ProPerMan Hand Out 1 (B)

Performance Management
ProPerMan Hand Out 1 (B)
Performance management (PM) includes activitieswhich ensure that goals are

consistently being met in an effective and efficient manner. Performance
management can focus on the performance of an organization a department, employee,
or even the processes to build a product or service, as well as other areas.
Application
This is used most often in the workplace, can apply wherever people interact—schools,
churches, community meetings, sports teams, health setting,[1] governmental agencies,
social events, and even political settings—anywhere in the world people interact with
their environments to produce desired effects. Armstrong and Baron (1998) defined it as
a "strategic and integrated approach to increase the effectiveness of companies by
improving the performance of the people who work in them and by developing the
capabilities of teams and individual contributors." A performance management system is
often used by the managers in order to align the goals of the company to the goals of
their employees, thereby ensuring productivity.
It may be possible to get all employees to reconcile personal goals with organizational
goals and increase productivity and profitability of an organization using this process.
[2]
It can be applied by organizations or a single department or section inside an
organization, as well as an individual person. The performance process is appropriately
named the self-propelled performance process (SPPP).[citation needed]
First, a commitment analysis must be done where a job mission statement is drawn up
for each job. The job mission statement is a job definition in terms of purpose,
customers, product, and scope. The aim with this analysis is to determine the
continuous key objectives and performance standards for each job position.
Following the commitment analysis is the work analysis of a particular job in terms of
the reporting structure and job description. If a job description is not available, then a
systems analysis can be done to draw up a job description. The aim with this analysis is
to determine the continuous critical objectives and performance standards for each job.
Werner Erhard, Michael C. Jensen, and their colleagues have developed a new
approach to improving performance in organizations. Their model stresses how the
constraints imposed by one's own worldview can impede cognitive abilities that would
otherwise be available. Their work delves into the source of performance, which is not
accessible by mere linear cause-and-effect analysis. They assert that the level of
performance that people achieve correlates with how work situations occur to them and
that language (including what is said and unsaid in conversations) plays a major role in
how situations occur to the performer. They assert that substantial gains in performance
are more likely to be achieved by management understanding how employees perceive
the world and then encouraging and implementing changes that make sense to
employees' worldview.
SDG ; ProPerMan H.O 1(B) Page 1

Benefits
Managing employee or system performance and aligning their objectives facilitates the
effective delivery of strategic and operational goals. Some proponents argue that there
is a clear and immediate correlation between using performance management
programs or software and improved business and organizational results.[citation needed] In
the public sector, the effects of performance management systems have differed from
positive to negative, suggesting that differences in the characteristics of performance
management systems and the contexts into which they are implemented play an
important role to the success or failure of performance management.[4][5]
For employee performance management, using integrated software, rather than a
spreadsheet based recording system, may deliver a significant return on investment
through a range of direct and indirect sales benefits, operational efficiency benefits and
by unlocking the latent potential in every employees work day (i.e., the time they spend
not actually doing their job). Benefits may include:
Direct financial gain
 Grow sales
 Reduce costs in the organization
 Stop project overruns
 Aligns the organization directly behind the CEO's goals
 Decreases the time it takes to create strategic or operational changes by
communicating the changes through a new set of goals
Motivated workforce
 Optimizes incentive plans to specific goals for over achievement, not just business
as usual
 Improves employee engagement because everyone understands how they are
directly contributing to the organizations high level goals
 Create transparency in achievement of goals
 High confidence in bonus payment process
 Professional development programs are better aligned directly to achieving business
level goals
Improved management control
 Flexible, responsive to management needs

 Displays data relationships
 Helps audit / comply with legislative requirement
 Simplifies communication of strategic goals scenario planning
 Provides well documented and communicated process documentation
Organizational development
In organizational development (OD), performance can be thought of as Actual Results
vs Desired Results. Any discrepancy, where Actual is less than Desired, could

constitute the performance improvement zone. Performance management and
improvement can be thought of as a cycle:
1. Performance planning where goals and objectives are established

2. Performance coaching where a manager intervenes to give feedback and adjust
performance
3. Performance appraisal where individual performance is formally documented and
feedback delivered
A performance problem is any gap between Desired Results and Actual
Results. Performance improvement is any effort targeted at closing the gap between
Actual Results and Desired Results.
Other organizational development definitions are slightly different. The U.S. Office of
Personnel Management (OPM) indicates that Performance Management consists of a
system or process whereby:
1. Work is planned and expectations are set

2. Performance of work is monitored
3. Staff ability to perform is developed and enhanced
4. Performance is rated or measured and the ratings summarized
5. Top performance is rewarded[6]
In companies
Many people equate performance management with performance appraisal. This is a
common misconception. Performance management is the term used to refer to
activities, tools, processes, and programs that companies create or apply to manage the
performance of individual employees, teams, departments, and other organizational
units within their organizational influence. In contrast, performance appraisal refers to
the act of appraising or evaluating performance during a given performance period to
determine how well an employee, a vendor or an organizational unit has performed
relative to agreed objectives or goals, and this is only one of many important activities
within the overall concept of performance management.
At the workplace, performance management is implemented by employees with
supervisory roles. Normally, the goal of managing performance is to allow individual
employees to find out how well they had performed relative to performance targets or
key performance indicators during a specific performance period from their supervisors
and managers.
Organizations and companies typically manage employee performance over a formal
12-month period (otherwise known as the formal company performance period).
The results of performance management exercises are used in:
 Employee development planning to select the most appropriate and suitable

development intervention to improve employees' knowledge, skills and behavior

 Factual basis for compensation and rewards (pay raise & bonuses being the most
common)
 Factual basis in consideration with other factors for mobility (Example: transfers and
promotions)

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Performance Management

ProPerMan Hand Out 1 (B)

Performance management (PM) includes activitieswhich ensure that goals are

SDG ; ProPerMan H.O 1(B) Page 1

 Flexible, responsive to management needs

SDG ; ProPerMan H.O 1(B) Page 2

1. Performance planning where goals and objectives are established

1. Work is planned and expectations are set

 Employee development planning to select the most appropriate and suitable

SDG ; ProPerMan H.O 1(B) Page 3

SDG ; ProPerMan H.O 1(B) Page 4

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