Performance management can be defines as...
'A framework in which performance by individuals can be directed, monitored and refined'.
Basic requirements of managing performance:
- Everyone should know what to do, and what not to do
- Everyone contributes
- Everyone develops the necessary skills
- Managers must have the necessary skills
- Managers measure and monitor
Making sense of performance:
Whatever the industry, or the level of job, managers are faced with 4 fundemental questions..
- What are the key determinants of the organisational performace?
- How well are my staff currently performing in their jobs?
- How can their performance be improved?
- What are the causes of underperformance?
Making sense of performance:
Employing only talented people -
Hiring only exceptionally talented people can lead to many consequences. For example 'ordinary performers' may feel unsettled and therefore lack motivation etc.
The search for conceptual clarity, what does 'performance' actually mean? -
- The effort bargaining - (the relationship between effort and reward)
- Discretionary effort - (employees to not maximise their capabilities)
Productivity and performance -
The productivity of a labour force generally, or of an individual employee, is not the same as its, or his or her, performance. Productivity can be increased by improving performance (i.e. - through enhanced motivation), but increases in labour productivity can also result from reduced costs, increased prices and automation.
Understanding what influences performance:
W.E. Deming stated that what workers do or do not do is the main reason why organisations experience low performance. He argues..
'The workers are handicapped by the system, and the system belongs to management.'
Understanding different performance situations -
Managers are faced with a wide range of situations that create very different kinds of performance problems.
- People absent from work
- People at work who don't perform
- Legitimizing low standards
- Raising performance expectation and standards
The role of the manager in performance management:
The appraisal process is arguably the most commonly used single instrument for managing individual performance.
The performance appraisal process -
This process is commonly used throughout organisations to evaluate or appraise employee's performance in the past and to consider how to maximise the employees future contribution.
Rating performance -
Many appraisals require the manager to rate the performance of each employee in order to compare performance among colleagues.
- Manager-allocated rating scale - (asking a manager to choose most appropriate rating)
- Objective-based rating scales - (rating in terms of extent to which objectives were met)
- Points-based rating scales - (allocating points to different aspects of the job)
Direct objectives -
These objectives can be quantified (i.e - by using financial values etc), in turn they represent a stronger motivational influence on employee behaviour because progress towards the agreed objectives can be monitored and displayed.
Indirect objectives -
- Key performance indicators - (vital means by which firms can judge their performance)
- Project measures - (targets expressed in terms of delivery of a project)
The drawback of setting objectives -
Setting objectives presumes that required actions or outputs can be predicted and sometimes this just isn't the case.
Giving effective feedback:
Effective feedback gives employees the opportunity to learn about themselves and to decide whether they need to change in some way or another.
360° feedback -
This involves seeking contributions about what a person achieves and how he or she operates from a variety of sources who are in a position to offer such feedback. However, without a reasonable degree of trust, the process of seeking feedback from different levels might be detrimental to working relationships.
This is an important tool to help an individual plan how they can best maximise their skills and knowledge. This can then help individuals build upon weaker areas, and develop existing skills and knowledge.
Managing performance problems:
An informal performance review -
- Meeting between an employee and manager to highlight performance concerns
- Discuss set targets for improvement
- Arrange support and training to achieve these targets
A formal performance review -
- Meeting between manager and a HR practitioner (or another manager)
- Employee is informed about the right to be accompanied by a representative
- Concerns about failure and consequences of failure to improve are highlighted
- This could result in demotion, transfer or even termination of employment