1. Definition of Performance Management Performance management (PM) is a planned process directed toward ensuring that organizational means and processes are in place to maximize productivity of employees through improving their capacity and willingness to perform and providing them all necessary resources and opportunities in that regard.

2. Constituents of performance Performance Management Process Rate of Individual Performance Ability to do Willingness to do Oppor tunity to do x x Stage 1 Planning the performance in the beginning of the performance period Stage 2 Monitoring and supporting the performance during the performance period Stage 3 Appraising the performance at the end of the performance period Stage 4 Taking developmental and administrative decisions on the basis of performance appraisal report (This four stage process is arranged in the form of a cycle called Performance Management Cycle)

3. Performance Management Process (Performance Management Cycle) Stage 1 Planning the performance in beginning of the performance period Stage 2 Monitoring and supporting the performance during the performance period Stage 3 Performance appraisal at the end of the performance period Stage 4 Taking developmental and administrative decisions on the basis of performance appraisal report Collection of information about performance level and comparing the performance outcome with the desired ones Continuously revisiting the support functions Identifying cause of less than optimum performance if so. Giving face-to-face informal feedback and taking developmental & motivational measures where needed Defining performance goals on the basis of job profile Deciding the HRD measures Deciding the rewards, pay increments etc. Deciding the promotions Deciding the disciplinary measures, rotation, layoff etc.

4. Who are the role-players in Performance Management process? Stage 1 Planning the performance in beginning of the performance period Stage 2 Supporting the performance during the performance period Stage 3 Performance appraisal at the end of the performance period Stage 4 Taking developmental and administrative decisions on the basis of performance appraisal report Collection of information about performance level and comparing the performance outcome with the desired ones Continuously revisiting the support functions Identifying cause of less than optimum performance if so. Giving face-to-face informal feedback and taking developmental & motivational measures where needed Defining performance goals on the basis of job profile Deciding the HRD measures Deciding the rewards, pay increments etc. Deciding the promotions Deciding the disciplinary measures, rotation, layoff etc.

5. Role-players in PM Process Stage 1 Planning the performance in beginning of the performance period Stage 2 Supporting the performance during the performance period Stage 3 Performance appraisal at the end of the performance period Stage 4 Taking developmental and administrative decisions on the basis of performance appraisal report Individual Line Managers HRD Professionals Top Management

6. From the above diagram, it is clear that performance management concerns everyone in the business not just managers. It rejects the assumption that only HR function is responsible for the performance management process and replaces it with the belief that responsibility is shared between managers, individuals/teams and the HR.

7. Appraisal Period Formal performance evaluations are usually prepared at specific intervals. Although there is nothing magical about the period for formal appraisal reviews, in most orga­nizations they occur either annually or semiannually. Even more significant, however, is the continuous interaction (primarily informal), including coaching and other developmental activities, that continues throughout the appraisal period. Performance feedback once a year is just not good enough. Managers should be conditioned to understand that managing performance is a continuous process that is built into their job every day.

8. Difference between PM & traditional PA Traditional performance appraisal can be defined as the formal assessment and rating of individuals by their managers at usually an annual review meeting, mostly without proper goals to achieve. Thus, traditional performance appraisal schemes mostly exist in isolation; there is little or no link between them and the needs of the business.

9. As a result, such appraisal is mostly only backward-looking, concentrating on what had gone wrong, rather than looking forward to future development needs. For this reason, performance appraisals too often degenerate into just a dishonest annual ritual and line managers have frequently rejected it as being time- consuming and irrelevant.

10. Performance management, on the other hand, is a much wider, more comprehensive and more natural process that focuses on the future. It is certainly not an isolated system, run by the HR department, that functions once a year (via the annual appraisal) and is then forgotten.

11. Rather it is a continuous and evolutionary process, in which performance improves over time. It works through clarifying mutual expectations of all stake holders in the organization and emphasizes the support role of the line managers, who are expected to act as coaches rather than judges.

12. In its fullest sense it: –encourages self-management of individual performance – requires a management style that is open, honest and encouraging –provides two-way communication between the employees and the management –requires continuous mutual feedback

13. Discussion Questions 1.Draw the performance management cycle and explain its various stages. 2.Modern performance management system based on four stage cycle is very much different from the traditional performance appraisal system. Discuss.