Effective Performance Management

Every company/organization has its own corporate mission and corporate vision. To achieve these they do required certain form of resources which can be in the form of land, capital, machinery, material and last but foremost the human capital means the human resource which leads to utilize the rest of the resource through which they can drive the organization on the way to achieve its corporate mission and corporate vision. We all know and cant ignore that every machine or equipment do need certain form of input to operate effectively and efficiently and to make sure that they keep perform well on continuous basis we design certain measures to evaluate their performance. In a similar way to get higher level of productivity from humans (employers) we need to evaluate them and keep motivate them through certain rewards which should be on a performance based but here the question arises how we are going to evaluate and manage their performance. In answer of this question I would say, we need to develop and design a mechanism or system which is known as Performance Management System.

The essay has been prepared to help all the readers to understand what is performance management, what performance management system is all about, what are the main characteristics of effective performance management system, the skills and techniques required during the process of performance management and to what degree this system can effectively manage employee performance .

INTRODUCTION

“Performance Management is a systematic process through which the company/organization involves its employees, as individuals and members of a department, in achieving agreed objectives, thereby improving themselves and developing organizational effectiveness, in line with the company’s/organization mission, vision and goals”.

Ref: ARMSTRONG, M.nd BARON, A. (2004) Managing Performance: performance management in action .London: Chartered Institute of Personnel and Development.

We have to believe that the existence of an effective and well organized Performance Management System in a company/organization guarantees consistent development and growth of the company and its employees as well. Performance is directly associated with the effective and efficient output by the human capital of a company/organization with an opportunity to the management to evaluate individual contribution to the company’s vision, mission and goals. This is basically a round planned year activity which gives an employee the opportunity to achieve its personal and professional goals by meeting the defined criteria of a good company and meeting those objective and goals which have been defined in advance by the management. Definitely it will also result to the identification of individual employee standing in the department and the company, and the capability for go further and development in the company.

An effective and efficient performance management system has four core pillars and these four pillars perform activities independently. These are:

The Performance Management System guarantees that the company is approaching towards the right direction by achieving its targeted goals and newly rising challenges at all times by recognizing the needs which are required to develop and upgrade the human resources and the company.

When we are talking about Performance Management System, it is unfair not to discuss Performance Appraisal as it focuses that how the company/organization should achieve its required objectives through its human resources and their growth and also which is the key method of the Performance Management System which the company follows. But to achieve these company’s/organization objectives it is necessary that the performance appraisal should work effectively and be able to:

*Attain company’s and individual goals

*Enhanced staff productivity which can interlink to company/organization output

*Promote channels of communication and mechanism of getting feedback

*Provide necessary information regarding making decisions of enhancement of career, promotions, transfers, succession planning and training and development for the staff.

Ref: ARMSTRONG, M.nd BARON, A. (2004) Managing Performance: performance management in action .London: Chartered Institute of Personnel and Development.

The key purpose of reviewing employee performance on regular basis is to evaluate their capability of performing assigned job and their effectiveness and offer them an opportunity for encouraging, having a discussion face to face which carrying a great weight .It can be done through mutually looking for goals which are related to the key work and the assigned job responsibilities that the employee is assumed to achieved during the forthcoming year, through carrying out job responsibilities which can be in the form of employee major responsibilities, minor responsibilities, direct responsibilities and administrative responsibilities and emphasizing towards reaching and achieving targets and goals intended for the year, through meetings either formal and informal which can help to evaluate and review performance of the employee on his/her assigned responsibilities, annual goals/objectives needs to be discussed and finalized and to discus factors which are obstruct in nature then it’s the responsibility of the departmental head to play a role as coach or a trainer, and finally annual performance evaluation of the period which is near to end and under assess which might include appreciation if he/she performed well or if necessary planning for further progress and other correlated activities. While evaluating performance of the employees it is necessary to evaluate both quantitative and qualitative output of employees.

However there are certain tools which can be used to achieve required results for the employee in Performance Management System and Goal setting is one of them. Once our goal has been designed no buddy can stop us by assuming that we are approaching towards accomplishment of our goal because of this strong mechanism we are in a position to achieve a goal which seems to be impossible to achieve. It helps us to realize that where we are standing at the moment and where we seeing ourselves in the future. Performance goal is basically a statement of specific outcomes or results to be attain by the employee at his/her workplace. When we talk about individual performance goals, these are the goals which are linked with the company and departmental goals and in order to make them significant it is necessary that the goal should be clear and well defined.

Establishing performance goals attempts to ensure that goals of each employee and workgroup should support the result which needs to be achieved by other department and other groups of people. Therefore the Performance Management System should be established on preset work goals/target for the next performance year.

Goal setting is not an individual activity. During goal setting the Departmental Manager and concerned supervisors work together with the employee to establish individual work goals at the commencement of the performance review period, which is suppose to achieve by the employee during the year. We also need to identify goals and during this whole activity we need to consider few things during goals identification and that is:

1.Specific: Objective/goal should be clarified in a positive manner i.e. what is essential to be done rather than saying what is not essential.

2.Measurable: What will be the strategy for achieving and measuring the objective should be known asking how and what to do to make it different are useful measures.

3.Agreed: Goals which are going to be assigned to the individual/employee should be agreed and mutually set with those who will be engage as a supporting hand, in line to ensure that the employee is dedicated towards it.

4.Realistic: The more realistic and appropriate the goal is with the actual task, the more possibility of the goal being achieved. Individual dedication and participation is a key element in achieving goals and objectives that are appropriate to the employee and the business.

5.Time bound: There should be set and exact time limitations by which the goals are to be wholly or fairly achieved.

An example of SMART goals may include:

*Export sales to be increased by 20% by the end of the year.

*All the Departmental Heads to be trained on the new Performance Appraisal System by the end of the year.

To make Performance Management System More effective we should conduct:

Performance Review Meetings:

In addition to ongoing day to day feedback and mutual work, there should be a mechanism or system of periodic performance review meetings between the Department Manager and the employee which gives an opportunity to measure the development towards meeting required goals. It allows the Department Manager to highlight the expectations that he/she has from the employee. It also someway or the other gives the employee an opportunity to describe what he or she has achieved and with what sort of barriers they were faced. This shared exchange of ideas and problems is a vital part of the performance management process.

During these kinds of meetings the employee has a crucial role to play. It is his or her responsibility as much as the Department Manager’s to discuss questions such as:

*In what manner do you think I can improve on my present performance?

*What do you see as my strengths? Which area of my performance needs to be improved, in your opinion?

*What sort of training do I need that will help me to enhance my performance?

The other main purpose of these kinds of review meetings is to jointly diagnose the skills and competencies that are required to build for instant performance needs and up coming needs/future needs based on the capability of the employees. This kind of meetings also recognizes the training need assessment of the employee which may include on-the-job training, internal formal training and external training.

Mid Review:

*The Department Manager must meet the employee from time to time according to the schedule decided upon at the start of the financial year to evaluate performance on responsibilities related to the job and work objectives.

*During the year there should be at least one performance review meeting.

*The Department Manager and the employee should sit together and discuss the progress made on the activity plan and isolate any problems the employee may come across.

*These reviews also gives the Department Manager an opportunity to make an employee realize about his/her performance , which diminish the prospects of volatile outcomes if there is any during the time of annual appraisal.

Annual Review:

A person who is going to evaluate they must meet the employee at the end of financial year to confer his/her annual performance evaluation, so it is necessary that the employee should be informed about this meeting and its purpose prior 3 to 4 days by the Department Manager and counsel him or her to organize for it in relation to his/her performance.

Essential of Effective Meetings:

It is recommended for the Department Manager or Supervisor to comply with the following steps during mid review and annual meetings. This would ensure that the objectives of the meeting are achieved in an effective and efficient manner.

Control the environment: The meeting should be held without any interruption. During the meeting the Department Manager’s entire focus should be on the employee and his or her performance.

State the purpose of the meeting: Communicate employee the purpose of the meeting, i.e. to review his or her performance during the past year, to identify areas which needs to be develop, and to plan for the next year. When the employee and the Department Manager understand and agreed the purposes and benefits of the appraisal process, it is easier to have effective discussions.

Ask for the employee’s opinion: Always first ask the employee’s opinion regarding his or her performance during the year. It sounds professional and it also shows that the Department Manager is interested in the employee and how the employee values himself or herself. Ask questions and sincerely listen to answers.

Build on the employee’s strength: Give the employee positive feedback; performance should be taken in focus neither the person.

Resolve differences: Be receptive to the employee’s responses, encourage the employee to support his or her viewpoint.

Summarise and conclude the discussion: The way this meeting is ended is just as important as the way it began. Summarise the discussion, thank the employee for being there, and make sure that the employee leaves satisfied, motivated and committed, and that the meeting ends with a positive note looking towards the work goals for the next year.

Meeting to set Performance Goals/Objectives for the Next Year: The Department Manager must schedule another meeting within the first fortnight of the appraisal discussion to set goals/objectives for the next review period. It is necessary that these goals will be job specific.

Parallel feedback and communication: It is very important that there should be a mechanism of concurrent feedback and communication between the Department Manager and the employee. Follow-up is required that binds the performance appraisal together for extended period of time. Without spending time on follow-ups, the annual appraisal discussion will have little impact on the overall performance.

Qualitative Evaluation:

In addition to quantitative capacity in the Performance Management System the company should also consider and calculate individuals/employees qualitative output as well. These forms of outputs are acknowledged as employee’s contribution, using the bunch of skills and proficiency which ultimately results and overall contribution to the department and the company.

The Human Resource Department identifies and evaluate the following skills as qualitative skills of employee:

*Knowledge about the job

*Ability of Decision Making

*Communication Skills

*Leadership Skills

*Relationship and cooperation

*Ability to take initiatives

*Creativity and quality

*Work ethics

In addition to evaluation of the above mention areas, the areas which required training and development are identified and put in shape of written document to give this issue a priority for each employee. Identification of these needs is the initial step for the Human Resource Department to design a comprehensive Training need assessment activity plan to make sure that all the employees are effectively prepared to face the challenges at the workplace in a professional manner.

Ref:

www.wellesley.edu/HR/new/VWSite/PerfMgmtGuidelines_01.24.02.doc

Ref: http://www.unisa.edu.au/hrm/guidelines/performance.pdf

THE DIFFERENCE BETWEEN MEASURING ACTIVITIES AND MEASURING ACCOMPLISHMENTS

The Beekeepers and Their Bees

Once upon a time, there were two beekeepers who each had a beehive. The beekeepers worked for a company called Bees, Inc. The company’s customers loved its honey and wanted the business to produce more honey than it had the previous year. As a result, each beekeeper was told to produce more honey at the same quality. With different ideas about how to do this, the beekeepers designed different approaches to improve the performance of their hives.

The first beekeeper established a bee performance management approach that measured how many flowers each bee visited. At considerable cost to the beekeeper, an extensive measurement system was created to count the flowers each bee visited. The beekeeper provided feedback to each bee at midseason on his individual performance, but the bees were never told about the hive’s goal to produce more honey so that Bees, Inc., could increase honey sales. The beekeeper created special awards for the bees who visited the most flowers.

The second beekeeper also established a bee performance management approach, but this approach communicated to each bee the goal of the hive–to produce more honey. This beekeeper and his bees measured two aspects of their performance: the amount of nectar each bee brought back to the hive and the amount of honey the hive produced. The performance of each bee and the hive’s overall performance were charted and posted on the hive’s bulletin board for all bees to see. The beekeeper created a few awards for the bees that gathered the most nectar, but he also established a hive incentive program that rewarded each bee in the hive based on the hive’s production of honey–the more honey produced the more recognition each bee would receive.

At the end of the season, the beekeepers evaluated their approaches. The first beekeeper found that his hive had indeed increased the number of flowers visited, but the amount of honey produced by the hive had dropped. The Queen Bee reported that because the bees were so busy trying to visit as many flowers as possible, they limited the amount of nectar they would carry so they could fly faster. Also, because the bees felt they were competing against each other for awards (because only the top performers were recognized), they would not share valuable information with each other (like the location of the flower-filled fields they’d spotted on the way back to the hive) that could have helped improve the performance of all the bees. (After all was said and done, one of the high-performing bees told the beekeeper that if he’d been told that the real goal was to make more honey rather than to visit more flowers, he would have done his work completely differently.) As the beekeeper handed out the awards to individual bees, unhappy buzzing was heard in the background.

The second beekeeper, however, had very different results. Because each bee in his hive was focused on the hive’s goal of producing more honey, the bees had concentrated their efforts on gathering more nectar to produce more honey than ever before. The bees worked together to determine the highest nectar-yielding flowers and to create quicker processes for depositing the nectar they’d gathered. They also worked together to help increase the amount of nectar gathered by the poor performers. The Queen Bee of this hive reported that the poor performers either improved their performance or transferred to another hive. Because the hive had reached its goal, the beekeeper awarded each bee his portion of the hive incentive payment. The beekeeper was also surprised to hear a loud, happy buzz and a jubilant flapping of wings as he rewarded the individual high performing bees with special recognition.

THE MORAL OF THIS STORY IS: MEASURING AND RECOGNIZING ACCOMPLISHMENTS RATHER THAN ACTIVITIES–AND GIVING FEEDBACK TO THE WORKER BEES–OFTEN IMPROVES THE RESULTS OF THE HIVE.

Although it somewhat oversimplifies performance management, the beekeepers’ story illustrates the importance of measuring and recognizing accomplishments (the amount of honey production per hive) rather than activities (visiting flowers). This lesson is designed to help you develop elements and standards that center around accomplishments, not activities.

CONCLUSION

In conclusion of my essay I would like to present a brief model of all what I have discussed above which I am presenting in the form of policy which the company can follow to manage employee performance effectively. The key heads of this policy are Introduction, policy, its scope, the responsibilities and its procedure.

Performance Management is planned year round activity that requires support from the overall company, guidance and mutual efforts, to attain mutually beneficial outcomes for all stakeholders. This whole activity helps to identify contributions made by each individual employee, his or her overall standing and the capability for step forward and growth in the company and it is facilitate by the Human Resource Department by the department managers.

1.Policy:

It is the policy of the company/organization to make sure that the performance management system is working effectively and the performance of the staff/employees is evaluated on the basis of the Performance Management System, carried out on pre-established goals and the performance of the employees against those goals.

All departments should complete their activity for goal setting for the up-coming/new financial year and forward it to the Human Resource Department by designated month e.g. May 15th each year.

2.Scope:

This is applicable to all officers, supervisors and management staff of the company.

3.Responsibility:

It is the responsibility of the Human Resource Department to:

*Initiate this activity, including goal setting; provide assistance to department heads in conducting a mid-year review and the end of the year in annual appraisal in all departments.

*Make sure that proper training is provided to all departments manager and supervisors related to handle the performance management techniques and its process in a proper, reliable manner.

*Ensure that it gives a value added contribution in the development of employee.

*Ensure performance based increments.

*Ensure that performance standards for measurement are expressed and clearly understood by the employees.

*Ensure that the activity to evaluate the performance is fair, just and unbiased manner.

*Ensure the completion of all activities related to performance management and its evaluations within a defined and specified timelines.

4.Procedure:

*The department head initiates the performance evaluation activity for their subordinates which are taking place under the supervision of their heads. They also facilitate the process to make sure that all activities related to performance evaluation are carried out and ended as per written guidelines and timelines.

*The concerned director (e.g. Technical Director) is responsible for carrying out the performance evaluation of Departmental Managers and Department Heads that report directly to him. Later on such evaluations can be reviewed by the Chief Executive Officer.

*At the start of each year it is the responsibility of the Human Resource Department to carry out training on performance management for all departmental heads, to give them an idea about goal setting and its evaluation.

Ref: http://www.archives.gov/records-mgmt/initiatives/appraisal.html

Here I will conclude my essay by a statement which is” Machines can depreciate but human capital is the only asset which is appreciate with the passage of time”

References:

ARMSTRONG, M.nd BARON, A. (2004) Managing Performance: performance management in action .London: Chartered Institute of Personnel and Development.

The University of South Australia. (No date) Performance Management Guidelines [Online]. Available: http://www.unisa.edu.au/hrm/guidelines/performance.pdf [Accessed 2006, Nov 02]

Guidelines for effective performance management (no date) [Online].Available:

www.wellesley.edu/HR/new/VWSite/PerfMgmtGuidelines_01.24.02.doc [Accessed 2006, Oct 20].

National archieves and record administration strategic directions :(2006) Appraisal policy [Online]. Available: http://www.archives.gov/records-mgmt/initiatives/appraisal.html [Accessed 2006, Nov 10].