Performance Management is a continuous process of communication between a supervisor and an employee that provides feedback, accountability, and documentation for performance outcomes of the employee. It helps employees to fully contribute their talents toward organizational goals. Supervision and oversight of employees, departments, and organizations are made efficiently and effectively. All the significant activities of HR are for the development of high performance and employee motivation. This communication process includes clarification of expectations, setting objectives, identifying goals, providing feedback, and reviewing of results.

Need For Performance Management:

An effective performance management process can help employees to show their talent and turn your small business into the threat to your biggest competitors.

  1. Performance Management
  2. Performance Assessment
  3. Efficient Planning
  4. Monitoring
  5. Setting up of a strategic goal
  6. Drives employee development

Objectives of performance management:

  1. Determine the objective of an organization.
  2. Enable the employees towards the achievement of superior standards.
  3. Identification of knowledge and skills required for performing the job efficiently.
  4. Boosting the performance by encouraging employee empowerment, motivation.
  5. Promoting a two-way system of communication between the supervisors and the employees so that they can perform their task more efficiently.
  6. Identifying and resolving the barriers to effective performance through constant monitoring, coaching and development interventions.
  7. Helps in formulating, managing and implementation of strategies.

The scope of performance management:

  1. Strategy Formulation: Strategies are made from previous performances of employees and organization. It makes the basis for future strategies
  2. Manage the strategy implementation process: It also compares standards and actual performance to take timely actions when needed.
  3. Designing and assigning SMART action plans: It will help to inspire and persuade employees and motive of achieving organizational objectives.
  4. Check position: Timely check on the actual position of an organization is made during the strategic management process.
  5. Consolidated Performance Reports:  Superior made consolidated reports to enable extensive analysis.
  6. Communicate direction to rest of the employees: Monitoring includes a two-way communication between superior and employees in which superior gives directions to employees for the clarification of expectations, setting objectives, identifying goals, providing feedback, and reviewing of results.
  7. 360-degree feedback culture: Superiors, management staff and also the customers provide 360-degree feedback to employees.
  8. Benchmark the performance of different organizations, plants, departments, teams, and individuals: This will motivate the staff to work more efficiently to beat their competitors.

 

Difference between Performance Management and Performance Appraisal:

BASIS FOR COMPARISON PERFORMANCE MANAGEMENT PERFORMANCE APPRAISAL
Meaning Performance Management is a continuous process of communication between a supervisor and an employee that provides feedback, accountability, and documentation for performance outcomes of the employee. Performance Appraisal means the analysis of an employee’s performance and their caliber for future growth and development.
What is it? It is a process. It is a system.
Nature Supple Rigid
Type of tool Strategic Tool Operational Tool
Owned by Managers Human Resource Department
Conducted Continuously Annually
Approach Holistic Individualistic
Focused on Qualitative Aspects Quantitative Aspects
Corrections Prospective Retrospective
Ensure Bring performance improvements. Ensure objectivity in ratings.
Exercise timings continuous process with a quarterly performance review  annual exercise.
Inclusion of  performance improvements through HR decisions promotions, rewards, interventions and placements, training and development

 

 

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