Performance Management System

What is performance management (PFM)

PfM is a way of systematically managing the performance of individual, group and/or the organization based on the predetermined targets and measurable objectives. It is a holistic process which envisage setting performance targets, measuring performance, conduction gap analysis and root cause analysis and using the resultant leading and lagging indicators for the performance enhancements techniques like training, compensating management.

‘PfM is a means of getting better results from the organization, teams and individuals by understanding and managing performance with in an agreed framework of planned goals, standards and competencies requirements. It is a process of establishing shared understanding about what is to be achieved and an approach to managing and developing people in a way that increases the probability that it will be achieved in a short and longer term.’

In our country, we are still struggling with the implementation of Performance Management Systems. Many people link the term Performance Management System with appraisal system. This is as same as people link communication with telephone only. Similarly, the appraisal system is one such tool in the Performance Management System. Performance Management system is the process of creating and managing a work environment or setting, in which people are enabled to perform to the best of their abilities.

Performance appraisals are periodical review of employee performance. The term appraisal indicates that the main purpose of the system is ‘Appraisal’, which means evaluation. It is a form for reducing the entire years or six months work of an individual in to a number. Number has some great properties. They are intended to render the so-called objectivity and comparability. Moreover, this objectivity and comparability plays havoc in the lives of many employees. It has caused a few people to be promoted and some of them undeservingly, a few others to leave their jobs, and yet a few others to walk into the office every day with low interest and satisfaction and carry on with their jobs.

No two numbers are comparable in appraisals. We cannot say with confidence a rating of four assigned on a five-point scale by a project manager is indicative of the same performance level as a rating of four assigned by the hr manager. The ratings depend on so many factors: the supervisor or manager, his previous background, his personality, expectations, the performer (assessee) and his own background, the way goals are set, the level of the goals, the culture of the organization, etc. Two numbers cannot be comparable. We cannot say that a person who gets a 72 rating on a 100-point system is definitely superior to another who gets a rating of 65 and especially if 65 is from a setting where the performer had many odds to face.

Principles of PfM (Armstron)/ Features of an effective PfM System?

Transparency
Managed development
Mutual respect
Fairness and equity
Organizational climate
Effective context management

Scope of Traditional PfM system

Remedying poor performers and performance
Bridging gaps on performance expectations
Securing equitable rewards and punishments decisions from the management
Softening performance pressures through appropriate planning, scheduling and delegation.