Module 4 Notes
Module 4 Notes
Module 4 Notes
, BIMS
Module 4
Performance Management system [PMS]
PMS is a systematic and integrated process in which individuals & groups take the responsibility
for
To establish clear expectations about performance (by Setting Goals & criteria) and understand
It is important to define performance plans and objectives clearly. At the beginning of the PM
cycle managers meet with their employees and set clear goals and objectives for them. In
this phase, managers plan on ‘how’ their employees should fulfill their goals and accomplish
Managers align employee goals with organizational goals and motivate employees to achieve
them. Employees are motivated by intrinsic and extrinsic rewards. If motivation doesn’t get
the desired results and there are performance problems, coaching is the next step. Regular
● Monitoring Performance
discussion, active listening and measuring progress toward goal achievement. If any problems
are identified, then discuss it with the employee to find out the reason and provide
motivation and resources if necessary. Verify sources of performance problems and discuss
solutions to get the employee back on track. This also helps managers keep track of
employee progress from time to time and give them suggestions to improve their
performance
An ideal performance management system aligns everyone in the organization with the
company’s mission and vision. The manager and the employees meet for their performance
review where the employees assess their own performance first. Then the manager reviews
the performance of the employees over a period and gives them suggestions on where to
● Leadership
management systems are the framework to develop and manage those expectations to
achieve goals.
Significance of PMS
2. Increased focus on driving business results. Since all goals are aligned, an employee’s
day-to-day work supports the company’s mission. This promotes year-round focus on key
4. Foundational knowledge of talent. With insight into your workforce’s skills and abilities,
you can ensure all employees are getting the direction, feedback, and development they
need to succeed. You can identify high and low performers, and track and evaluate the
5. Ensures consistency in the selection of employees for promotion, transfer, or other action
6. All the organization’s employees (as well as supervisors and managers) should be more
highly motivated. Objective performance appraisal will identify those who are
7. Morale and retention - More highly motivated employees are likely to be more loyal, as
well, so that management will have better success retaining valuable employees even as the
nation’s workforce becomes more mobile. In addition, morale should improve, making the
workplace more pleasant, and output per hour worked should increase, cutting labor costs.
Merlin B Joseph, Asst. Prof., BIMS
9. Firing risks - Finally, employees who are sufficiently weak that they should be dismissed
Developing a PMS
Performance management involves more than simply providing an annual review for each
employee. It is about working together with that employee to identify strengths and
weaknesses in their performance and how to help them be more productive and effective
worker. Learn how to develop a performance management system so that you can help
everyone in your organization work to their full potential.
● Discuss any problems they may be having. Listen to their concerns or worries as you talk
through potential solutions.
Implementing PMS
1. Clarify objectives
A vital first step is identifying the major objectives for the program. Clarifying the need for a
performance management system, what and who it should include, what it will deliver and
agreeing measures of what a successful implementation will look like.
Some organisations choose to complete this step collaboratively with input from various
employee groups; others delegate this as an HR Department responsibility; some organisations
have a particular champion from anywhere within the business; others will involve outside
consultants. Experience suggests that a business needs to complete a self examination before
committing to implementing a new performance management system
▪ Review performance against the organisation’s core competencies if they have been
defined.
▪ Identify any learning and development needs for both short and longer term.
▪ Set goals for the next period.
▪ Allow for feedback on progress on an ongoing basis.
Ensure job descriptions are current and in a form that provides clear and measurable results
required.
Make the documentation easy to use – providing hard copy or electronic or web-based.
Consider the system as a cycle with goal setting, progress reviews and recognition/feedback on
achievement and then determine a calendar for the key elements of the cycle.
For example:
▪ Will goal setting be completed annually or six monthly?
▪ Will progress reviews be every month or two months?
▪ Will the formal achievement review – be annually or six months and how will it fit with the pay
review timetable and the annual business plans?
The timing of the calendar should meet your organisation’s specific needs. Decide who signs off
on the process each cycle and who retains copies of the documentation – and why.
4. Ensure Managers are trained
Most performance management systems fail because of lack of training of the people involved.
Managers should be trained in the following:
▪ The objective of the system.
▪ Their responsibility for the system.
▪ The particular process they are going to use – and why.
▪ Setting objectives – why and how
▪ Measuring results – do the hard work up front.
▪ Providing feedback – what and how.
▪ Addressing performance issues – why and how.
▪ Identifying development needs –why and how.
Merlin B Joseph, Asst. Prof., BIMS
The training should include a mix of soft skills and process management. A typical training
workshop to achieve this may run for one and a half days for each small group to allow
understanding and skills to develop to the required level. Experience suggests that refresher
sessions should also be scheduled.
A schedule should be set and followed for reviewing the implementation of the program
against key milestones and against the success measures. Most systems require some
adjustment during the first couple of years. It is quite usual for other employee management
processes to be reviewed during this time also to ensure full integration of the materials,
techniques and supporting mechanisms.
Maintaining a PMS
1. Regular feedback is good for everyone
Ensure regular feedback. All feedback is good feedback as it helps to do the job better and to be
more successful in the Company. Keep communication lines open and build a good relationship
with the employee.
5. Be open
Don’t focus on the negatives. Listen for the positive feedback and consider how you can develop
these skills further. If you are getting constructive feedback, ask for examples. Work with your
manager to develop solutions and discuss what support you need from them to better achieve
your objectives. Be sincere and honest, treat each other with respect.
Merlin B Joseph, Asst. Prof., BIMS
6. Participate
Listen to your manager, be ready to discuss their feedback and develop solutions. Prepare
feedback for them too where appropriate. Communication is a 2-way process and forms the
basis of a good relationship with your manager. Regular, on-the-job feedback, both positive and
constructive, should be encouraged both ways!
Performance Gaps
A performance gap is the difference between the actual or present performance and the
optimal or future performance. Performance gap analysis helps a business identify how far it
has come toward reaching its goals and how far it still needs to go to attain them.
▪ Provide clear expectations and metrics about the work to be performed or behaviour that
must change.
▪ Identify the support and resources available to help the employee make the required
improvements.
▪ Establish a plan for reviewing the employee’s progress and providing feedback to the
▪ Specify possible consequences if performance standards as identified in the PIP are not
met.
When an employee is not performing or meeting expectations, supervisors have at their
disposal several options to correct the behaviour. They can rely on corrective actions such as
oral and written warnings. In more serious cases, they can move to suspension, demotion, or
dismissal. The PIP, in many cases, can be used in place of these disciplinary processes. A PIP can
be given at almost any point in performance discussions with the employee.
Merlin B Joseph, Asst. Prof., BIMS