures: –

  1. Measures should relate to results, not efforts
  2. Results must be within the job holder’s control
  3. Measures should be objective, observable and achievable.
  4. Data must be available for measurement
  5. Existing measures should be used to adapted wherever possible


Measures can be classified under the following headings: –

  • Finance – income, economic value added, shareholder value, rates of return, costs
  • Output – units produced or processed
  • Impact – attainment of a standard (Quality, level of service), changes in behaviour (internal and external customers), completion of work, innovation
  • Reaction – judgment by others, colleagues, internal and external customers
  • Time – speed of response, amount of backlog, time to market, delivery times.

Personal development plan – sets out the actions people intend to take to develop themselves and improve their performance. This is the performance development stage

  1. Managing performance throughout the year – here action is taken to implement the performance agreement and personal development plan.

The issues that may arise in the course of managing performance throughout the year are:

  1. Updating objectives and work plans

Performance agreements and plans are working documents. New demands,           situations arise that make demands for updating the objectives and work plans.           The following is important at this level.

  • Discussing with the jobholder on what has been done and achieved.
  • Identifying any shortfalls in achieving objectives or meeting standards
  • Establishing the reasons for the shortfall – changes in the work environment, new pressures and demands.
  • Agreeing any changes required to the objectives and work plans
  • Agreeing any actions required by the employee or manager to improve performance.


  1. Continuous Learning

Individuals must be able to learn from the problems, challenges and successes     inherent in people’s day-to-day activities.  Any occasion when managers give            instructions, agree on what is to be achieved and review how well a task has    been accomplished provides a learning opportunity.


C)    Dealing with Performance Problems

The five basic steps required to handle performance problems are: –


  1. Identify and agree the problem – get and analyse feedback and agreement from the individual on what the short fall has been.


  1. Establish the reason(s) for the short fall – identify any causes that are external to the job and outside the control of the manger and individual. Consider the factors that are within the control of the manager and individual. Determine the extent to which the reason for the problem is because the individual:


  1. Did not receive adequate support or guidance from his manager
  2. Did not fully understand what he was expected to do
  3. Could not do it –ability
  4. Did not know how to do it – skill
  5. Would not do it – attitude


  • Decide and agree on the action required. Such action will be undertaken by the individual, the manager or both parties. This include: –


  1. Changing behaviour
  2. Changing attitudes
  3. Clarifying expectations – job requirements, objectives and standards
  4. Jointly developing abilities and skills


  1. Resource the action – providing the coaching, training, guidance, experience or facilities required to enable agreed actions to happen


  1. Monitor and provide feed back – monitor performance, ensure feedback is provided/obtained, analysed and agree on any further actions that may be necessary.


  1. Performance review – is the formal evaluation stage, when a review of performance over a period takes place, covering achievements, progress and problems.

Performance and development reviews provide those involved with the opportunity to reflect on past performance as a basis for making development and improvement plans. The performance review discussion provides the means through which 5 key elements of performance management can be achieved.  These are: –


  1. Measurement- assessing results against agreed targets and standards
  2. Feedback – Giving people information on how they are performing.
  3. Positive reinforcement – Recognizing what has been done well so that it will be done even better in the future.  It also entails positive criticism, those that point the way to improvement.
  4. Exchange of views – Performance review discussions need to be full, free and frank in the exchange of views, about what has been achieved, what needs to be done to achieve more, what people think to their work and the manner in which they are guided and managed and their aspirations.

The review process should be a dialogue, not atop-down interview.

  1. Agreement on action plans – to be implemented by individuals alone or by individuals with the support of their managers.
Performance Review & Development Meetings
  1. Both parties should prepare for the meeting so that they consider the points for discussion. Assess the achievement of objectives; understand the factors that affected performance and actions necessary to improve performance.
  2. Self-Assessment. The employee should consider achievements and progress, prepare to explain the shortfalls, training and development needs.
Constructive Review Meetings

Such a meeting is likely to take place if reviewers:-

  • Encourage reviewees to do most of the talking
  • Listen actively to what they say
  • Allow scope for reflection and analysis
  • Analyse performance, not personality
  • Keep the whole period under review, not isolated incidents
  • Adopt a ‘no surprises’ approach – performance problems should have been identified and dealt with at the time they occurred
  • Recognize achievements and reinforce strengths
  • End the meeting positively with agreed action plans and an understanding of how progress in implementing them will be reviewed.
Activities of the Performance Management Process


 Role definition

Sources of Performance Problems.

  • Organisational characteristics.
    • Emphasis on past clashes with managerial preference for current information
    • No commitment to appraisal
    • Conducting of appraisals not reinforced – no rewards
    • PA not an important function of management.
    • Redundant in participative democratic climate.


Position characteristics.

  1. Inability to observe performance.




  • No user participation in system development.
  • Failure to develop performance measures from job analysis.
  • Rating systems administered subjectively.
  • Results used to discriminate on the basis of race, gender etc.


Performance appraisal policies.

  • No standard policy regarding raters tasks/roles in appraisal.
  • No standard policy regarding frequency of appraisals.



Rater and rating process


  • Lack of knowledge of ratees job.
  • Possession of erroneous or incomplete information.
  • Differing expectations because of levels in hierarchy and role



  • Bias and errors in human judgement.
  • Stereotypes and prejudices.

performance appraisal instrument.

Performance measures (criteria)

  • Ambiguity of performance measures: incompleteness.
  • Lack of specificity and behaviour – based language
  • Irrelevant performance criteria
  • Criteria not communicated explicitly to ratees.




  • Failure to recognise excellent performance
  • Promotional decision errors
  • Staffing jobs with inadequate skills mix

Guidance and development.

  • Failure to recognise potential
  • Failure to build skills through training.


Grievances because of subjectivity and bias.



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