Managing performance

Most organisations are interested in tracking and evaluating the performance of their employees. While some
organisations have put elaborate performance management systems in place, many others are doing the same informally.

Some challenges that employees generally face in this regard are:
• The performance management system is not clearly defined and they do not know in advance how they are
going to be evaluated.
• The appraisal is not shared and at the end of the year, they do not get to know how they have fared.
• There is no discussion on performance before or after the appraisal.
• The system is subjective and ruled with a lot of bias and perceptions.
• It is in no way linked with the reward and recognition system of the organisation.
Performance management is an important tool, not only for managing the
performance of employees for organisational growth and development, but also for developing and retaining
employees. An effective performance management system needs to have the following four components:
Performance planning: The performance management process cycle should begin with performance planning at the beginning of the performance cycle. Looking at the business plan for the year, an employee’s key performance areas and targets need to be defined. The deliverables, expectations and timelines should be spelt out clearly so that the employee is clear about what is expected from him. If there are any expectations in terms of behaviour, they too need to be spelt out. What is important is that the employee is aware of what and how he is going to be appraised during the year. The best way of doing this would be to share with him the organisational perspective and business plan for the year, the function in which he is and accordingly help him define goals in consultation with his supervisors.
Performance monitoring: The objective of performance management is to enable an employee to give his best. Accordingly, it is
imperative to give him timely and relevant feedback about how he is doing. This would help an employee remain
focused on goals as well as give an insight into what more he can do to enhance performance. A mid-year
review by his supervisor would help him understand his strengths as well as improvement areas which would equip him for better results. Overall, this would create a positive feel that his supervisors were facilitating a better performance.
Performance appraisal: This is the third component of the performance management system. The tools and techniques for this need to be defined and shared with employees well in advance. Employees need to be aware of the rating mechanism,
definition, scoring pattern and complete appraisal system. There needs to be clarity on what will get what rating. The period within the complete appraisal cycle — beginning from self appraisal and ending with appraisal discussions and disbursement of incentives — need to be defined and followed. The appraisal process would begin with self appraisal by the employee and then by
his supervisor and the reviewer. The employee must necessarily get to know how he has been appraised by his supervisors and what more he needs to do to get a better rating next time.
Career development plan: This has become an important part of the performance management system. The end objective of
appraisals should be to identify strengths, areas for improvement, developmental needs, interests and potential of the employee so that a short term and long term career development plan for each employee can be formulated. This would make the employee feel that the organisation cares and at the same time enables the organisation to optimise the potential of the employee.