PERFORMANCE

MANAGEMENT
UNIT- 2
Mrs. HIMAKUMARI .V
 MANAGING
PERFORMANC
PERFORMANCE E
PLANNING  Observation
 Visionary  Problem Solving
 Goal Setting  Feedback APPRAISING
 Negotiating
 Listening PERFORMANC
E
 Rating
 Review
PM  Documentation
PROCESS

REWARDING
PERFORMANC DEVELOPING
E PERFORMANCE
 Recognition  Coaching
 Praising  Counselling
 Mentoring
Performance Management
Cycle
1. PLANNING
a) Defining Stage
b) Feedback Stage
c) Approval Stage

2. COACHING
a) Organize meetings on a timely, regular basis
b) Provide necessary training, coaching and solutions
c) Solicit feedback on both sides
d) Revisit objectives ad necessary

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3. REVIEWING
a) Reviewing employee performance
b) Reviewing performance management process
c) Reviewing overall goal completion
d) Giving actionable feedback
4. ACTION
a) Reward and Recognition
b) Setting the stage for next years performance management
cycle

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DEMING’S MODEL
 William Edwards Deming.

 Deming cycle or PDCA or Plan-Do-Check-Act.

 One of the first formalized approaches to utilize an

iterative approach to improving processes and it

still serve as a fundamental today for continuous

improvement.
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●Plan: In this step, you investigate the current situation in order to fully understand the nature of the problem being
solved. Be sure that you develop a plan and a framework to work from, and specify the
desired outcomes and results.

●Do: To identify the real problem by analyzing the data and defining and implementing a solution
plan. The PDCA cycle focuses on smaller, incremental changes that help improve processes with
minimal disruption. You should start with a small-scale pilot so as not to disrupt the organization
should the solution not work as expected.

●Check: To monitor the effect of the implementation plan and find countermeasures if necessary
to further improve the solution. You should do a check during implementation to make sure that
the project’s objectives are being met. Do a second check upon completion to allow for successes
and failures to be addressed, and for future adjustments to be made based on lessons learned.

●Act: Implement your solutions and recommendations. Decide if the solution is effective, and either integrate it
into standard work practices or abandon it. If you abandon it, you should ask what you’ve learned from the process
and restart the cycle.
 ACT PLAN

IMPLEMENT INVESTIGATE
A B
SOLUTION AND THE CURRENT
RECOMMENDATI SITUATION C D
ON

CHECK DO

MONITOR ANALYZE
THE
DATA
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Four Elements
 Appreciation of a system
 Knowledge of Variation
 Theory of Knowledge
 Understanding of Psychology

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In more detail the four elements:

Appreciation of a System: A business is a system. Action in one part of the system will have effects in
the other parts. We often call these “unintended consequences.” By learning about systems we can
better avoid these unintended consequences and optimize the whole system.

Knowledge of Variation: One goal of quality is to reduce variation. Managers who do not understand variation
frequently increase variation by their actions. Critical to this is understanding the two types of variation —
Common cause which is variation from the system and Special cause which variation from outside the system

Theory of Knowledge: There is no knowledge without theory. Understanding the difference between theory and
experience prevents shallow change. Theory requires prediction, not just explanation. While you can never prove
that a theory is right, there must exist the possibility of proving it wrong by testing its predictions.

Understanding of Psychology: To understand the interaction between work systems and people, leaders must
seek to answer questions such as: How do people learn? How do people relate to change? What motivates
people?
Deming’s theory of profound knowledge is a management philosophy grounded in systems theory. It is based on
the principle that each organization is composed of a system of interrelated processes and people which make up
the system's components. The success of all workers within the system is dependent on management’s capability
to orchestrate the delicate balance of each component for optimization of the entire system.
THE TORRINGTON & HALL
MODEL
DETERMINE PERFORMANCE
EXPECTATIONS

MANAGING SUPPORTING
PERFORMANCE PERFORMANCE
STANDARDS

REVIEW
&
APPRAISAL
PERFORMANCE 22
The Torrington Hall Model

1.Determine performance expectations

- Ensure staff are aware of the performance standards expected of them
- Ensure managers are aware of the impact of their behaviour on others
- Organizational, departmental and individual
2.Supporting performance
- From informal interaction between managers & staff to the provision of resources & systems which
facilitate achievement of organizational, departmental individual targets
3.Review & appraisal
- Often synonymous with performance management
- The formal part of the cycle
- An appropriate, equitable
- process (more in HRM)
4.Management of performance standard
- Actions taken to address issues which are highlighted during reviews linked to
- Targets/productivity
- Skills/competences
- Career development
- Pay/recognition
Characteristics of healthy
organisation
1. Effective sharing of goals
2. Great teamwork
3. High employee morale
4. Strong leadership
5. Handles poor performance

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Characteristics of Healthy Organization

1.Effective Sharing of Goals

A healthy organization shares its business goals with employees at every level of the organization.
Management shares goals with employees and gets them on board with the mission and vision of the
organization. Employees and managers understand what is required to reach these shared goals and
make every effort to achieve them.

2.Great Teamwork
Another characteristic is teamwork. Healthy companies know how to develop teams that collaborate to
achieve common goals. Employees and managers readily offer their assistance to each other to meet
corporate objectives.

3.High Employee Morale

Healthy organizations possess high employee morale. Employees value their positions in the
organizations and desire to work there for a long time. Productivity is high and organizational events
are enjoyable and successful.
4.Strong Leadership
Good leadership is one of the main characteristics of a healthy organization. Employees have good
relationships with management that are based on trust. Managers know how to get employees to
function together. When correction is needed, employees readily accept the constructive criticism
offered by leaders.

5.Handles Poor Performance

Companies confront poor performance instead of ignoring it. Organizations take corrective actions to
improve performance. Upper-level management values the input of employees who make suggestions
on how to improve productivity and achieve high performance rates. Companies may even bring in
specialists to detect problems and offer solutions.
Performance Reviews and
feedback
 Performance review is a formal assessment in
which a manager evaluates an employee’s work
performance, identifies strength and weakness,
offers feedback and set goals for future
performance.

 Performance reviews / Performance Appraisal /

Performance evaluation

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How should employees
prepare for Performance
Reviews
1. Prepare Notes
2. Brainstorm examples
3. Self- evaluate
4. Come with question

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How Should Employees Prepare for Performance Reviews
Regardless of whether a performance review is formal or casual, employees should be encouraged to
prepare for it. Here are a few suggestions to offer employees that will help the review be successful
for both parties:

Prepare notes. Encourage employees to make notes before each performance review. They should
document topics they want to discuss, strengths, weaknesses, and goals.

Brainstorm examples. Employees should be able to share concrete examples of how they have met
goals set at the last review and how they have improved overall.

Self-evaluate. Employees should practice self-evaluation by giving themselves a mock performance

review. They should identify new strengths, weaknesses, accomplishments, and goals.

Come with questions. Employees should have a safe environment to ask questions in performance
reviews. Preparing questions ahead of time can help ensure everything that needs to be asked is
asked.
PEFORMANCE FEEDBACK
Performance feedback is critical to helping employees to
understand their expectation, make adjustments and
get the coaching necessary to improve and succeed.

TYPES
1. Formal feedback
2. Informal feedback

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Principles of feedback
1. Clarity
2. Promptness
3. Validity
4. Completeness
5. Relevance
6. Formal Channel
7. Solicited
8. Descriptive
9. Specific
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6. Informality: Efficacy of feedback also depends on the use of information
channels along with formal channels. If there is any informal channel for providing
feedback, employees come forward to show the reaction spontaneously.

7. Solicited: Feedback must be spontaneous. This principle is attained when the

receiver willingly responds to the sender’s message.

8.Descriptive: To make the feedback clear and worthwhile to the sender, it should
be descriptive in nature. In feedback, the receiver should maintain a logical
sequence of messages he received and incorporate his opinion in detail.

9. Specific: The receiver should convey his response specifically. Specific response
helps the sender to understand the receiver's attitude towards the message.
Situations requiring
feedback
1) Providing specific performance pointers.
2) Giving corrective guidance.
3) Letting someone know the consequences of
behaviour.
4) Encouraging positive behaviour.
5) Encouraging and supporting someone who is
doing well.
6) Letting team member know when they have done
something positive. 38
360 Degree Feedback and its relevance,
A 360-degree feedback is a process through which feedback from an employee's subordinates, colleagues, and
supervisor, as well as a self-evaluation by the employee themselves is gathered. Such feedback can also include,
when relevant, feedback from external sources who interact with the employee, such as customers and suppliers
or other interested stakeholders. 360-degree feedback is so named because it solicits feedback regarding an
employee's behavior from a variety of points of view . It therefore may be contrasted with "downward feedback,
or "upward feedback" delivered to supervisory or management employees by subordinates only.

Organizations have most commonly utilized 360-degree feedback for developmental purposes, providing it to
employees to assist them in developing work skills and behaviors. However, organizations are increasingly using
360-degree feedback in performance evaluations and employment decisions . When 360-degree feedback is used
for performance evaluation purposes, it is sometimes called a "360-degree review".

There is a great deal of debate as to whether 360-degree feedback should be used exclusively for development
purposes or for evaluation purposes as well.This is due primarily to feedback providers' subjectivity and
motivations, inter-rater variations, and whether feedback providers have the ability to fairly evaluate attainment of
work and organizational objectives. While these issues exist when 360-degree feedback is used for development,
they are more prominent when employers use them for performance evaluation purposes, as they can unfairly
influence employment decisions, and even lead to legal liability.
360 Degree Feedback and its
relevance
1. Valuable development tool
2. Multiple sources
3. Motivation
4. Company competencies
5. Customer service
6. Method over outcome
7. Large team workers
8. Safe environment
9. Improves communication
10.Addresses personality and behaviour
11.Career development 40
Relevance of 360 degree feedback
A 360 feedback system is implemented well, it can have a number of benefits for the individual, their team and the
organization:

Valuable development tool: The 360 feedback system shows the subject the differences between how they see
themselves and how others see them. This increases their self-awareness which means that the subject is more conscious
of their personality, strengths, weakness, beliefs, motivations etc. With this information they can adjust their behavior and
identify their training needs. Consequently, the subject can become more effective in their role and for the role they may
be aiming for.

Multiple sources: A variety of people have contributed to the feedback, so the information is thought to be more valid
and objective than feedback from, for example, just one manager. Also, the feedback is more likely to be accepted if
multiple individuals "agreed" on the answers.

Motivation: Knowing multiple individuals gave the same feedback provides the subject with the drive to develop.

Company competencies: The company's fundamental competencies will be reinforced, not only for the subject, but also
for the respondents. During the survey the respondents will be answering questions which remind them of what behaviors
and values are important to the company.
Customer service: Customer service can improve if customers and clients have completed the survey.

Method over outcomes: The 360 feedback system assesses the method rather than the outcome. It's more
important to do something the right way even if it doesn't produce the correct outcome - nothing is ever certain so
by focusing on the method you give yourself the best chances of producing the preferred outcome. For example, a
tight deadline is coming up, but a manager tells his staff that they can only work a maximum of one hour overtime
a day and no work is allowed on the weekends. The manager has made this decision because he believes that
stress and overworking can increase the chances of mistakes being made and of producing poorer outcomes.

Large teams or autonomous workers: This type of feedback is significant in organizations where the subject
works independently or with several teams because their manager will be unable to observe everything.
Safe environment: Answers are safely given as the system is confidential. A lot of the feedback would be too
uncomfortable for colleagues to share and it would probably never be given if the system was not anonymous.

Improves communication: Communication increases between the team because the subject understands how
others perceive them which in turn assists with teamwork.

Addresses personality and behaviour: It helps subjects understand how their behaviour affects themselves,
their department and the organization. This is also useful for reducing conflict.

Career development: The organization benefits by this feedback improving career development planning and
execution of this. This also promotes the organization's assurance of employee development which aids
recruitment and staff retention
Steps in giving a
Constructive Feedback
1) Identify the specific area for
feedback
2) State the purpose and the goal
3) Describe specifically what you
observed
4) Describe your reaction to the
observation
5) Give the person a chance to
respond 44
Step 1: Identify the specific area for feedback

Before delivering feedback, identify the issue, success or area for improvement that you would like to address.
This will help you prepare specific examples, and keep the interaction objective. For example, if you are looking
to guide a new sales representative to hitting quota, it is important to think about where the area for
improvement is. The more specific,
the better. Instead of discussing their entire sales flow, it would be better to focus on the deal stage where you see
opportunities falling off.

Step 2: State the purpose and share the goal

During the conversation (or video or digital note if using feedback in WorkPatterns), start by stating the purpose of
feedback and the positive outcome you are seeking. This offers context and primes the recipient to hear what
insight you have to offer as opposed to feeling criticized out of the blue. It also highlights the mutually beneficial
goal and ensures alignment.

Step 3: Describe specifically what you have observed

Set the stage and objectively highlight the observation you made. Do not be vague. Give concrete, specific
examples so the person receiving feedback has a direct reference point. An example of how detailed to be might
sound like: “I noticed when you were on the phone with John Doe this morning, there was a lot of hesitation in
your voice when you explained why our company doesn’t offer discounts.”
Step 4: Describe your reaction to the observation

While it might seem obvious or redundant, it is important to share your personal reaction. Oftentimes, the person who needs the
feedback may not realize the “why” behind your feedback. Offering insight will further reassure them that it is not personal and
you are there to help. Continuing the above example, this might sound like: “When I heard your hesitation, my reaction was that
you sound uncertain. Putting myself in John Doe’s shoes, it would be difficult for me to buy from someone that did not exude
confidence.”

Step 5: Give the person a chance to respond

As much as we try to be objective, there are always two sides to every story. Sometimes, observing a situation as a third party
could end up in misinterpretation. This is why it is important to encourage the person to respond to your initial observation. That’s
why we encourage feedback to be exchanged asynchronously in WorkPatterns, it gives the recipient a chance to digest your
feedback and consider your point of view. This often leads to better follow up conversations. They may bring up missing details
that change your feedback altogether! If not, this also gives you a good sense of how they are feeling and allows you to address
any of their concerns, before moving on.

Step 6: Offer specific suggestions

Once again, the difference between criticism and constructive feedback is whether it results in a better outcome. After sharing the
area of improvement, giving specific suggestions on how to improve, will empower the individual to act upon it and course-correct
immediately. This means that instead of saying: “Try not sounding so hesitant next time!”, you might want to say something like:
“It is better to say ‘I’m actually not sure, but I’ll find out’ with confidence than to power through the conversation hesitantly.”
Step 7: Summarize and set a time for follow up

Recap the conversation and set up a time to check-in. This gives a future time frame where
you can check in. In WorkPatterns, we encourage quick asynchronous feedback on a bi-
weekly cadence. If the suggestions didn’t work, it will also give you a chance to receive
feedback and iterate on your tips. Additionally, it will incentivize the person more to
implement your feedback if they know you are going to follow up on that specific area.

Step 8: Reiterate your support and gratitude

When ending the conversation or wrapping up the meeting, make sure to express your
support and gratitude. Constructive feedback is all about making sure the recipient is
empowered to take action and improve. By sharing your appreciation, it prevents the
feedback from being a negative encounter and reminds the employee that you are there to
support them.
 Role of a Transformational
Leader
A transformational leader is someone who: Encourages the
motivation and positive development of followers. Exemplifies
moral standards within the organization and encourages the same
of others. Fosters an ethical work environment with clear values,
priorities and standards.

Transformational leaders inspire and motivate their workforce

without micromanaging — they trust trained employees to take
authority over decisions in their assigned jobs. It’s a management
style that’s designed to give employees more room to be creative,
look to the future and find new solutions to old problems.
Employees on the leadership track will also be prepared to become
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transformational leaders themselves
A transformational leader is
someone who:
1. Encourage the motivation and positive
development of followers.
2. Exemplifies moral standards within the
organisation.
3. Fosters an ethical work environment with clear
values priorities and standard.
4. Build company culture by encouraging employee
to move from an attitude of self interest to
common good.
5. Holds an emphasis on authenticity, co-operation 49
 Advantages of
Transformational
Leadership
1. Keeps employees motivated as they are inspired to
perform better.
2. Individual mentoring ensures team members have the
opportunity to learn new skills and grow.
3. Transformational leadership encourages members to be
creative and do interesting work.
4. It builds trust and enhances enthusiasm within the team.
5. Transformational leadership requires leader to explain the 50
Disadvantages of
Transformational
Leadership
1. Transformational leadership focuses on long term
vision through inspiration and hence might miss
the minute detail.
2. Too much passion and motivation can sometimes
disrupt logical thinking.
3. Transformational leaders can sometimes be bad
for companies, as team members are too engaged
with team leaders and lose focus of company
goals. 51
Performance Goal Setting
Performance goals enable employees to plan
and organize their work in accordance with
achieving predetermined results or outcome.

 Develop job knowledge and skill that help them thrive in

their work, take on additional responsibilities or pursue
their career aspiration.
 Support or advance the organization’s vision, mission,
values, principles, strategies and goals.
 Collaborate with their colleagues with greater transparency
and mutual understanding.
 Plan and implement successful projects.
 Remain resilient when roadblocks arise and learn from their 52
 Without setting clear performance goals, employees may
feel aimless about prioritizing their work.

 Although focused attention on performance goals typically

happens during the annual evaluation process, goal setting
really pays off when employees monitor their goal progress
throughout the year, discuss the status of goals with their
manager on an ongoing and regular basis and purpose and
make adjustments to remain on track towards completion.

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GOAL FRAMING
1. Clarity
2. Challenges
3. Commitment
4. Feedback

SMART MODEL
5. Specific
6. Measurable
7. Attainable
8. Relevant
9. Time- Bound
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Goal Framing
Goals can be framed in several different types of ways that affect how well people learn and perform. When
goals are challenging, it is important to help people to frame them as a challenge from which they may learn,
rather than a threat in which failure is foreseeable. The goal framings are standing on four important Pillars

1.Clarity
A clear goal is one that can be measured and leaves no room for misunderstanding. Goals should be very explicit
regarding what behavior is desired and will be rewarded. The clear goal reduces work order errors by 10-30% in
general. It also creates a system for ensuring that every team member is informed of changes in policy, changes
in hours or other important information i.e. it improves communication within team members.

2.Challenges
A goal should be challenging but must be achievable. By positively rewarding the achievement of challenging
goals, would encourage employees to achieve more and meet new milestones. At the time of goal settings, it is
most important to identify rewards and awards that are appropriate for the special achievement of challenging
goals versus normal expectations.
3.Commitment
In order for goals to be effective, they need to be agreed upon. The goal should be in line with the general
established expectations as per role and level of an individual. The employee and employer of an organization
must both be committed to using the resources needed to complete the goals and should also agree on what
the reward will be.

4.Feedback
Goal setting will not be effective if there is not an opportunity for any feedback. Feedback is a chance to
correct or clarify before the goal has been reached. Ideally, feedback is a type of progress reporting. That
gives the managers the chance to clarify expectations and to adjust the level of difficulty to achieve goals, if it
seems too hard or too easy. For the employee of the company, it provides a chance to make sure they are
meeting their supervisor’s expectation and to get reorganization for what they have achieved up to this point.
When the goal is complete to achieve , the manager can also conduct a formal feedback and
acknowledgement session so that the employee can discuss his performance and improvement areas for
future based performances.
SMART model

Specific: Great goals are focused so that employees have clear direction. Any actionable goal should answer
questions like “who” and “what,” and any employee in this culture should know specific expectations and the
customers he serves.

Measurable: A goal without a measurable outcome is like a sports competition without a scoreboard. Any goal
should explain “how” so an employee understands successful impact.

Attainable: Goals should challenge us to do our best, but they also need to be realistically achievable. Goals set
too high can demotivate; goals set too low do not serve our customers.

Relevant: An effective performance objective should be relevant to what the organization and/or the team
needs to achieve. Otherwise, objectives could be successfully delivered but have no impact on the overall
performance of the organization — defeating the ultimate purpose of performance management.

Time-Bound: Set goals that give employees enough time to achieve them but also challenge them to be
productive. Time-bound expectations answer the question “by when.” When our performance goals are
S.M.A.R.T., they ensure that we have specific information, clear success measures, and that what we are
working to achieve will benefit the organization.
Setting of Objectives
 Goals are specific and quantifiable outcomes. People
set goals for themselves by carefully deciding on,
committing to planning to attain specific targets within
a fixed time frame.
 The objective of goals setting is to help you break
down your tasks, set deadlines and work towards
meeting them.
 If one wants to achieve goals, one must set the correct
goals. Proper goal setting is crucial for professional
success as well as for personal growth.
 Goal setting can be short-term or long-term, but all 58