PERFORMANCE & COMPENSATION MGT (HRM 751)

CHAPTER 2: THE PERFORMANCE MANAGEMENT PROCESS

Prepared by: Shirley Angie Sitimin

2012849092 BM7703F

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PERFORMANCE MANAGEMENT PROCESS (PMP):OVERVIEW

Where Performance Mgt ‘Fits’?

Definition of PMP

Purposes of PMP

Responsibilities of Manager in PMP

Responsibilities of Supervisor & Employee in PMP

Various Diagram of PMP

•Performance Planning

•Managing Performance

•Performance Review/Appraisal

•Performance Reward

•Challenges of PMP

•Conclusions

•Recommendations

WHERE PERFORMANCE MANAGEMENT "FITS"?

This is a pyramid showing some of the key questions employees of organization ask to employer.

Often employees do not know what are expected from them.

A fundamental step in performance management is communicating job expectations. Absent of clear expectations, employees do not have the required tools to perform their job functions.

Roger D'Aprix (2008) has identifies six key questions employees need answered by their boss in order to perform their job effectively.

PERFORMANCE MANAGEMENT PROCESS (PMP) DEFINITION

A continuous negotiation process that calls for effective communication (Acuff, 2008).

Align employee's goals & to those of the organization ( Shafudah, 2010).

PMP is defined as a continuous process where supervisors and employees work together to establish objectives, monitor progress toward these objectives and assess results. With this process, employees receive regular feedback and coaching which is a vital development process for all employees (KSU, 2009).

Armstrong & Baron (2005) emphasized that PMP is a strategy which relates to every activity of organization and its implementation depends on organizational context and can differ from organization to organization.

An on going cycle that underscores the need for supervisors & employees to work together in determining the organization & employee's goals.

A cycle with discussions varying year to year based on changing objectives ( Raymond, 2006).

PURPOSES OF PMPTo develop people & improve performance

Allows individuals to know what is expected of them by the organisation they work in and so they know what they need to do to help the organisation to be a success and for them to participate towards that success.

To provide honest & accurate formal evaluations

PMP purpose is to allow for a two way feedback between supervisor and employee to aim at supporting rewards or punishment for performance practices.

To drive capability development. It is typically designed to help employees understand what they need to learn and how they need to learn it.

RESPONSIBILITIES OF MANAGER IN PMP

Take an active role in the process

Set realistic goals that aligned with the company strategy

Measure result objectively

Identify needs & resources for employees development

Responsible to support the process throughout the rating period

RESPONSIBILITIES OF SUPERVISOR & EMPLOYEE IN PMP

Supervisor

1. Provide on going performance feedback

2. Make clear company direction

3. Shared accountability. supervisor needs to provide open, honest and constructive feedback to employee on their performance

4. Use a variety of methods and tools when monitoring and giving feedback about employee's performance

5. To assist the employee throughout the appraisal period in improving aspects of performance identified as needing improvement.

Employee

1. To actively giving inputs

2. Discuss any concerns and questions about any part of their job or the performance management process with his or her supervisor

3. Responsible for continuous self-assessment

4. Responsible to take personal ownership for development by identifying and participating in career development

5. Employee need to mutually agree on performance expectations and competencies during the developmental plan with supervisor

VARIOUS DIAGRAM /MODEL OF PMP

Note: There are 4 models shown in the slides

WHY THERE ARE VARIOUS MODEL OF PMP?

It is designed based on the suitability of the company

The situation is different from one organization to another/within organization

The formulation of such model needs to be approached from a participatory perspective

Not all types of performance management process model are right for companies. Luckily there are several different types that can be chosen by an organization which will work best for the company.

PERFORMANCE MANAGEMENT PROCESS DIAGRAM (COMMON MODEL)

WHY THIS MODEL? It recognizes the important of coaching as it

connects each stage of the model

It calls for the alignment of employee's goals to those of the organization

Easy to understand & not crowded as it is 4 steps only

Can be implement easily

THE PROCESS:PERFORMANCE PLANNING

The performance planning process, where individual objectives are linked to organisational goals, is the typical starting point of the cycle and goal-setting usually occurs in line with annual standard review cycles (Suutari and Tahvanainen, 2002).

According to Aguinis (2007), below are the elements that been look up during the performance planning stage:

Results

What needs to be done

Needs to include the key accountability, specific objectives & performance standards

Behaviours

How job is done

A consideration of behaviours includes discussing competencies which is KSAs

Developmental Plan

Identifying areas that need improvement & setting goals to be achieved in each area

Agree on the development plan that have been discuss

MANAGING PERFORMANCE

Should be done throughout the year

Give continuous feedback & learning to employees

Employee shares or inform on any successes or problem to success

In managing performance, supervisor gives employee an opportunity to express their needs, concern and expectations

WHAT SHOULD SUPERVISOR COACH?

Current performance

- "What": Objectives, Outcomes- "How": Behaviours,

Competencies

Development- Building future

capability- Improving personal

skills

• Career aspirations

-Prepare for potential future assignments

- Using capabilities to choose a better path

PERFORMANCE REVIEW/APPRAISAL

Involves the meeting between employee & manager to review their assessment

Provides a formal setting in which employee receives feedback on his performance

Performance appraisal summarizes the employee's contributions over the entire appraisal period which is one year period

When doing performance review, each employee can be placed into one of the three categories which are:

• High Performer - Consistently exceeds standards, proactively problem solves, takes appropriate initiative, and is a positive influence on others as well as a good role model.

• Middle Performer - Meets standards, responds well to others’ problem solving ideas, strives to do a good job and may need more experience or coaching. May be influenced either by the high or the low performer.

• Low Performer - Does not consistently meet standards, may respond to problems in a negative way. May not recognize the need for performance improvement.

6 STEPS FOR CONDUCTING PRODUCTIVE PERFORMANCE REVIEWS

Identify what employee has done well & poorly

Solicit feedback

Discuss the implications of changing behaviours

Explain how skills used in past achievements can help overcome any performance problems

Agree on an action plan

Set a follow-up meeting & agree on behaviours, actions, attitudes to be evaluated

Note: Example of 2 Appraisal forms shown in the slides

PERFORMANCE REWARD

A key value drivers

Uses non-cash recognition to reward good performance

Give rewards based on employee hard work and outstanding performance

Rewarding performance should be an on-going managerial activity and not just an annual pay-linked ritual

According to Armstrong (2002), his conceptualisation of ‘total reward’, this comprises both financial and non-financial elements

THE PERFORMANCE TIMELINE

The performance management process timeline is different from organization to organization. It is depends on the company to decide when to start the performance management process.

The timeline is either done yearly or annually, where yearly is starting from January to December while annually is on January to June (first half) and the other is July to December (second half).

The performance management process will work in one cycle and covers 12 months period consistent with individual's performance year starting from the date of job confirmation.

CHALLENGES TO EFFECTIVE PMP

To ensure everyone's performance is managed in all areas of their work

To make sure the PMP was carried out in an honest manner

Supervisor & employee need to have good negotiating skills

Not all organisations are led by democratic leaders where all employees are treated with trust

Change management is a challenge in itself. In order to manage performance one has to be mindful of changes in the environment and to adapt to it by managing the change

CONCLUSIONS It can be concluded that in order for the process to

make sense, there should be a supervisor and employees for successful implementation of the process

There is a need for some leadership and management skills to be applied as well as the consideration of personal attitude and behaviour to ensure that the process is been lead well.

RECOMMENDATIONS

Send managers & supervisors for training (Example: Leadership training, Communication skills training)

Do proper documentations for the PMP

Do proper research which PMP is most suitable for the organization

To develop a strategic plan accompanied by employee performance plan with clear and measurable targets

Improve their systems, rules and procedures to facilitate effective employee performance.

Q & A sessions

-Thank you for your kind attention-